Asset sale pushed Jollibee profit to swell by 1,400% in Q1
Billionaire Tony Tan Caktiong’s fast-food giant Jollibee Foods Corp. (JFC) booked a profit spike in the first quarter, mainly because of one-time earnings from the sale of real estate, while its restaurants continued their recovery from the pandemic slump.
In a stock exchange filing on Thursday, JFC said net income from January to March soared over 1,400 percent to P2.31 billion.
This was after the company recorded a P1.8-billion gain from land transfers to CentralHub Industrial Centers, a subsidiary of Tan Caktiong’s DoubleDragon Properties Corp., and other real estate assets.
New outlets
“The land conveyance is part of the JFC Group’s plan to invest in CentralHub, which the JFC board of directors approved on July 7, 2021. CentralHub is a company in the industrial real estate business,” the company said in its filing.
JFC’s first quarter revenues were also up 23.6 percent to P42.86 billion, driven by better sales and the opening of new outlets.
System-wide sales, including those from franchised stores, also rose 25.5 percent to nearly P60 billion.
JFC said inflationary pressures such as higher oil prices and raw material costs weighed on margins, which were “slightly below year-ago level.” It supported earnings through price increases last year and the first quarter of 2022.
“Costs are accelerating because of higher inflation and broad-based supply chain challenges. JFC will take the necessary steps to protect its margins including implementing cost improvement and revenue management initiatives,” Richard Shin, JFC chief financial officer, said in the filing.
JFC continued to expand during the quarter as it opened 107 new stores while closing down 58 outlets.
“Despite the challenges brought about by the surge in [COVID-19 cases caused by the Omicron variant] in some markets where JFC operates and the increase in prices of raw materials and energy, our business performed well and even set a new record for sales for a first quarter,” company CEO Ernesto Tanmantiong said in the filing.
