Jollibee income falls flat due to forex losses

MANILA, Philippines - Fastfood giant Jollibee Foods Corp. (JFC) posted flat growth in its profit in the first half of the year, earning P743 million compared with P746 million the previous year-period, largely due to foreign exchange losses.

Systemwide sales, which measures all sales to consumers both from company-owned and franchised stores, rose 10.6 percent to P17.57 billion from P15.89 billion. The growth was driven by a 5.7-percent hike in store network and a five-percent rise in sales of stores that were at least one-year old.

In the first half, systemwide sales grew 9.5 percent. Domestic sales increased 9.4 percent while those abroad went up 16.8 percent led by China, which grew 22.5 percent; Vietnam, 99.3 percent and the Middle East, 33 percent. 

Sales from foreign operations accounted for 17 percent of JFC’s worldwide sales in the second quarter.

During the first semester, the group opened a total of 88 stores — 45 in the Philippines and 43 abroad, mostly in China with 30 new stores.

JFC chief finance officer Ysmael Baysa said foreign exchange losses resulted from the exchange rate volatility but noted that the exchange rates had since improved and the losses mostly eliminated in July.

JFC holds fixed-income investments in various foreign currencies in anticipation of its investments abroad and payment of its obligations denominated in foreign currencies.

Baysa said the group is looking forward to achieving double-digit growth rates in sales and profit for the entire year with the opening of a total 200 new stores –100 each both locally and overseas – to bring the total store network to 2,000 by yearend.

The JFC Group operates the country’s largest fastfood network with a total of 1,941 stores worldwide – 1,584 in the Philippines (Jollibee, 700; Chowking, 408; Greenwich, 223; Red Ribbon, 214; Delifrance, 24; and Manong Pepe’s, 15) and 357 overseas (Yonghe King, 177; and Hong Zhuang Yuan, 49; both in China, Jollibee 60 (mainly in the US with 25, Vietnam with 17 and Brunei, with 11. Red Ribbon, 36 all in the US and Chowking, 35; (mostly in the US with 18 and Dubai with 15).

Last month, JFC through its wholly-owned unit Jollibee Worldwide Pte. Ltd. entered into agreements to build a commissary in Shucheng County in the province of Anhui in the People’s Republic of China. The commissary will supply its restaurants in Shanghai, Beijing and Wuhan.