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Reporting on BIG C Financial Results for the year end 2008

BackFeb 26, 2009

26th February 2009

To: The Director and Commissioner of the Stock Exchange of Thailand

Ref: Reporting on Company's Financial Results for the year end 2008.

Dear Sir,

Big C Supercenter PCL is pleased to report the results of its company and subsidiaries that have been examined by Ernst & Young auditors as of 31st December, 2008.

The key highlights for 2008 are the following:

- Robust growth in sales +9.2% and rental income +15.4%

- Accelerated expansion:12 store openings (versus 8 initially planned)

- High operating profit margin : 5.9% of sales

- Significant increase in Net profit : +14%

- High return on capital employed: 13.8%

Through these 2008 results, the Company confirms its strong profitability profile and strengthens its position of leading player in Thailand (#2 on large trading format). One of the most significant operational events of the year 2008 was the accelerated expansion plan with the opening of 12 new stores mainly in upcountry (10 out of 12 stores), thus diversifying the Company's geographical presence in the country. These new commercial centers all contain a hypermarket "Big C" and a shopping mall, in accordance with the Company's dual retail-property management model based on synergistic interactions between retail and real estate management.

At the end of 2008, the Company operated 66 hypermarkets and 65 shopping malls.

The operating results of the Company and its subsidiaries for the year ended 2008 reflected a net profit of Baht 2,852 million,compared to a net profit last year of Baht 2,502 million, which represents an increase of Baht 349 million, or 14 %. This good performance is due to the following reasons:

1. Net Sales
Net sales during the year ending 2008 amounted to Baht 67,292 million for the company and its subsidiaries, which represents an increase of Baht 5,692 million, or 9.2%, over last year's operational figures. The significant increase in sales was supported by the Company dynamic expansion with twelve new store openings in Ayuthaya, Banpong, Sukothai, Chaiyaphum, Phetchabun, Krabi,Navanakorn, Rangsit Klong6, Yasothon, Sakaeo, Warin Shamrap and Maha Sarakham in 2008.

2. Rental and Service Income from tenants
Rental and Service Income from tenants amounted to Baht 3,148 million in 2008 which represented an increase of Baht 421 million or 15.4% over last year, reflecting our strong expansion program.

3. Other Income
Other Income including income from suppliers' subsidies of in-store promotions and manufacturer promotions, income from logistics optimization and others in the year 2008 amounted to Baht 7,826 million, which represented an increase of Baht 1,253 million or 19.1% over last year. The increase in other income was mainly driven by the higher subsidies by suppliers.

4. Gross Profit
A gross Profit of Baht 5,073 million in 2008 represented a decrease of Baht 90 million or 1.8% over last year due to the sale promotion campaign launched to support consumption in a context of economical uncertainty and political turbulence. However, the overall profitability of the Company is still solid and in line with our expectations.

5. Selling and Administration Expenses
Selling and Administration Expenses of Baht 12,073 million in 2008 represented an increase of Baht 1,329 million or 12.4 % over last year's figures. This resulted from increased pre-opening expenses and depreciation due to the accelerated expansion.

6. Finance cost
Finance cost for the year 2008 were Baht 149 million which represented an increase of Baht 65 million or 77% over last year.

7. Corporate income tax
Corporate income tax for the year 2008 amounted to Baht 957 million, decreasing by Baht 148 million or 13.4% over last year. This decrease resulted from the tax incentive under Royal Decree No. 460 passed by the Revenue Department, which allowed a limited public company listed on the Securities and Exchange of Thailand (SET) to deduct 25 percent of the amount of investment payment for alterations, extensions or renovations of existing projects from 2006 until December 2010.

 

Yours very truly,

 

Mr. Yves Bernard Braibant
CEO & President

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