Wilcon profits fall 32% due to ECQ

Construction supplies and home improvement store chain Wilcon Depot, Inc. reported a 32.1 percent drop in net income to ₱328 million for the first quarter of 2020 from the ₱484 million earned during the same period last year.

In a disclosure to the Philippine Stock Exchange, Wilcon President and CEO Lorraine Belo-Cincochan said “Wilcon Depot was not spared from closure when the Enhanced Community Quarantine (ECQ) was imposed by the Philippine government over Luzon on March 17, 2020.”

She explained that, “Under the ECQ, our line of business was excluded from the ‘essentials’ category. We closed all our 44 branches, which accounted for 84 percent of our net sales in 2020 pre-ECQ.”

As a result, net sales declined by 2.5 percent to ₱5.59 billion for the first quarter of 2020 from ₱5.73 billion in the same period last year.

“It was unfortunate that we had to close because we were doing so well pre-ECQ but of course the well-being and health of everyone are paramount,” Belo-Cincochan said.

The said gross profit still grew by 3.1 percent to ₱1.89 billion despite the net sales contraction due mainly to the increase in the contribution of the higher-margin exclusive and in-house products to total net sales to 50.9 percent during the period versus 48.8 percent in the first quarter of 2019.

The main factor that pushed net income downward was the increase in operating expenses yearon-year. Operating expenses rose 19.7 percent to ₱1.43 billion for the period, traced mainly to the increase in lease and manpower related expenses.