Jollibee’s profit spikes 1,400% in Q1 due to asset sale
System-wide sales, including those from franchised locations, rose 25.5%.
Jollibee Foods Corporation reported a profit spike in the first quarter, mainly due to one-time earnings from the sale of real estate, whilst restaurants continued their recovery from the pandemic slump.
In a stock exchange filing, the Philippine fast food giant said net income from January to March soared over 1,400% to PHP 2.31 billion. PHP 1.8 billion was gained from land transfers to CentralHub Industrial Centers, a subsidiary of JFC chairman Tan Caktiong’s DoubleDragon Properties Corp., and other real estate assets.
“The land conveyance is part of the JFC Group’s plan to invest in CentralHub, which the JFC board of directors approved on July 7, 2021. CentralHub is a company in the industrial real estate business,” the company said.
Q1 revenues were also up 23.6% PHP 42.86 billion, driven by better sales and the opening of new outlets.
System-wide sales, including those from franchised locations, rose 25.5% to nearly PHP 60 billion.
Inflationary pressures such as higher oil prices and raw material costs weighed on margins, which were “slightly below year-ago level”, JFC said, which supported earnings through price increases last year and the first quarter of 2022.
“Costs are accelerating because of higher inflation and broad-based supply chain challenges. JFC will take the necessary steps to protect its margins including implementing cost improvement and revenue management initiatives,” Richard Shin, JFC’s chief financial officer, said.
The company continued to expand during the quarter, having opened 107 new stores while closing down 58 outlets.
“Despite the challenges brought about by the surge in Omicron variant in some markets where JFC operates and the increase in prices of raw materials and energy, our business performed well and even set new record for sales for a first quarter,” added JFC CEO Ernesto Tanmantiong.