Capitalists And Money

Wilcon Depot sets P2.2-B capex to expand store network

@WILCONDEPOT.PH

WILCON Depot, Inc., a publicly listed retailer specializing in home improvement and construction supplies, has set aside a capital expenditure (capex) budget of up to P2.2 billion for this year.

This allocation comes as the company moves closer to achieving its goal of opening 100 stores, Wilcon Depot Vice-President for Investor Relations Mary Jean G. Alger said during a virtual press conference on Monday.

“This year, we only budgeted P2.2 billion because some of the stores that we opened, especially in the first quarter, were all spillovers from last year,” she added.

Last year, the company’s capex spending did not surpass P3 billion. Wilcon Depot had allocated P3.8 billion as its capex budget for that year.

“We’ve always budgeted way above what we spent. For the last two years, we budgeted close to P4 billion but we haven’t even exceeded P3 billion (in capex spending),” Ms. Alger said.

Wilcon Depot is aiming to open ten stores this year. The company opened a branch in Bacolod on May 31, marking its 94th store.

“We’re targeting to open ten stores, but we always do more than what we target. We’re doing construction work for more than what we target because in construction, you’re never really sure that the target date of completion will be met,” Ms. Alger said.

She also said the company is expected to recognize a one-time loss following the fire incident at its Baliuag City branch in April.

“We may need to recognize the loss already because one of our branches, the Baliuag branch, was burned down. The assessment is not complete yet, but once it is, or even before the official assessment is completed, we may have to acknowledge the loss,” she noted.

Wilcon Senior Executive Vice-President and Chief Operating Officer Rosemarie B. Ong said the company is banking on stronger same-store sales for the remaining months of 2024.

The company sees softer demand in the home improvement sector, citing macroeconomic challenges such as high interest rates.

“We’re hoping that same-store sales growth will be positive. It’s not just in the Philippines, but basically it’s a global phenomenon. It’s a global challenge. We’re hoping that you know, at least it will still be positive on the low side but seeing the trend, though, it’s been very erratic,” Ms. Ong said.

Meanwhile, Wilcon President and Chief Executive Officer Lorraine Belo-Cincochan said the company is exploring opportunities to expand internationally.

“There are many possibilities. It might be in Southeast Asia or in Asia, particularly where it’s closer logistically,” she said.

“This is something we study. This is something we discuss and, ultimately, we do want to plan for it if ever. It’s not yet in the immediate future,” she added.

For the first quarter, Wilcon Depot posted a 23.1% drop in its net income to P740 million as net sales fell by 2.5% to P8.31 billion.

Wilcon Depot stocks were last traded on June 14 at P18.32 apiece. — Revin Mikhael D. Ochave