Jollibee Foods Corp. (JFC), the country’s largest fast food chain, said its net income after tax in 2014 grew to P5.3 billion from P4.72 billion in 2013 on strong system-wide sales, although higher raw material costs weighed down profit growth.
JFC reported its revenues for the year reached P90.6 billion, up 12.9 percent from the previous year.
For the fourth quarter alone, net profit climbed to P1.68 billion from P1.58 billion a year earlier, with revenue rising to P24.9 billion.
“The raw material cost increases in 2014, which averaged 5.4 percent, brought pressure on our profit margins. We made important price adjustments and improved our store and manufacturing expenses during the year,” said JFC chief financial officer Ysmael Baysa.
“We are now very close to fully covering these costs increases and look forward to the full recovery and improvement in gross profit margins in 2015 through lower cost of energy and mmore stable raw material prices,” Baysa said.
“Our general and administrative expenses rose significantly…We view these expense increases as key investments for long term growth and expect these rising overhead costs to be more than offset by higher rates of business growth in the years ahead,” he added.
Its Philippine business grew by 13.2 percent while its foreign operations – including in Southeast Asia, the Middle East region, the United States and China — went up by 13.7 percent.
“Despite rising costs, our Philippine and foreign businesses made significant improvement in profitability. Our Philippine business achieved a double digit profit growth rate while all foreign regions: the United States, China, the Middle East and Southeast Asia contributed profit to the JFC Group in 2014,” Baysa said. Kristyn