By VG Cabuag
FAST-FOOD giant Jollibee Foods Corp. (JFC) said its income fell by more than 10 percent last year, as the rollout of its new technology systems hurt its profitability.
The company said its net income slid to P4.92 billion last year, a 10.2-percent drop from the P5.48 billion it reported in 2014.
Ysmael Baysa, the company’s CFO, said its earnings were affected by the almost P1 billion in expenditures it made for its information-technology upgrade, the increase in its network-development organization, and the $100 million worth of acquisition of US burger joint Smashburger.
He said the company also spent for the logistics cost needed to support its business in the country, as its business at home is growing more than expected.
“These are necessary investments helping make possible JFC’s short- and long-term sales and profit growth,” Baysa said.
“We do not expect the same rate of expense increases in 2016,” he said, adding that the company expects profit recovery starting this year.
JFC said it spent P903 million for extraordinary items last year which pulled down its operating income for the entire year.
For the fourth quarter alone, the company’s income fell by almost half to P961 million from the previous year’s P1.77 billion.
System-wide retail sales, which measure the company’s sales from both company-owned and franchised stores, grew by 11 percent last year to P130.73 billion from the previous year’s P117.89 billion.
Last year the company opened 303 stores, 246 of which are located in the Philippines. The rest are overseas, mainly in China, Southeast Asia and the Middle East.
“This is the highest number of store openings in a single year in JFC’s history. The new stores are performing well, particularly those in the Philippines, exceeding their sales and return on investments,” the company’s CEO Ernesto Tanmantiong said.
The company said it is allocating P10.4 billion in capital expenditures for this year, P7.5 billion of which will be for new stores and existing ones.
The company said that, despite its acquisition of Smashburger, its net cash position improved to P2.5 billion from the previous year’s P600 million.
By December, the company will operate 2,475 stores in the Philippines, most of which are under its flagship Jollibee brand. Overseas, the company has 642 stores, most of which are in China.