Jollibee sales to remain flat as crisis seen to cut demand

MANILA, Philippines - Jollibee Foods Corp., the Philippines' largest owner and operator of fast food restaurants, expects sales to remain flat for the year amid the global uncertainty. “There is some holding back on demand," Tony Tan Caktiong, the company’s chairman and chief executive officer, told reporters at the sidelines of the Financial Executives Institute of the Philippines meeting in Makati City. “The demand for fastfood will still be there. In 2007, our profits fell slightly. It should recover [this year] with lower commodity prices this year," Tan Caktiong said. The company’s earnings last year were mainly impacted by higher rice prices in the first semester and chicken in the third quarter of the year. Jollibee Foods, which also owns and operates Red Ribbon, Greenwich, Chowking, Delifrance and Manong Pepe's, has yet to release its 2008 earnings. “We may be able to cut our products' prices if we see costs back to their 2007 levels," Tan Caktiong added. Fuel, rice, chicken, potatoes, beef, and cooking oil are considered as the company’s biggest expenditures. In 2008, inflation reached a 17-year high of 12.5 percent in August. Average inflation last year was at 9.3 percent from 2.4 percent in 2007. Tan Caktiong also said the company may also opt to be cautious in its capital outlay for the year. In 2008, Jollibee Foods spent P4.2 billion for the roll out of its new stores and expenses, on top of the P2.5 billion it allotted for acquisitions. After it bought Beijing-based Hong Zhuang Yuan, Taipei-based Lao Dong and Chun Sui Tang, and US-based Chow Fun Holdings LLC, the company remains on the lookout for other possible acquisitions, Tan Caktiong said. With a deep recession in the US, there may be acquisition opportunities for Jollibee Foods in that country, the world’s largest economy. - GMANews.TV