Jollibee net profit jumps 21% to P1.59B

MANILA, Philippines - Fastfood giant Jollibee Foods Corp. (JFC) posted first half net earnings of P1.59 billion, up 21.2 percent from the same period in 2011 on steady same store sales growth, new store openings and first time contribution from San Pin Wang.

In a statement, JFC said systemwide sales, a measure of all sales to consumers, both from company-owned and franchised stores, expanded by 13.5 percent to P44.5 billion while revenues shot up by 15.6 percent to P34.18 billion.

Earnings per share amounted to P1.535 billion or 20.2 percent more than the previous year.

In terms of system-wide sales, the local business grew 9.5 percent while the foreign business increased by 24.7 percent with China growing 30.9 percent. Southeast Asia and the Middle East business improved by 22.5 percent and the US by 13.3 percent. 

During the first semester, the JFC Group opened a total of 91 new stores, 51 in the Philippines and 40 abroad.

JFC chief financial officer Ysmael Baysa said healthy same store sales growth in most regions driven primarily by higher transaction count or volume of customers per store, cost improvement in support groups in the Philippines and in China, lower financing costs and tax savings were the factors that drove significant growth in net income. 

Baysa added that same store sales growth and higher cost of labor, rent and utilities remain as very important challenges in its businesses in China.

On rising world food commodity prices caused by severe drought in the US Midwest, Baysa said JFC has been closely watching the price trends particularly of corn, wheat, soybean and rice which had risen significantly, in the past two and half months based on the prices at the Chicago Board of Trade. 

Due to the long and complex supply chain and the use of local agricultural produce, however, the impact of these cost increases on JFC’s chicken, beef, flour, vegetable oil and rice would be much less and with a lag time stretching as far as six-eight months from the time of the price change in world trading.

In the past such as in 2008, at the height of the world food commodity price increases, JFC gradually adjusted the selling prices of its products over a period of time to compensate for the cost increases, Baysa noted.

Regarding the impact of the flooding in Metro Manila and nearby provinces brought by torrential rains on Aug. 7 and 8, the number of stores in the JFC Group with reported damages represented about one percent of the nation store network. Most have resumed normal operations. The impact from the combined disruptions in customer visits and store operations is estimated at about two percent on the normal national sales in August, mostly coming from Metro Manila and North Luzon.