As the company’s first semester sales reached P11.6 billion this year, Jollibee expressed optimism that the initial signs of growing economic stability would translate to an even better performance during the second half of the year for the company and the fastfood industry in general.
Jollibee vice president for corporate finance Miguel Jose Navarrete said yesterday there were several ongoing negotiations for possible off-shore ventures although he said these talks were not likely to yield results until 2002 or beyond.
Navarrete declined to reveal details of the ventures in the pipeline but said Jollibee’s particular interests were in "new" businesses that the company has not been previously involved in.
"There are lots of concepts that are not here yet but are well-developed in other countries," Navarette said. "These are what we are looking at – something new that could be used as avenues of entry to offshore markets."
However, Navarrete was quick to point out that Jollibee’s hunt for off-shore venture was "not a deliberate process," saying that the company was pursuing possibilities as the opportunities presented themselves.
Jollibee’s operations, according to Navarette, has so far exceeded expectations this year as revenues reached P9.1 billion, growing by 21.9 percent this semester. This translated to a 6.6-percent increase in net income equivalent to a total of P451 million.
"The peso has only started to correct last week and this bodes well if the inflation rate and exchange rate will remain in check," he said. "The inflationary effect of the peso depreciation has had an impact on our operating costs. It’s only because of our leveraging capabilities that we have managed to contain our costs."
Jollibee has also implemented price increases for its subsidiaries, Chowking and Greenwich Pizza, as well as "price realignment" for Jollibee products but Navarrete said no further adjustments are in the offing over the short term.
"Even if we maintained our prices where they are, given the outlook of the economy, we should have improved margins in the third quarter and beyond," Navarette said. "If the pressure on costs abates, we should see better margins immediately."
However, Navarette also cautioned that competition has not abated in the fast food sector, especially with the company’s leading competitor, McDonald’s embarking on a massive expansion plan for the next three years.
"This is not an easy market to operate in but we think there is room for everyone even if competition continues to be intense," he said. Despite McDonald’s announcement that it was expanding its store network, he said Jollibee has so far not felt the impact on its sales.
"If there is an impact, we would know about it and so far, we haven’t seen any," he said.
In its first semester report, Jollibee said its flagship brand continued to propel the group’s overall growth, accounting for 69 percent of total revenues. It’s subsidiary, Chowking, also registered record growth of 44.7 percent in the second quarter and so did Greenwich Pizza which grew by 15 percent.
Jollibee operates the country’s largest fastfood chain with a total of 781 restaurants nationwide. Jollibee itself has 393 stores while Greenwich has 195 stores and Chowking has 174 stores. Delifrance has 19 stores.