Jollibee posts 15% growth in net income

Fast-food giant Jollibee Foods Corp. (JFC) grew its net profit attributable to equity holder of parent by 15 percent last year to P7.09 billion as more stores opened and sales remained robust.

For the fourth quarter alone, net profit rose by 11.7 percent year-on-year to P1.98 billion, Asia’s most valuable restaurant chain disclosed to the Philippine Stock Exchange on Wednesday.

The full-year performance brought JFC’s return on equity to 19.3 percent, stable from 19.2 percent in the previous year.

System-wide sales grew by 15.2 percent for the whole year to P171.77 billion, driven by strong sales from a network that also saw a record expansion last year. Sales in the Philippines alone grew by 13.2 percent last year while overseas business rose by 23.4 percent.

JFC opened 465 stores in 2017, the highest number of new stores opened in a single year in its 39-year history. It ended last year with 3,797 stores, up by 16.7 percent from the previous year. Of new store openings, 328 were in the Philippines and 137 were overseas.

For the fourth quarter alone, system-wide sales grew by 16.9 percent year-on-year to P48.38 billion.

Operating income for the full year grew by 9.4 percent to P7.07 billion, while operating income for the fourth quarter declined by 4.6 percent year-on-year to P1.48 billion.

Operating income margins for the fourth quarter and the entire year decreased by 0.9 percentage and 0.3 percentage points, respectively, due to the rapid increase in the cost of raw materials and freight alongside higher store and manufacturing expenses.

“Gross profit margins in the Philippines were below year-ago level as our rate of price adjustments was behind cost increases, following JFC’s practice of implementing gradual price adjustments in order to help consumers adapt to rising inflation,” JFC chief financial officer Ysmael Baysa said in a press statement on Wednesday.

“The gradual price adjustments help to continuously drive volume growth of consumer visits per store despite rising inflation rate in the country. We expect to eventually recover our profit margins in 2018,” he added.

Baysa also noted all overseas markets—China, United States, Southeast Asia and the Middle East—were profitable in 2017. Total profits from these businesses surged by 2.4 times the level in the previous year.

JFC spent P8.8 billion for capital outlays last year, mostly covering new stores and supply chain facilities. This year, it has earmarked P12 billion for expenses. —DORIS DUMLAO-ABADILLA