Jollibee posts strong 2nd quarter growth

Fastfood leader Jollibee Foods Corp. (JFC) recovered from a slow first quarter to bounce back with improved sales during the next three months, prompting its officials to expect higher growth figures by the end of the year.

"As we had expected, our business growth accelerated to 14 percent during the important second quarter of 2002, building on our performance in the prior quarter," JFC chief financial officer Jose Miguel Navarrete said in a briefing yesterday.

The JFC group includes the flagship Jollibee burger-chicken chain, Oriental food network Chowking, pizza store Greenwich and bakery-cafe Delifance.

For the second quarter, systemwide sales reached P6.8 billion, up by 14 percent with net profit surging 26.6 percent to P296 million. This brings JFC’s net income in the first semester to P494 million, an improvement of nearly 10 percent from a year ago and a turnaround from a nine-percent loss in the first quarter, on the back a 12.4-percent jump in systemwide sales to P13 billion.

"Cost containment initiatives implemented across our system have been able to offset increases in fuel, utility and labor costs," Navarrete said. "With the healthy business growth during the quarter, an improvement in margin levels compared with that of last year has been delivered and this has resulted in the significant increase in operating profits."

He added that aside from the improved margins, other sources of income growth would be provided by the reduction in utility costs starting July, with the cutback in the purchased power adjustment (PPA) in electricity bills, as well as a significant saving of about P7-P8 million per quarter on their P850-million loan, which was converted from a fixed interest rate to a floater to take advantage of the prevailing low interest regime.

Jollibee chairman and CEO Tony Tan Caktiong added that with the positive effects of a stable peso and the improvement of other factors like inflation and interest rates, "this favorable trend should continue over the medium term and our business is well-poised to capitalize on the expected opportunity in the balance of the year."

With the strong second quarter output, the company officials said JFC’s sales and income growth this year could range between 10 to 15 percent.