Jollibee expects 17% profit growth

FAST-FOOD giant Jollibee Foods Corp. is hoping to sustain its profitability this year despite declining dollar remittances from Filipinos working abroad.

Jollibee chairman and chief executive Tony Tan Caktiong, in an interview after the company’s annual stockholders meeting, said he hoped to maintain the first quarter’s 14-percent growth in sales and 17-percent growth in net income for the remainder of the year.

“Despite the difficult economic environment, we believe that there are still enormous growth opportunities for our business to grow in the medium and long term… here in our country and outside of our country,” he said.

Rising raw materials costs that hurt profitability last year had stabilized, but a drop in remittances by overseas workers could take a bite out of store sales, Tan Caktiong said.

“We continue to monitor the remittance figure for the second half of the year. We are concerned about remittances because there is correlation between remittances and the company’s sales,” he said.

But Tan Caktiong also noted that people would continue to eat out and that the fast-food industry had been quite resistant to economic difficulties.

Despite the economic slowdown, the company plans to open another 186 stores this year, of which 100 will be in the Philippines.

Tan Caktiong said the company would maintain its store openings this year as the economy seemed to be holding up despite the global financial crisis.

The fast-food giant is also planning to spend P4 billion in capital expenditures, and mainly on new stores, renovation of existing stores, commissary facilities and a logistics center.

As of the end of March, the group was operating 1,515 stores in the Philippines and 306 stores abroad.

In the Philippines, the group operates various brands including its flagship store Jollibee, Chowking, Greenwich, Delifrance and Red Ribbon.

Overseas, the group operates various restaurants including Yonghe King, Hong Zhuang Yuan, Lao Dong and Chun Shui tea house.–Jenniffer B. Austria, Manila Standard Today