Jollibee net income surges 42% to P382 million in first quarter

Fastfood giant Jollibee Foods Corp. (JFC) posted a net income of P382 million in the first three months of the year or an increase of 41.6 percent from the year ago level, driven by strong sales and margin improvement.

System-wide retail sales rose 16.6 percent to P7.8 billion from P6.7 billion a year earlier, fuelled by increases in flagship brand Jollibee (10.5 percent), Greenwich (14.4 percent), Chowking (43.7 percent) and the balance of business mainly international (7.9 percent).

Revenues amounted to P5.78 billion, up by 15.1 percent from P5.02 billion in 2003 while earnings per share grew 41.5 percent to P0.39.

Chairman and chief executive officer Tony Tan Caktiong said the first quarter marked the third consecutive quarter of improving sales growth rate. This indicates that the fundamentals in our core businesses are working, particularly our product development and new product introductions, which we focused on in the past several months."

"The organization also recognizes that while first quarter results were impressive, there are still major challenges to address to ensure the long term soundness of the business – we have to improve our cost structure particularly in the support groups, we have to sustain positive growth in same store sales and we have to win big in foreign operations if we are to become a truly world class business," Tan Caktiong said.

However, he said he does not expect the company to sustain the same high growth numbers in the third and fourth quarters.

JFC chief finance officer Ysmael V. Baysa meanwhile, said the company’s financial results still exclude the operations of Yonghe King business in China since JFC’s acquisition of 85 percent ownership share of Belmont Enterprises Ventures, Ltd., the holding company of Yonghe King, took effect only at the end of the first quarter of 2004.

He disclosed, however, that Yonghe King’s sales in the first quarter this year rose by 26.8 percent from $ 5.7 million in the same period of 2003 to $ 7.3 million, basically in line with the JFC group’s expectations. Yonghe King stores grew from 77 as of the beginning of 2004 to 86 as of the end of the first quarter.

The JFC Group of Companies, excluding Yonghe King, opened a total of 21 new stores during the quarter but closed down 13, which included all three Tomi’s Teriyaki stores in the US, all three Chowking stores in Dubai, and a Jollibee store in the US.

"Tomi’s Teriyaki business did not grow according to expectations. Its basic concept is sound but there is still much work to be done to turn it into a strong brand," Baysa said.

Baysa said the company, however, is keeping the brand trademark and the recipes for possible future use.

"In the meantime, management is placing its priority on brand development on Yonghe King in China," Baysa said.

As of end-March this year, the JFC group’s branch network grew to 1,082 worldwide with 112 stores in foreign operations. Its local stores, on the other hand, reached 970 – Jollibee (471), Chowking (253), Greenwich (217), and Delifrance (29).