15% profit rise for Jollibee despite fewer stores

By Miguel Camus, Business Mirror

Posted at Feb 18 2010 09:26 PM | Updated as of Feb 19 2010 06:56 PM

MANILA, Philippines - Listed fast-food giant Jollibee Foods Corp. said on Thursday profits rose in the double digits last year despite opening fewer stores.

For the fourth quarter of the year, Jollibee said net income in the October-December period rose 23.1 percent to P813 million from 2008. This brings the company’s 2009 full-year net income to P2.66 billion, or 14.6 percent better than the previous year.

The better figures came as Jollibee acknowledged that it took a more conservative approach in 2009.

The company said capital spending declined 48 percent to P2.5 billion in 2009 compared to 2008, and follows the recent closing of some of its overseas brands.

“The action taken by management in 2009 against slowing economic growth contributed to Jollibee’s modest sales growth but brought strong profit and cash flow results,” chief finance officer Ysmael Baysa said in a statement. “Moving forward, the company is in an even stronger financial position to continue to make major investments in new stores and commissaries.”

This year, Jollibee is planning to spend P4.8 billion, or almost double last year’s figure, to invest in “mergers and acquisitions.”

Meanwhile, system wide sales, a measure of all sales to consumers, also grew 9.6 percent to P63.73 billion in 2009. Revenues during the period hit P48.06 billion, marking a 9.5-percent growth from 2008.

“In 2009, the company grew the business by almost 10 percent, achieved its net profit target and exceeded its cash flow objective. The results were strong overall, considering the stressed and changing economic conditions in markets where we do business,” said Jollibee chief executive officer Tony Tan Caktiong.

“We look forward to a more robust growth in 2010 particularly in the Philippines and China, as we now have there better products, price points, store quality and marketing campaigns driven by even stronger organizations,” he added.

Tan said sales growth in the fourth quarter was healthy for most brands in the Philippines, China, Vietnam and the Middle East. The business in the US, however, was adversely affected by weak consumer spending.

Last year, the Jollibee Group opened a total of 168 stores worldwide: 110 in the Philippines and 58 overseas. These compare with 186 new stores opened in 2008—110 in the Philippines and 76 stores overseas; plus 38 stores added from the acquisition of Hong Zhuang Yuan in Beijing.

The JFC Group operates a total of 1,557 stores in the? country: ?Jollibee brand (686), Chowking (399), Greenwich (226), Red Ribbon (207), Delifrance (24) and Manong Pepe’s (15).

It was also operating 325 stores abroad namely: ??Yonghe King in the People’s Republic of China (160), Jollibee (57 stores mainly in the US with 27, Vietnam with 14 and Brunei with 11), Red Ribbon 35, all in the US, Chowking 32 (mostly in the US with 16 and Dubai with 14) and Hong Zhuang Yuan (41).