Jollibee profit up 16% to P3 B

MANILA, Philippines - Fastfood giant Jollibee Foods Corp. (JFC) reported a 16-percent jump in net earnings last year to P3.09 billion on strong growth across all its brands, coupled with the first-time contribution of the newly-acquired Mang Inasal business.

In a financial report filed with securities regulators, JFC said systemwide sales, a measure of all sales to consumers both from company-owned and franchised stores, went up 10.2 percent in 2010 to P70.25 billion while revenues expanded 11.2 percent to P53.35 billion. Net operating income amounted to P3.67 billion, 11.1 percent higher than the P3.3 billion recorded a year earlier.

In the fourth quarter alone, JFC posted a net profit of P954 million, up 17.4 percent from P813 million. This was on the back of a 12.7 percent rise in revenues to P14.93 billion. Systemwide sales, on the other hand, climbed 11.6 percent to P19.46 billion.

“Practically all our brands in the countries where we operate achieved growth in the fourth quarter of 2010 versus the same period in 2009 led by our businesses Yonghe King and Hong Zhuang Yuan in China of 30 percent and Jollibee International of 25 percent,” said Tony Tan Caktiong, chairman and chief executive officer of JFC.

Bacolod-based grilled chicken chain

Mang Inasal pumped in five percentage points to JFC’s worldwide sales growth in the fourth quarter, Tan Caktiong said.

As of Dec. 31, 2010, the group had a total of of 2,316 stores worldwide, 23 percent higher than the same period a year ago, due largely to the acquisition of Mang Inasal that added 345 stores to JFC’s branch network.

“We were able to preserve and even slightly improve our profit magins despite the fast rising cost of labor, power and raw materials, “ Tan Caktiong said.

Net income margin improved from 5.6 percent to 5.8 percent a year earlier while the company’s return on equity rose to 18.6 percent from 17.5 percent.

Basic earnings per share increased 15.4 perecnt to P3.01 while cash dividends more than doubled to P2.25 per share.

In spite of the threat of a rising inflation, Tan Caktiong is confident that the company will continue to post robust sales and profit in and outside the country. “We expect our fairly new businesses in China, the United States, Middle East and Vietnam, and Mang Inasal to drive our sales and profit growth.”

Last year, JFC forged an agreement to acquire 55 percent of San Ping Wang, a fastfood chain with 34 stores in Guanxi Province in South China.

JFC chief financial officer Ysmael Baysa said proactive profit margin management has been critical in managing the business in the past three years. “Cost trend anticipation and timely business adjustments enabled the company to sustain fairly stable profit margins despite continuously changing costs of labor, power and raw materials. These will continue to be critical in managing our businesses worldwide in the months and years ahead. The costs of doing business will most likely keep rising appreciably,” Baysa said.

The company spent P5.7 billion last year or more than double the P2.6 billion budgeted in 2009. Around P2.8 billion of the total went to construction of new stores and refurbishment existing ones while P2.7 billion was used to acquire a controlling 70 percent stake in Mang Inasal.

Some P128 million on the other hand, was chanelled to the initial construction of a processing commissary in Anhui province in China.