Jollibee sets P17-billion capital spending for 2019
JOLLIBEE Foods Corp. (JFC) is beefing up capital spending this year to P17.2 billion as it continues to expand its store network this year, following the homegrown food giant’s double-digit profit growth in 2018.
In a statement issued on Thursday, JFC said its capital spending in 2019 will be almost double its actual spending last year. The budget will be used for new stores, renovation of existing stores, and investments in manufacturing plants.
The listed firm said it disbursed P9.6 billion in capital investments last year, most of which went to the construction of new stores, renovation of existing stores, and also for supply chain facilities.
JFC’s aggressive spending plan comes amid its strong performance in 2018. The company saw its attributable profit rise by 17.1% to P8.33 billion from the P7.11 billion it posted in 2017. Revenues also climbed by a fifth or 20.6% to P158.67 billion last year.
The increase was supported by a 23.5% uptick in systemwide retail sales, or the measure of all sales to customers from both company-owned and franchised stores, to P212.19 billion. Without the consolidation of United States burger chain Smashburger into JFC’s portfolio, systemwide sales would have grown by 16.6% in 2018.
In the fourth quarter, JFC’s attributable profit grew by 11.9% to P2.24 billion, on the back of a 22% increase in systemwide retail sales to P59.01 billion and an 18.2% jump in revenues to P43.83 billion.
Sales from JFC’s restaurants in the Philippines alone grew by 15.1%, mainly due to new stores which accounted for 8.2% of the growth. Same-store sales growth stood at 6.9%, referring to the performance of stores that have been open for at least 15 months.
“The Philippine business performed strongly in 2018 despite rising inflation rate and slowing GDP growth...Operating margin even improved slightly compared with 2017,” JFC Chief Executive Officer Ernesto Tanmantiong said in a statement.
Meanwhile, sales of its stores abroad surged by 55.5%, led by its business in North America, thanks to the consolidation of Smashburger.
Mr. Tanmantiong noted that without its acquisitions, JFC’s foreign business would have grown by 22.1%, which is in line with their long-term growth model.
“We opened 502 new stores worldwide or a rate of 1.4 new stores per day. We continue to pursue our aspiration to become one of the top restaurant companies in the world,” Mr. Tanmantiong said.
Of its total store openings last year, 317 were in the Philippines, while 185 were located abroad. It ended the year with a total of 4,521 stores, 19.1% higher yearon-year, and entered four new markets, namely, Italy, Macau, United Kingdom, and Malaysia.
JFC’s brands include Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, Pho 24, Yonghe King, Hong Zhuang Yuan, and Highlands Coffee, among others.
Shares in JFC rose 1.65% or P5.20 to close at P321.20 each at the stock exchange on Thursday.