The Philippine business reported a 9.5% growth in system-wide sales while the foreign business increased by 24.7% with China growing by 30.9%, Southeast Asia and the Middle East business by 22.5% and the United States by 13.3%. The Jollibee Group opened a total of 91 new stores in the first half of 2012; 51 in the Philippines and 40 abroad.
For the first six months of the year, system wide sales rose by 13.5% while revenues which were mainly sales from company-owned stores and commissaries and royalties from franchised stores grew by 15.6%.
JFC generated a net operating income of Php1.075 billion in the second quarter representing a growth of 7.8% versus year ago. Net income attibutable to Equity Holders of the Parent increased by 33.0% due to lower financing costs and to tax savings. For the first six months of the year, Net Income Attributable to Equity Holders of the Parent amounted to PhP1.594 billion, higher by 21.2% compared to the same period last year while basic earnings per share amounted to PhP1.535, or 20.2% higher than in the same period last year.
JFC's profit after income tax margin improved from 4.6% of revenues in the second quarter of 2011 to 5.3% of revenues in the second quarter of 2012; and for the first six months of the year, from 4.6% of revenues in 2011 to 4.8% of revenues in 2012.
JFC Chief Financial Officer Mr. Ysmael V. Baysa stated that healthy same store sales growth in most regions driven primarily by higher transaction count or volume of customers per store, cost improvement in support groups (General and Administrative Expenses in Corporate Offices) in the Philippines and in China, lower financing costs and tax savings were the factors that drove the significant growth in net income. He added that same store sales growth and higher cost of labor, rent and utilities remain as very important challenges in its business in China.
On rising world food commodity prices caused by severe drought in the US Midwest, Mr. Baysa stated that JFC has been closely watching the price trends particularly of corn, wheat, soybean and rice which had risen significantly, in the past two and half months based on the prices at the Chicago Board of Trade. Due to the long and complex supply chain and the use of local agricultural produce, however, the impact of these cost increases on JFC's chicken, beef, flour, vegetable oil and rice would be much less and with a lag time stretching as far as 6-8 from the time of the price change in world trading.
In the past, such as in 2008, at the height of world food commodity price increases, Jollibee Foods Corporation gradually adjusted the selling prices of its products over a period of time to compensate for the cost increases.
Regarding the impact of the flooding in Metro Manila and nearby provinces brought by torrential rains on August 7 and 8, the number of stores in the JFC Group with reported damages represented about 1.0% of the national store network. Most have resumed normal operations. The impact from the combined disruptions in customer visits and store operations is estimated at about -2.0% on the normal national sales on the month of August, mostly coming from Metro Manila and North Luzon.
The JFC Group operates the Philippine's largest restaurant network. As of June 30, 2012, it was operating a total of 2,022 stores in the country: Jollibee brand 756, Chowking 385, Greenwich 201, Red Ribbon 207, Mang Inasal 448 and Burger King 25. Abroad, it was operating 524 stores: Yonghe King (China) 278, Hong Zhuang Yuan (China) 53, Jollibee 83 (US 27, Vietnam 34, Brunei 11, Jeddah 7, Qatar 2, HongKong and Kuwait, 1 each), Read Ribbon in the US 32, Chowking 39, Chowking 39 (US 18, Dubai 16, Indonesia 2, Qatar 2 and Oman 1), Chow Fun (US) 3. San Ping Wang, JFC's new acquisition in China added 36 stores for a total of 2,546 stores worldwide.