Jollibee notches R7-B net income in 2017
Jollibee Foods Corporation, the largest Asian food company, posted a 15 percent growth in attributable net income to R7.09 billion in 2017 from the R6.17 billion earned in the previous year due to record store openings.
In a disclosure to the Philippine Stock Exchange, the firm said system wide sales, a measure of all sales to consumers both from company-owned and franchised stores grew by 15.2 percent to R171.77 billion from R149.14 billion.
This was driven by the expansion of store network and strong same store sales. Jollibee opened a total of 465 new stores in 2017, the highest number of new stores opened in a year in its 39-year history.
For the entire year, sales of its restaurant chains in the Philippines grew by 13.2 percent while those abroad rose by 23.4 percent.
“Gross profit margins in the Philippines were below year ago level as our rate of price adjustments was behind cost increases, following JFC’s practice of implementing gradual price adjustments in order to help consumers adapt to rising inflation,” said JFC Chief Finance Officer Ysmael Baysa.
He added that, “the gradual price adjustments help to continuously drive volume growth of consumer visits per store despite rising inflation rate in the country. We expect to eventually recover our profit margins in 2018.”
“Meanwhile, all regions in JFC’s foreign markets: China, the United States, Southeast Asia, and the Middle East were profitable in 2017, with profit of total foreign business rising by 2.4 times compared to 2016.”
Meanwhile, Jollibee said it is raising its capital expenditures by 36.5 percent this year to R12 billion from the R8.8 billion spent in 2017 for new stores and renovation of existing stores both in the Philippines and abroad.
Jollibee also disclosed that its subsidiary Bee Good! Inc. is raising its stake in SJBF LLC (the parent company of the Smashburger business) to 85 percent by buying an additional 45 percent for $100 million pursuant to the mechanism in the agreement with Smashburger Master LLC.