The net profit of C.P. Seven Eleven Plc declined by 11.7% year-on-year to 1.33 billion baht in 2006 due largely to the poor performance of its Lotus Supercenter stores in China, in which the Thai company holds 30% stake, a company executive said yesterday. ”We are not giving up in China because we invest for the long term,” Kriengchai Boonpoapichart, the company’s head of finance, told investors at a briefing at the Stock Exchange of Thailand.
”Even 7-Eleven also lost money in the first two or three years of its establishment. We have started to see signs of recovery for Lotus in China in the first two months of this year.”
He said that he expected the operation of Lotus in China would improve this year, with the loss expected to be lower than last year’s loss of three billion baht.
Though retail competition in the Chinese market is intense, the company said it would continue to spend between 500 million and 1.25 billion baht to open another two to five outlets of Lotus Supercenter in Shanghai this year.
For the local market, the company will spend 3.1 billion baht for business expansion this year. Of the total, about 1.3 billion baht will be spent on opening 400 to 450 new 7-Eleven convenience store outlets, one billion baht for investments in subsidiaries and a distribution centre, and 400 million baht each for renovating 400 existing stores and upgrading assets and IT systems.
The total revenue of C.P. 7-Eleven last year was 104.87 billion baht, up 6% from the previous year. Its net profit dropped by 11.7% to 1.33 billion baht.
Share of C.P. 7-Eleven (CP7-11) closed yesterday on the SET at 5.75 baht, up five satang, in trade worth 65.79 million baht.
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