Thailand's CP ALL Q2 profit growth slows to 3 percent, misses estimates

BANGKOK, Aug 9 (Reuters) - Thailand’s largest convenience store operator, CP ALL Pcl, reported a slowdown in net profit growth to 2.8 percent in the second quarter, its weakest quarterly results in years.

CP ALL booked net profit of 4.78 billion baht ($144.2 million) in its April-June quarter versus 4.65 billion baht in the same period a year ago, missing a Thomson Reuters I/B/E/S estimate of 5.51 billion baht.

Profit growth slowed markedly from the second quarter of 2017 when profits rose by 10.8 percent.

Gross margin declined to 27.7 percent from 28.3 percent a year ago due to higher sales of low margin products such as cigarettes, alcohol and game cards.

CP ALL, which has over 10,000 convenience stores nationwide, said operations were “decent,” reporting revenue of 129.7 billion baht, up 7.5 percent from a year ago.

Administrative and distribution expenses rose 9.6 percent from the same time last year to 20.76 billion baht due to an increase in the minimum wage, higher distribution cost and higher electricity unit costs.

It forecasts growth to be in line with the Thai economy.

CP ALL, controlled by Thai billionaire Dhanin Chearavanont, stuck to its plans to add 700 new stores this year, with a goal of reaching 13,000 stores by 2021.

It projects capital expenditure of 9.5 billion to 10 billion baht for store expansion, renovation and investment in new projects.

$1 = 33.1600 baht Reporting by Chayut Setboonsarng; Editing by Adrian Croft