A SUBSIDIARY of Jollibee Foods Corp. (JFC) is forming a $13-million joint venture with Singapore’s Dim Sum Pte. Ltd. (DSPL) to bring the Tim Ho Wan brand in China.
In a disclosure to the stock exchange yesterday, JFC said its wholly-owned subsidiary Golden Plate Pte. Ltd. has signed a joint venture agreement with DSPL on Wednesday.
The joint venture will now be incorporated, after which it will enter a unit franchise agreement with Tim Ho Wan Pte. Ltd. to operate Tim Ho Wan stores in Shanghai and other Chinese cities.
JFC’s Golden Plate will infuse up to $7.8 million in the joint venture to hold a 60% stake, while DSPL will own the remaining 40%.
DSPL, a wholly-owned subsidiary of Titan Dining Holdings Pte. Ltd., owns and operates Tim Ho Wan stores in Singapore.
“The Tim Ho Wan deal provides JFC with an excellent opportunity to operate and expand one of the known Michelin-starred dim sum restaurant chain brands,” JFC said in its disclosure.
“The (joint venture) is not expected to have an immediate material impact on the JFC Group’s sales, profitability and balance sheet as it is not planning for an aggressive expansion in 3 to 5 years. The first few years will be focused on developing and building the store model and economics,” it added.
In May last year, JFC announced its wholly-owned subsidiary Jollibee Worldwide Pte. Ltd. was investing S$45 million in private equity fund Titan Dining LP, which has a binding agreement with the Tim Ho Wan franchiser in Asia Pacific.
JFC Founder and Chairman Tony Tan Caktiong said then the investment in Titan — which is equivalent to 45% of its total fund size — is seen to give JFC an opportunity for “very healthy financial returns” in the long term.
PROFIT DIPS IN Q3
Meanwhile, JFC reported yesterday its attributable net income in the third quarter fell 8% to P1.87 billion. Revenues increased 7% to P43.18 billion during the period, but was weakened by the 8% rise in direct costs to P36.75 billion.
The company said in a regulatory filing the bigger costs were brought by higher prices of raw materials and the expansion of its freight and store network.
Year to date, the company’s attributable net income dropped 26% to P4.53 billion. An 11% rise in direct costs to P107.61 billion weighed on revenues which grew 9% to P127.21 billion.
JFC opened 290 stores in the first nine months of the year, where 175 are in the Philippines and 115 are abroad. This brings the company’s total store count 34.7% up to 5,863 stores as of end-September.
Among the brands JFC controls are Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, PHO24, Yonghe King, Hong Zhuang Yuan, Dunkin’ Donuts, Highlands Coffee, Hard Rock Cafe, Smashburger and The Coffee Bean & Tea Leaf. — Denise A. Valdez