MANILA: The earnings of Philippine fast-food giant Jollibee Foods are recovering rapidly on the back of an overseas buying spree.
Ernesto Tanmantiong, the chief executive of Jollibee Group, was upbeat at the company’s annual meeting of stockholders on June 24. “My positive outlook is based on our track record,” he said. “We managed to be resilient in the face of adversity.”
The Philippine restaurant industry has been recovering as the country eases its way out of pandemic restrictions. Jollibee fried chicken, hamburgers and sweet spaghetti appeal to local tastes and are considered national dishes by many.
The company suffered a net loss of 11.5 billion pesos (US$208 million) in 2020 as a result of the Covid-19 pandemic, but reported sales of 153.5 billion pesos and a net profit of 5.9 billion pesos in December 2021.
In the fiscal year that ended March 2019, before the pandemic began, the company posted sales of 179.6 billion pesos and a net profit of 7.3 billion pesos.
The company announced an annual operating profit of 6.3 billion pesos in December 2021, almost comparable to 6.4 billion pesos the previous year.
Jollibee has overtaken McDonald’s as the country’s biggest fast-food chain in terms of sales. At some Jollibee stores, customers were unable to even buy chicken on July 6, which is National Fried Chicken Day in the Philippines, according to local media reports.
Jollibee’s rapid recovery in earnings is largely due to increased revenues from aggressive expansion overseas. Overseas sales have been growing by close on 20% a year, and accounted for about 42% of total sales by the end of 2021 compared to 27% the year before.
In 2021, the company spent 7.9 billion pesos on new outlets and refurbishing old ones. Of its 399 new stores, 314 (about 80%), are overseas.
Jollibee has also continued buying overseas brands and now operates nearly 20 in 34 countries and regions.
In November last year, Jollibee announced that it would pay US$12.8 million for a 51% stake in Milkshop International, a Taiwan-based company that operates more than 250 bubble tea shops worldwide.
Before that, the company bought a private fund that owned the Michelin-starred dim sum chain Tim Ho Wan. Another purchase was Los Angeles-based Coffee Bean & Tea Leaf.
By the end of May, Jollibee Group was operating 6,246 outlets worldwide, of which nearly half are overseas.
Jollibee and its brands can be found in China, North America, Europe, the Middle East and beyond. These are being mixed and matched in different regions. For example, Jollibee leads the way wherever Filipino overseas workers are to be found in large numbers, and Tim Ho Wan is prominent in China.
Jollibee Foods’ earnings have remained solid since the start of this year. In the first three months, group sales were up 24% to 42.8 billion pesos and net profit increased year on year by a factor of about 15 to 2.3 billion pesos.
“Systemwide sales of its businesses in China, North America, Europe, Middle East, Asia and Australia have already reached pre-pandemic levels driven by continued store expansion,” Tanmantiong told stockholders.