Jollibee Reports Double-digit Growth in 4Q Sales, Net Income

Pasig–(PHStocks)–Jollibee Foods Corp.‘s (PSE: JFC) system wide sales, a measure of all sales to consumers both from company-owned and franchised stores rose by 18% in the fourth quarter of 2011 compared with sales from the same period in 2010. Sales in the Philippines grew by 17.8% while those abroad increased by 19%, led by China with a growth of 27.5%, and Southeast Asia and the Middle East with 23.3%.

In the Philippines, the acquisition of Mang Inasal and Burger King contributed 9.2% of the 17.8% sales growth, while the rest of the brands grew by 8.6%. Sales per store across all brands grew strongly versus year-ago, driven by higher transaction count, a measure of volume of customer purchases.

Net Income Attributable to Equity Holders of the Parent and Earnings Per Share grew versus the previous year by 10% and 9.8%, respectively – the highest rates of quarterly profit growth registered in 2011. Net Income as a percent of revenues improved from 4.6% in the first nine months of the year to 6.5% in the fourth quarter. This improvement offset the negative profit growth rate in the first half of the year and brought 2011 profit at par with the previous year. Net Income Attributable to the Equity Holders of the Parent reached PhP3.213 billion while Earnings per Share amounted to PhP3.12, just slightly above the amounts in 2010 of PhP3.198 billion and PhP3.118, respectively. The Net Income Margin of 6.5% for the quarter, however, was lower than the 7.1% registered last year, primarily due to lower Gross Profit margin, caused by raw material cost increases, partly offset by lower operating expenses.

During the year, JFC made PhP6 billion in capital investments consisting of PhP4 billion in fixed assets, mostly in new stores and supply chain facilities; and PhP2 billion in projects related to the acquisition of new businesses. The Jollibee Group opened a total of 260 new stores in 2011, of which 167 were in the Philippines, led by Mang Inasal with 86 new stores and Jollibee with 40. These store openings brought JFC’s total network in the Philippines past the milestone of 2,000 restaurants. Abroad, JFC opened a total of 93 new stores, led by Yonghe King in China with 70 and Jollibee Vietnam with 11. It also built and started operating the Jollibee Food Processing in Anhui Province, China, and its Research & Development Center in Shanghai, and began constructing its Distribution Center in Manila. In 2011, JFC made investments that were related to the following acquisitions: Chowking Stores in the United States from their licensee, Burger King business in the Philippines, and SuperFoods business in Vietnam and other Southeast Asian countries.

The above PhP6 billion capital investments were financed by a net bank borrowing of PhP1.4 billion and the balance PhP4.6 billion by its previous year’s cash reserves and by cash generated from 2011 operations.

The JFC Group operates the Philippines’ largest restaurant network. As of December 31, 2011, it was operating a total of 2,001 stores in the country: Jollibee brand, 745; Chowking, 391; Greenwhich, 205; Red Ribbon, 208; Mang Inasal, 429; and Burger King, 23. Abroad, it was operating 468 stores: Yonghe King, 265; Hong Zhuang Yuan, 52; Jollibee, 78 (US: 27; Vietnam: 31; Brunei: 11; Jeddah: 7; Hong Kong and Qatar: 1 each); Red Ribbon in the US, 34; and Chowking, 39 (US: 19; Dubai: 16; Indonesia: 2; Qatar: 2), for a total of 2,469 stores worldwide.

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