Jollibee eyes Indonesia, posts 21% profit hike in ’03

Jollibee Foods Corp.(JFC) is now training its sights on Indonesia as its next possible area for future growth, company officials said yesterday.

In a briefing, JFC chief financial officer Ysmael Baysa said the company is looking into expanding its operations in Indonesia either through the establishment of new stores or the acquisition of existing businesses.

"We have the financial capability to do another transaction in the same magnitude as the Yonghe King purchase. It may happen next year," Baysa said.

Last Feb. 6, the JFC Group signed an agreement to acquire 85 percent of Belmont Enterprises Ventures Ltd., the holding company of the Yonghe Group, which owns and operates the Yonghe King chain of quick-service restaurants in China.

Jollibee International (BVI) Ltd., a wholly-owned subsidiary of the the JFC Group, will pay $22.5 million for the acquisition of 77 Yonghe King stores.

The Yonghe King restaurant chain, which started in 1995 in Shanghai, serves Chinese food using a Western-style fastfood service system. It operates 26 stores in Shanghai, 26 in Beijing, 11 in Shenzhen, eight in Wuhan and six in Hangzhou.

Baysa said the Yonghe King fastfood business is expected to contribute five percent to the JFC Group’s system-wide sales this year.

The JFC Group reported a 20.8 percent growth in its net income last year to P1.25 billion from P1.04 billion the previous year, fuelled by strong sales and substantial cost savings.

For the fourth quarter alone, profits of the JFC Group jumped 27.1 percent to P345.57 million compared with only P271.81 million the previous year-period.

System-wide sales rose 7.9 percent to P28.88 billion from P26.75 billion in 2002.

Baysa said he expects JFC profit to grow by 10 to 15 percent this year as the group opens 100 new stores worldwide.

He also foresees international operations to contribute 55 percent to the JFC Group’s overall revenues by 2010. At present, overseas operations account for only five percent of the group’s total revenues.

Baysa said the shortage of and increase in prices of chicken in November and December did not significantly affect the business. "Based on our January to February sales, we don’t see any deterioration," he said.

The JFC Group operates the Philippines’ largest fastfood network. It had a total of 988 stores worldwide as of end-December last year: 467 Jollibee, 245 Chowking, 213 Greenwich, 30 Delifrance and 33 other stores abroad.

With the acquisition of Yonghe King, the group’s total stores worldwide have grown to 1,065.