Fastfood chain operator Jollibee Foods Corp. said it will boost its capital expenditures by 68.5 percent in 2015 to P9.1 billion to roll out more stores in the Philippines and abroad. The company spent P5.4 billion in 2014.
Jollibee said in a disclosure to the stock exchange it planned to open 330 stores this year, including 220 in the Philippines and 110 in other countries.
It said of the P9.1-billion programmed capital spending for 2015, P6.7 billion would be for the Philippines, P1.7 billion for China and the balance would go to the US, Southeast Asia and the Middle East.
The fastfood giant is accelerating its capital spending this year, after it posted a 12.7-percent increase in net income in 2014 to P5.26 billion from P4.67 billion in 2013.
The company said system-wide retail sales, a measure of all sales to consumers in company-owned and franchised stores, grew 13.3 percent in 2014 to P117.89 billion from P104.09 billion in 2013.
The growth was driven by an 8-percent same-store sales growth for the local and overseas operations and a 5.4-percent growth in store network.
Jollibee opened 234 stores in 2014, including 169 outlets in the Philippines and 65 stores in foreign markets.
Jollibee chief finance officer Ysmael Baysa said the increase in price of raw materials as well as higher general and administrative expenses to support information technology-related costs brought pressures on the company’s profit margins.
“We are now very close to fully covering these cost increases and look forward to the full recovery and improvement in gross profit margins in 2015 through lower cost of energy and more stable raw material prices,” Baysa said.\
“We view these expense increases as key investments for long term growth and expects these rising overhead costs to be more than offset by higher rates of business growth in the years ahead,” Baysa said.
Jollibee signed a joint venture agreement with Jasmine Asset Holdings Ltd. in December to operate Dunkin’ Donuts restaurants in selected territories in China.