Jollibee net income rises 15%

Jollibee Foods Corp. (JFC) has accomplished its earnings expectations for the first nine months of 2002, increasing its net income by 15 percent to P744 million on the back of a strong third quarter, company officials said yesterday.

The country’s largest fastfood chain – made up of the flagship Jollibee burger and chicken joint, pizza chain Greenwich, Oriental food unit Chowking and bakery/café Delifrance – reported systemwide sales of P19.4 billion in nine months, up 10.4 percent from a year earlier, as it was able to recover from a slow first quarter with successive gains over the next two quarters.

In a briefing, JFC chief financial officer Jose Miguel Navarrete said with the continued build up in sales along with the cost containment initiatives, the group’s income stream has improved considerably.

"Cost containment initiatives implemented across our system have been able to offset increases in fuel, utility, rental and labor costs. Complemented with modest adjustments in pricing levels, a notable improvement in margins compared with that of last year has been delivered," Navarrete said.

He added this resulted in a significant increase in third quarter operating profits, sustaining gains made in the previous quarter. In the third quarter, net income rose another 27 percent – similar to the gains made in the second quarter – to P250 million. At the start of the year, JFC incurred a nine percent net loss as weak consumer demand carried over by the scare from the terrorist attacks in the US weighed down on the company’s revenues.

JFC chairman and CEO Tony Tan Caktiong added that given the trend, "our business is on track to achieve the higher end of our profit objectives for 2002."

"Our expectation is that this favorable trend should continue over the medium term, and our business is well poised to capitalize on the expected opportunity in the balance of the year and into 2003," he said.

The JFC officials had earlier projected that their sales and income growth this year could range from 10 to 15 percent, which at the rate the group is going, could be breached by the end of the year.

The largest fast food chain in the country, the JFC group now has a total network of 838 stores in the Philippines, broken down into 423 Jollibee outlets; 186 Greenwich stores; 203 Chowking units; and 26 Delifrance bakeshops. In addition, there are 28 Jollibee and six Chowking stores abroad, mainly in the US, Hong Kong and Dubai.

Tomi’s Teriyaki, the latest addition to the JFC family, opened its first store in Powell St., San Francisco, California last Friday. Bought last year as Tokyo Teriyaki, the opening of the Japanese-styled food unit was greeted positively and has met the internal expectations of the US-based market, Navarrete said.

JFC is also setting its sights on the huge China market as it continuously expands its international operations toward potentially strong territories. Tan Caktiong said plans to establish outlets in other Asian markets such as Singapore, Taiwan and Malaysia have been put on hold but expansion plans in the established markets like the US will continue.