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By Likha C. Cuevas-Miel, Reporter
JOLLIBEE Foods Corp. (JFC) announced on Thursday
that its profit last year rose by a single-digit as same store sales
grew at the same time as its store network expanded.
In a statement, the country’s largest fast
food operator said its net income last year went up by 9.4 percent
to P2.363 billion with system-wide sales—which came from both
company-owned and franchised stores—growing by 14 percent to
P51.55 billion.
“In the Philippines, more people were eating
out and eating out more often in 2007 than in many previous years.
This must be another indication that the economy grew remarkably in
2007,” Tony Tan Caktiong, JFC chairman and chief executive said.
“Our brands maintained and some even improved
their market shares in the fast growing industry despite strong
challenges from competition,” he added.
For the whole year, domestic sales grew by 14.4
percent while stores abroad registered an 11.3-percent improvement.
Excluding the effect of a strong peso, sales from offshore
restaurants improved by 19.6 percent.
For the fourth quarter alone, JFC system-wide
sales went up by 12.8 percent year-on-year, helping the company
generate a net income of P550 million, net of estimated accounting
adjustments of P115 million after tax for three months. However,
this was 15.7 percent lower than the previous year due to the
adjustments that came with complying with international financial
reporting standards like writing off of assets from closed stores
and provision for the cost of the company’s stock options. Without
these adjustments, profits for the quarter would have been 2 percent
higher to P665 million.
Tan Caktiong said the price increase in raw
materials and commodities worldwide—like milk, cheese, cooking oil
and flour —have been eating into the profit margin of the group.
However, the higher costs of raw materials were partly offset by the
strengthening peso that tempered the rise of prices of imported
goods. Also mitigating higher material prices were higher operating
efficiency in stores, cost cutting measures in commissaries and head
offices and by slight price adjustments of products.
“Our cost improvement efforts and our slight
price adjustments in November and December could not totally offset
the steep rise in raw material prices. We will continue to take
these steps as part of our efforts to try to recover our profit
margins,” Ysmael Baysa, JFC chief finance officer, said.
He said raw material prices would continue to
rise until the second quarter but as of end-February sales growth
remain strong.
Cost of sales in relation to revenues picked up
last year to 46.9 percent from 44.6 percent in 2006 while general
expenses were trimmed to 42.8 percent from 44.8 percent previously.
This, together with increased advertising and promotions, pushed its
net income as percent of revenues to decline to 6.1 percent from 6.3
percent in the previous year.
Tan Caktiong said the group plans to expand its
overseas network, particularly Jollibee in the US and Yonghe King in
mainland China. “We hope that these two brands will spearhead the
growth of all our brands in foreign operations in the years to
come,” he said.
Last year, the group opened 173 new stores, 151
of which are in the country and 22 abroad and spent a 29-year record
P2.3 billion in capital expenditures, mainly on new store
construction.
At end-December, JFC operates about 1,456 stores
in the Philippines, 620 of which were Jollibee stores, 374 Chowking,
245 Greenwhich, 189 Red Ribbon, 26 Delifrance and 2 Manong Pepe
outlets.
Stores abroad reached 179 with 99 Yonghe King
stores in mainland China, 14 Jollibee, 20 Red Ribbon and 12 Chowking
stores in the US, 9 Chowking stores in Dubai, 5 Chowking in
Indonesia.
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