Jollibee Now Positioned For Earnings Growth

May 8, 1998 PSE CIRCULAR FOR BROKERS NO. 988-98 JOLLIBEE NOW POSITIONED FOR EARNINGS GROWTH Jollibee Foods Corporation, the country's largest fastfood company, announced that it has retired all of its foreign currency debt to strongly position it to take advantage of its leading and well-entrenched position in the Philippine fastfood market. During its stockholders meeting yesterday, JFC chairman Tony Tan Caktiong said that Jollibee shall continue its strategic program to expand the fastfood store network of both the Jollibee and Greenwich brands. As of the end of 1997, the Jollibee chain had 243 stores, while Greenwich had 121 stores. Tan Caktiong explained that Jollibee raised P1.36 billion from the sale of shares undertaken by the company in conjunction with the 220 million warrants offering of Queenbee Resources Corporation, its special purpose vehicle for warrant issues. cdlex The company has fully paid off its foreign currency obligations, which at the end of 1997 amounted to US$28.9 million, from the proceeds of the share issuance. "With only P27 million in Peso-denominated debt in our books, this will make us virtually debt-free, thus strengthening our balance sheet and fortifying our earnings capability," he added. Jollibee reported first quarter consolidated net income growth of 30% this year, despite the pressures on the Philippines spawned by the Asian contagion. Net income totaled P157.6 million, compared to P121.1 million in the same period in 1997. It also recorded improvements in gross revenues, which went up 26% to P2.43 billion from the P1.92 billion the year before. Systemwide sales of company-owned and franchised stores increased 33% to P3.18 billion from P2.38 billion last year on the back of new stores put on line from its expansion program, as well as same-store sales volume growth. He reported that the company plans to put up additional Jollibee stores and Greenwich stores this year. He added that Greenwich has now become a major revenue and bottomline contributor, and that it shall aim for leadership in the pizza pasta segment in 1998. Greenwich accounted for 10 percent of JFC's P11.2 billion systemwide sales in 1997. cdlex "We are confident about our prospects and our capability to submit future growth and profitability, regardless of the economic situation and the apparent uncertainties brought about by the regional financial uncertainties," he said. Tan Caktiong also reported that the company opened three new Jollibee stores abroad in Xiamen, China, Malaysia and Papua New Guinea, and will soon launch its presence in the United States with a branch to be opened in Daly City on June 12. The company was recently awarded by the Asian Business Magazine as the Philippines' Top Company and Asia's Top Retail and Consumer Company last April, based on a survey of the region's business executives and professionals. It also finished a strong second as the country's best managed company in last year's Far Eastern Economic Review top 200 corporations.