Shakey’s Pizza says consolidated net income up 5% in H1 year-on-year

Shakey’s Pizza Asia Ventures Inc. (PIZZA) posted a consolidated net income of P418 million in the first half of 2019, up 5% year on year.

Net income margins in the first six months of 2019 saw a slight increase to 10.8% from 10.7% a year earlier, the company said in a regulatory filing submitted by Giovanna Vera, head of Investor Relations.

The company owns the perpetual rights to the Shakey’s brand for the Middle East, Asia (excluding Japan and Malaysia), China, Australia, and Oceania.

Gross profit stood at P1.1 billion, up 5% year-on-year. “For the second quarter alone, growth was at 9% with gross margins expanding by 120 basis points versus same period last year,” according to PIZZA.

EBITDA margins likewise expanded by 110 bps in Q2 2019, resulting in a first half EBITDA margin of 20.1%or 50 bps higher year-on-year.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, grew by 7% from a year earlier. “The pick up from the 2% growth as of end-March was driven primarily by higher systemwide sales due to new stores and operating margin expansion from lower costs and improved efficiencies.”

Systemwide sales, a measure of both company-owned and franchised stores’ topline, grew by 8% in the first half, hitting P5.0 billion as of end-June 2019.

Operating income posted grew by 13% in the second quarter, from negative 1% as of end-March 2019.

Operating margins in April to June expanded by 140 bps year-on-year on the back of subdued input prices and enhanced operating efficiencies.

PIZZA is opening 15 more outlets in the Philippines this second half of 2019.

The company is mainly challenged by more competition in the restaurant space and the promotion-heavy initiatives of various industry players.

“We will likely miss our target SSSG (same-store sales growth) of 3 to 5% for this year, but remain positive that we can make up for it via margin expansion and bottom line improvements with the efficiency-enhancing and cost reduction initiatives in place, said Vicente Gregorio, president and CEO of PIZZA.

In January to June, the company opened five new Shakey’s stores in the country and one store abroad. It closed the acquisition deal of Peri-Peri Charcoal Chicken on June 1, adding another 23 stores to its portfolio. —VDS, GMA News