:. Food Industry News

Categories: Corporate Results

Manila's Jollibee Profit Up with New Outlets, Cost Control

Source: Reuters
14/08/2007

Manila, Aug 14 - The Philippines' biggest fast-food chain, Jollibee Foods Corp, said on Tuesday its quarterly profit rose by a third as new outlets boosted sales and as it kept tight control over costs.

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The Jollibee group, which is expanding aggressively overseas while continuing to outsell McDonalds and KFC in its home market, said strong consumer spending in a growing economy and spending related to the congressional elections in May boosted its profits.

The company, which started as an ice cream house in the late 1970s, said net income attributable to equity investors in the April to June period rose to 793.4 million pesos ($17.4 million) from 603.1 million pesos a year ago.

A firmer peso, the company's strong buying power and cost cutting measures helped to keep its gross profit margin at 53.8 percent of total sales.

Jollibee is expected to post net income of 2.56 billion pesos this year, up 16 percent from 2.2 billion pesos in 2006, based on Reuters Estimates.

Total sales of company-owned and franchised stores climbed 15.2 percent to 13.2 billion pesos in the second quarter. Some analysts use Jollibee's sales data as an indicator of consumer spending in the Philippines.

Consumption makes up about 70 percent of the Philippine economy.

Jollibee -- which operates the flagship hamburger and chicken chain with the same name, pasta and pizza store Greenwich, Chinese fast-food chains Chowking and Yonghe King, the Red Ribbon bakery, and the Delifrance delicatessen -- opened a total of 65 stores locally and abroad in the first half.

The group now has 1,385 stores locally and 174 stores in Hong Kong, China, Vietnam, Dubai, Indonesia, and the United States.

Shares of Jollibee closed unchanged at 53 pesos while the main index slid 0.11 percent. The stock lost 3.7 percent in the second quarter, underperforming the main index which gained 14 percent in that period.



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