Jollibee net income up 38.9% to P850M in H1

Local fastfood giant Jollibee Foods Corp. (JFC) reported a 38.9- percent increase in its net income during the first six months of the year to P850.6 million, driven by higher sales from both its local and international operations.

The company said its total system-wide retail sales amounted to P17 billion, up 22.8 percent from the previous year’s level. Revenues likewise grew 22.6 percent to P12.7 billion while income from operations rose 38 percent to P1.1 billion.

For the second quarter alone, JFC’s net earnings rose 36.8 percent to P468.5 million while revenues expanded 29.7 percent to P6.9 billion as system-wide sales – the direct sales to consumers from both company-owned and franchised stores – went up 28.7 percent.

JFC’s newly-acquired business in China, Yonghe King, accounted for six percent of the second quarter growth while the established businesses located mostly in the Philippines grew by 22.7 percent.

Company chairman and president Tony Tan Caktiong said the group’s strong performance was due to increased consumer spending arising from strong agricultural output, the effect of election-related spending and the stream of product improvement and new product introductions, supported by product-focused advertising campaigns launched over the past several months.

"Our growth in the second quarter is broad-based across business units Jollibee, Chowking, Greenwich and Delifrance." He added that the Yonghe King business grew 66 percent during the second quarter compared to the same period in 2003 when the business was severely affected by the Severe Acute Respiratory Syndrome or SARS.

Tan Caktiong said sales profit and cash flows from the group’s new business in China are growing in line with their expectations, with sales rising 44 percent in the first half this year.

He also expects sales of the JFC Group to continue growing in the remaining two quarters of the year compared to the same quarters of 2003 but the growth rates will be lower than the first half of the year since election spending will no longer be a factor for the rest of the year.

"The Jollibee group has so much opportunities for growth in the domestic business and abroad. We have to further build, however, our capabilities for deeper market penetration, for reapplying our competencies to foreign businesses and for dealing with a variety of business environment," Tan Caktiong said.

Tan Caktiong said he and the management team are focusing their efforts on further building their business for long-term growth.

JFC chief finance officer Ysmael V. Baysa likewise disclosed that the group generated P1 billion in cash in the second quarter, building its cash to P3.1 billion as of end-June this year.