HOMEGROWN fast-food giant Jollibee Foods Corp. posted a 12.7 percent growth in net profit last year to P5.3 billion as new store openings jacked up systemwide sales even as profitability was tempered by raw material cost increases.
System-wide sales rose by 13.3 percent to P117.9 billion, JFC told the Philippine Stock Exchange on Monday.
For the fourth quarter alone, net profit was up by 5.1 percent year-on-year to P1.63 billion on the back of a 12.3-percent year-on-year growth in systemwide sales to P32.42 billion.
“The raw material cost increases in 2014, averaging 5.4 percent brought pressure on our profit margins,” JFC chief finance officer Ysmael Baysa said in a press statement.
“We made important price adjustments and improved our store and manufacturing expenses during the year. We are now very close to fully covering these cost increases and look forward to the full recovery and improvement in gross profit margins in 2015 through lower cost of energy and more stable raw material prices.”
Baysa said JFC’s general and administrative expenses had also risen significantly – by 19.5 percent for the full year and 29.1 percent for the quarter year-on-year – due to the significant increase in the cost of supporting its information technology. “We view these expense increases as key investments for long term growth and expect these rising overhead costs to be more than offset by higher rates of business growth in the years ahead,” Baysa said.
“Despite these rising costs, our Philippine and foreign businesses made significant improvement in profitability. Our Philippine business achieved a double-digit growth rate while all foreign regions: the United States, China, the Middle East and Southeast Asia contributed profit to the JFC Group in 2014,” he said.
For 2015, JFC plans to invest P9.1 billion in capital expenditures, 68.5 percent higher than last year’s outlays, mostly for new store openings and renovations alongside investments in a local commissary alongside domestic capacity increase. About P6.7 billion will be for the Philippines, P1.7 billion for China and the balance for the US, Southeast Asia and the Middle East.
This year, JFC plans to open about 330 new stores worldwide: 220 in the Philippines and 110 overseas, to be financed mostly out of the company’s cash flow in 2015.
As of end-2014, JFC had 2,913 restaurants around the world. Of these, 2,301 were in the Philippines under the Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal and Burger King brands. Of its 612 stores abroad, the following are in mainland China Yonghe King (310); Hong Zhuang Yuan (42) and San Ping Wang (50).