Jollibee posts 13% growth in 2000 net profit

The Jollibee group of companies brushed aside a difficult business environment last year, posting a 12.8-percent growth in net income as the integration of the Chowking chain added more muscle to its operations.

Jollibee Foods Corp. chairman and CEO Tony Tan Caktiong said despite the weak economy and the generally difficult business conditions, their consolidated sales breached past the P15-billion mark to P15.366 billion or 19 percent better than the previous year. Net profit was at P907.5 million, nearly 13 percent higher than the P804.5 million in 1999.

"With retail sales of our Chowking subsidiary’s outlets included for the full year, consolidated systemwide sales would have exceeded the P20-billion mark," Tan Caktiong said. The acquisition of Chowking Foods Corp., the leader in the Chinese fastfood segment, was completed in March 2000.

The addition of the Chowking chain boosted JFC’s network to a total of 772 restaurants at the end of 2000. These include 374 Jollibee outlets, 193 Greenwich stores, 164 Chowking establishments, 19 Delifrance stands and 28 Jollibee and Chowking restaurants overseas.

Tan Caktiong said the inflationary effects of the continued depreciation of the peso coupled with the significant increase in prices of petroleum products were most pronounced during the second half of 2000. These, he added, "had a negative effect on the cost of doing business and also reduced the purchasing power of our Philippine consumers. On top of this, uncertainties due to the political situation weakened consumer and investor confidence."

He said the company tried to minimize price increases to lessen the impact on their customers, hence leading to slightly lower operating margins which made a dent on their profitability.

Another disappointing year for their pizza subsidiary Greenwich also took its toll on JFC’s bottomline last year through Tan Caktiong said the installation of a new management team in Greenwich has started to show some improvements.

"We think we have seen the worst and we are optimistic that business conditions will improve," he said.

JFC has consistently earned the distinction of being cited by international publications such as the Far Eastern Economic Review and Asian Business as the most admired Philippine company in terms of growth potential innovativeness in responding to consumer needs, a company that others try to emulate. – Conrado Diaz Jr.