Dec. 18 (Bloomberg) -- FamilyMart Co., Japan’s third-biggest convenience store chain, expects net income to rise to 30 billion yen ($357 million) by 2016 and grow about 10 percent annually in following years as it ramps up overseas operations.
International divisions will double their earnings contribution to 20 percent by February 2016 from about 10 percent now as more overseas units become profitable, Chief Financial Officer Yoshiki Miyamoto said in a Dec. 14 interview. The Tokyo-based company had net income of 16.6 billion yen in the 12 months ended February.
The store operator has opened more outlets abroad than in Japan as a shrinking population at home reduces demand. FamilyMart has 9,201 stores in Japan and 12,549 overseas as of November and plans to almost double its shop network to 40,000 globally in 2021, according to the company website.
“There is a big impact when an unprofitable business turns profitable,” Miyamoto said. Thailand is now in profit, while China may make money next year, he said.
The retailer expects net income to increase more than 10 percent annually on average until the year ending February 2016, said Tomoaki Ikeda, the company spokesman. The earnings outlook excludes one-time items.
FamilyMart businesses in Taiwan, Thailand and South Korea posted earnings of 2.4 billion yen last year, according to the company’s annual report. Units classified as “other areas,” which includes the U.S., Vietnam and China, lost 932 million yen, according to the report.
The Thai business, which turned profitable in 2010, is speeding up expansion in the Southeast Asia country through a tie-up with a local company.
FamilyMart is considering entering the Russia market and open at least 300 to 500 stores, Miyamoto said, without specifying when the company plans to operate in the country.
The company operates in eight countries as of November, and it plans to open stores in the Philippines in February next year, it has said. Its larger competitor Seven & I Holdings Co., operator of the 7-Eleven chain, has stores in 16 countries, while Lawson Inc. operates in four countries.
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