Jollibee income slightly down due to high costs

Profits of fastfood giant Jollibee Foods Corp. (JFC) slightly fell last year, squeezed by higher cost of raw materials and fuel prices, according to a top company official.

At the sidelines of the Financial Executives Institute of the Philippines’ general membership meeting yesterday, Jollibee chairman and chief executive officer Tony Tan Caktiong said the firm’s topline has been affected by higher commodity prices like chicken, beef, and rice.

Tan Caktiong, however, said sales remained strong last year as the consuming public continued to dine at the restaurants owned by the Jollibee Group in spite of an economic slowdown.

He expects sales to grow at the same level as last year   even as it continues its expansion program.

“JFC’s capex and the number of new store openings this year will be the same level as last year,” Tan Caktiong said.

In 2008, JFC spent P4.2 billion and allotted P2.5 billion for acquisitions. It also opened 147new stores during the same period, creating 7,000 jobs.

Tan Caktiong said the group continues to be on the lookout for acquisitions as it seeks to further improve its profitability. 

“We dont know to what extent the global financial crisis will affect our country but we remain optimistic that we will be able to weather the storm. We will continue to invest in the long-term at worst times. We believe there will be enormous opportunities for our businesses to grow in the medium to long term,” Tan Caktiong said.

“We want to serve better quality food at affordable prices,” Tan Caktiong added.

In the nine months ending September 2008, Jollibee reported a 9.7 percent growth in net profit to P1.64 billion due to higher costs of raw materials and utilities. System-wide sales increased 10.9 percent to P41.61 bilion.

As of end-September 2008, the Jollibee Group had opened a total of 117 stores in the first nine months, bringing total branch network to 1,490 comprising 641 Jollibee, 379 Chowking, 231 Greenwich, 205 Red Ribbon, 27 Delifrance, and seven Manong Pepe’s.

On the international front, Jollibee operates 228 stores abroad mostly Yonghe King in the People’s Republic of China with 127 stores for a total of 1,718 stores in 11 countries worldwide.