Jollibee hikes 2015 capex to P9 B

MANILA, Philippines - Fastfood giant Jollibee Foods Corp. (JFC) is setting aside a bigger budget for capital expenditures next year as it plans to ramp up expansion of its store network both here and abroad following robust earnings in the first nine months of the year.

In a statement to the local bourse, JFC said its board has approved a capital expenditure budget of P9.1 billion for 2015, about 42 percent more than its P6.3 billion spending this year.

JFC said P6.7 billion of the budget would be allocated for the Philippines and another P1.7 billion would be earmarked for China.

The country’s largest food service company said the balance would be used for the US, Southeast Asia and Middle East operations.

“The 2015 capital expenditures will be mostly for the store openings in the Philippines and foreign operations, store renovations in the Philippines and abroad, investments in commissary construction and commissary capacity increase in the Philippines,” JFC said.

The homegrown fastfood giant said the investments would be financed by the company’s cash reserves and cash expected to be generated from next year’s operations.

JFC chief finance officer Ysmael V. Baysa said in an earlier interview that the company would open more than 300 stores next year, with a third to be opened abroad.

Baysa also said JFC is looking at introducing its brand in two new countries in the Middle East by next year.

JFC operates the largest fastfood service network in the Philippines with 2,258 branches as of end-September. Its brands consist of Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal and Burger King.

Abroad, it already has 591 stores in various cities and provinces in China, US, Southeast Asia and the Middle East.

JFC reported yesterday that its profits and revenues continued to grow at a double-digit pace in the first nine months of the year.

JFC’s net income jumped 16.5 percent in the first three quarters to P3.64 billion from P3.12 billion last year.

Revenues for the nine-month period also rose 13.7 percent to P65.75 billion while system-wide sales, or the measure of all sales to consumers from both company-owned and franchised stores, grew 13.6 percent to P85.47 billion.

For the third quarter alone, earnings picked up 15.1 percent to P1.17 billion from P1.02 billion while revenues increased 11.6 percent year-on-year to P22.05 billion.

In terms of system-wide sales, JFC said Philippine business in the third quarter grew 13 percent year-on-year while foreign business improved 9.6 percent.

Sales for the nine-month period, meanwhile, surged 13.6 percent consisting of a 13.4 percent growth rate in the Philippines and 14.5 percent abroad.

The Jollibee Group said it has opened 148 new stores in the first nine months of the year, of which 114 were in the Philippines and 34 were in foreign markets.