Jollibee reports lower 2008 profits

ABS-CBN News

Posted at Feb 13 2009 03:17 PM | Updated as of Feb 13 2009 11:23 PM

Fast-food giant Jollibee Foods Corp. (JFC) said Friday its net income last year fell by 3.8 percent as higher costs of raw materials and fuel offset sales.

In a financial statement, the company said earnings in 2008 amounted to P2.29 billion, compared with P2.38 billion in the year before.

JFC reported that revenues totaled P44.19 billion, up 13.9 percent from P38.81 billion, but was eroded by an 18.3 percent increase in cost of sales and 12 percent rise in general and administrative expenses.

For the fourth quarter alone, however, JFC posted a 20.2 percent jump in net profit from P550 million to P661 million.

It said system-wide sales, a measure of all sales by both company-owned and franchised stores, grew by 18.1 percent to P16.55 billion.

JFC chairman and chief executive Tony Tan Caktiong attributed partly the fourth-quarter sales growth to new store openings and acquisitions.

Caktiong said the 74.6 percent improvement in the group's total overseas sales was driven by higher revenues from its new businesses like the Hongzhuangyuan restaurant chain in Beijing and Yonghe King in China.

"Our aim is to derive at least half of our revenues from outside the Philippines at some point in the future, both from organic growth and acquisitions," Caktiong said, noting that Jollibee's foreign operations have accounted for 15.9 percent of its system-wide sales.

Despite rising commodity prices, tightening of credit and the economic downturn, JFC continued to make major long-term investments last year. It opened a total of 186 new stores-- 110 in the Philippines and 76 abroad--and spent P2.8 billion in capital expenditures, up 35 percent year-on-year.

At end-December, JFC was operating a total of 1,515 stores in the country and 289 worldwide. Among its popular brands are Jollibee, Chowking, Greenwhich, Red Ribbon and Delifrance.