Jollibee reports 18% income hike to P1.05B

Amid a very challenging business environment, fastfood giant Jollibee Foods Corp. reported a 17.6 percent growth in its first half net profit to P1.05 billion from P894.58 million a year earlier, mainly due to the opening of new stores and the additional earnings contribution from Red Ribbon Bakeshop.

In the second quarter, JFC earned P603.15 million or 12.5 percent higher than the P536.24 million profit posted in the same period a year ago.

JFC said total system-wide sales, a measure of all sales to consumers both from company-owned and franchised stores, increased by 12.1 percent to P11.5 billion in the second quarter and were up 13.5 percent at P21.8 billion in the first half.

Revenues reached P15.97 billion in the first half, and P8.39 billion in the second quarter, up 14.7 percent and 13.6 percent, respectively.

Red Ribbon, which JFC acquired in October 2005, added almost P1.4 billion or seven percent to system-wide sales, a measure of all sales both from company-owned and franchised stores.

In the six months to June this year, JFC opened a total of 84 stores to bring its worldwide network to 1,477 – Jollibee 550, Chowking 341, Greenwich 241, Red Ribbon 144, and DeliFrance 39; abroad, the group had a total of 162 stores – Yonghe King 104 in the People’s Republic of China; in the United States Jollibee 10, Red Ribbon 18, and Chowking 10; in Dubai in the United Arab Emirates – Chowking 5, In Indonesia – Chowking 3 and in other parts of Asia 12.

Commenting on the group’s strong performance, JFC chairman and chief executive officer Tony Tan Caktiong said: "We accelerated the growth of our store network in 2006 despite the difficult business environment which is characterized by tightened consumer spending and rising costs in order to continue to grow the market and to build stronger foundations for our future businesses."

"We are also encouraged by the progress in our key projects across business units and corporate functions which are aimed at delivering significant long-term impact on our growth and profitability.

These included plans for the expansion of Red Ribbon both in the Philippines and in the US, the resurgence of growth of the Jollibee brand in the US, major product improvements in Yonghe King in China, continuous product improvements and new product introductions in our established businesses in the Philippines and the operation of our shared services in Manila," Tan Caktiong added.

With the group’s robust performance, JFC chief finance officer Ysmael Baysa said the company is eyeing a double digit growth for the year. Baysa, however, said the business remains very challenging.

"Based on our research, consumers were eating out of home less than often in the first and second quarters of 2006, the economy grew slightly faster, the agriculture harvest was much higher while inflation decelerated slightly," Baysa said.

Jollibee is popular for its hamburgers and fried chicken. It also sells Chinese meals through Chowking outlets, and pasta and sandwiches at Greenwich and Delifrance stores.

Meanwhile, Pancake House Inc. said its net income more than doubled to P17.7 million in the first six months of the year on the continued strong performance of its flagship store Pancake House and the improved operations of Dencio’s.

Consolidated revenues surged 81.4 percent from P351.4 million to P637.5 million.

Restaurant sales increased by 132.2 percent from last year’s P193.4 million, while commissary sales and franchise revenues also grew by 18.2 percent and 26.9 percent, respectively.

As it opens new outlets in strategic locations nationwide, the group expects further growth in revenues and thus increased profitability as well.