Jollibee Foods Corp. (JFC) chief financial officer Miguel Jose Navarette said under normal conditions, the group’s net income is forecast to substantially improve this year in line with the country’s anticipated economic recovery.
Last year, JFC and its subsidiaries Greenwich Pizza, Chowking and Delifrance managed to pull in double-digit growth in systemwide sales despite the weak economic conditions further worsened by the Sept. 11 terrorist attacks on the US.
Consolidated revenues (including royalties and franchise fees) reached P18.96 billion in 2001, up nearly 21 percent from the previous year. But bottomline earnings inched up a mere 4.4 percent to P950 million as the slightly higher total costs and expenses offset the gains in revenues.
JFC’s financial health has been further affected by the write-down of some P378 million in non-recurring charges, consisting mainly of non-operating owned and leased real estate properties and costs incurred in closing poorly performing stores.
With the non-recurring charges factored, JFC would have posted a sharp 37-percent drop in net income from P909 million to only P572 million.
"Given the poor economic conditions, we felt it was prudent to make a major assessment of JFC assets to determine realistic current valuations," JFC chairman and CEO Tony Tan Caktiong said. "Majority of these charges relate to decisions and commitments made in prior years," he added.
Last year, the JFC group closed down a total of 32 outlets, which included six Jollibee stores in the US. But in the same period, a total of 115 new outlets opened, which was more than doubled from the 67 new openings in the prior year.
The new stores consisted of 55 local Jollibee outlets, 14 Greenwich, 11 Delifrance and 35 Chowking stores. In addition, seven new Jollibee stores were put up abroad. The company also acquired Tokyo Teriyaki in California to include a Japanese food segment in the group.
At end-2001, there were 863 outlets in the JFC network, 30 of which are international stores.
Navarette said while they expect to close more stores this year as part of their investment rationalization, this will be offset by the establishment of more outlets, which will be supported by the opening of a P2.5-billion food commissary in the fourth quarter.
The P1.5 billion in programmed capital expenditures this year is about the same level as JFC’s expenses last year, with around P500 million to be channeled into the establishment of new, mostly franchised stores. – Conrado Diaz Jr.