Extra costs eat into Jollibee’s 2015 profit

MANILA, Philippines – Jollibee Foods Corp., the country’s largest food service company, posted lower earnings last year on account of extra-ordinary expenses but managed to finish 2015 with robust revenues.

JFC reported a 10.4 percent decline in net income last year to P4.81 billion from P5.36 billion in 2014.

In the fourth quarter alone, JFC’s profit fell 44.9 percent year-on-year to P948 million.

“Our 2015 net income was adversely affected by significant short term costs amounting to almost P1 billion. These costs were associated with our information technology upgrade, the increase in our network development organization, the acquisition of Smashburger, and the extra supply chain and logistics costs needed to support our business in the Philippines that has been growing faster than we anticipated,” JFC chief financial officer Ysmael Baysa said.

Without the extra-ordinary expenses, JFC said its income would have grown 7.8 percent last year and 8.2 percent in the fourth quarter.

Baysa, however, said these are necessary investments that would help make possible JFC’s short and long term sales and profit growth.

Despite the lower earnings, JFC recorded an 11.2 percent hike in revenues to P100.78 billion from P90.67 billion the previous year.

In addition, system-wide retail sales grew 10.9 percent to P130.73 billion in 2015.

JFC opened a total of 303 stores last year, its highest store opening in a single year, in a bid  to further cement its position as the country’s largest fastfood chain.