Jollibee sales up 11% in Q1; net profit down to P198M

Despite a generally slow first quarter, fastfood giant Jollibee Foods Corp. (JFC) and its subsidiaries were able to register higher sales but earnings suffered a bit as the company’s interest expenses from loans incurred last year weighed down on its bottomline.

In a briefing, JFC vice president for corporate finance Miguel Jose Navarrete said systemwide retail sales increased 11 percent to P6.1 billion during the period but net income contracted by 8.8 percent to P198 million, pulled down by an additional P27 million in interst expenses and lower interest income.

"We started the year on a slow note, coming from a soft fourth quarter (2001)," he said.

Based on the company’s monthly same-base sales growth record, the impact of the Sept. 11 terrorist attack was also felt in the consumer food sector as sales growth tracked negative territory since November.

However, Navarrete said same-base (or same-store) sales has since recovered last March and bounced back into positive growth since April to lead off the Jollibee group’s strongest quarter.

He remained optimistic that by the end of this year, the JFC group would post a 10-15 percent improvement in its operating profit as revenues from the additional stores stream in.

"Cost containment initiatives implemented across our system have somewhat offset the significant increase in fuel, utility and labor costs, enabling a general maintenance of margin levels with that of last year and resulting in a modest and expected increase in operating profits," JFC chairman and CEO Tony Tan Caktiong said.

Despite a decrease in its net income, JFC managed a 4.2-percent gain in its operating profit to P286.5 million in the first quarter.

JFC will be spending a total of P1.4 billion this year, almost the same level as last year’s capital expenditures. Navarrete said about P700 million will be funneled into the construction of its second commissary while the balance will be alloted to the establishment of additional stores.

The company plans to put up 67 new outlets this year and as of the first quarter, 18 have been opened. At end-March, there are a total of 826 local stores in the JFC chain, lower than the 832 stores in end-2001 due to the closure of 24 stores during the first quarter.

The flagship Jollibee stores make up half of the total or 418. Chowking has 195, Greenwich, 187, and Delifrance, 26. In addition, JFC has 28 stores abroad, comprised of 21 Jollibee, six Chowking and the lone Tokyo Teriyaki House, its newest acquisition expected to open four new branches in the US this year.