MANILA, Philippines – Jollibee Foods Corporation is expecting lower profit growth for 2015 amid rising cost of raw materials and the faster roll out of new stores.
Jollibee Chief Finance Officer Ysmael V. Baysa said that the company’s budget this year assumes a profit growth that is lower than historical rate as rising raw material prices continue to bring pressure on its profit margins, as well as its heavy investments in in store network expansion and in information technology.
“We look forward to continued double-digit growth in sales and profit in the years ahead, sustaining or even improving on our trajectory in the past 5 years,” Baysa said in a statement.
Improved net income
In 2014, Jollibee recorded a 14.8% increase in net income to P5.36 billion ($120.53 million) versus P4.67 billion ($105.11 million) recorded in the same period in 2013 based on audited figures.
The audited net income figure was also 1.8% higher than the P5.27 billion ($118.50 million) 2014 net income reported on February 23, which was based on unaudited financial statements.
Jollibee said the improvement in its 2014 audited net income over the earlier report resulted mainly from a favorable inventory variance, arising from the reconciliation of inventory balance per physical count versus balance per books.
“The result of the reconciliation was not yet available at the time the disclosure was made,” the fastfood giant said.
System-wide retail sales, a measure of all sales to consumers both from company-owned and franchised stores, grew 13.3% in 2014 to P117.89 billion ($2.65 billion) compared to P104.09 billion ($2.34 billion) in 2013.
The sales growth for 2014 was driven by an 8% same store sales growth for the local and overseas operations and a 5.4% growth in store network.
For 2015, Jollibee earmarked P9.1 billion ($204.79 million) in capital expenditures (capex), 61.3% higher than the P5.64 billion ($126.93 million) spent in in 2014 as it plans to open 330 stores for 2015 – 220 in the Philippines and the rest overseas.
As of end-February 2015, Jollibee has a network of 2,933 stores worldwide.
The Jollibee group is operating 2,317 restaurant outlets in the Philippines; 865 Jollibee stores; Chowking, 415; Greenwich, 214; Red Ribbon, 329; Mang Inasal, 450; and Burger King, 44.
Abroad, Jollibee is operating 616 stores: Yonghe King (China) 314; Hong Zhuang Yuan (China), 43; San Pin Wang (China), 52; Red Ribbon in the US, 34; Jinja Bar in the US, 3, and Chowking, 47 (US, 19; United Arab Emirates, 20; Qatar, 5; Oman, 2; and Kuwait 1).
Flagship Jollibee has 123 stores outside the Philippines: US, 32; Vietnam, 60; Brunei, 12; Saudi Arabia, 10; Qatar, 3; Kuwait, 3; Singapore, 2; and Hong Kong, 1.
Jollibee is also looking at Toronto as the site of its first store in Ontario, Canada in 2015. (READ: Jollibee to rise in Toronto) – Rappler.com
$1 = P44.47
Toronto, Ontario Canada streetcar image from Shutterstock
Jollibee mascot image from Wikicommons