Fast food company Jollibee Foods Corporation has announced a rise in sales to 6.5bn pesos (US$125m) in January-March 2005, compared with 5.8bn in the same period in 2004, but rising power, fuel and transport costs hit its profits.

Net income was 358m pesos, compared with 382m in January-March 2004.

Tony Tan Caktiong, chairman and CEO, said he was concerned about the short term effect of high inflation rate on JFC's sales volume and profit but predicted stronger business performance in the long term. "We continue to be encouraged by the performance of our Yonghe King business in China," he said. "We're also pleased with the strong start of our new Chowking store in Indonesia and the recovery of Jollibee business in Vietnam where sales grew by 46.1% in the first quarter.

"These developments continue to give us indications that we will be able to build a
meaningful business abroad over the next years," he said. "In the Philippines, we still
see many opportunities for geographical and food segment penetration in the years ahead."

In the Philippines where the Jollibee Group operates a total of 1,072 stores, its brands grew at about half the growth rate in the first quarter of 2004. "We attribute the lower sales growth rate to inflation pressures on consumer spending and on likely lower growth rates in agricultural output and in the GDP," he said. "The lower sales growth rate was consistent across regions."