Fruitas Holdings’ subsidiary Balai ni Fruitas Inc., a leading Philippine counter service bakery operator, reported a 58 percent jump in net income to P59 million last year from P37 million in 2022 on the back of industry-leading revenue growth.

In a disclosure to the Philippine Stock Exchange, the firm said it generated revenues of P535 million in 2023, representing a 57 percent surge from 2022 revenues of P341 million.

BALAI President and CEO Lester Yu said “2023 marked significant milestones for BALAI as we passed 100 stores and the half-billion peso revenue level. We continue to maximize shareholder value by expanding intelligently and controlling our costs.

"We responded to the pandemic by acquiring Balai Pandesal and rolling out community stores and we are glad that this strategy paid off. We are now growing same store sales by earning customer loyalty and constantly improving our product offerings. 

“We believe we have also barely scratched the surface in terms of provincial expansion and we have already started to build capacity to serve this market.”

Based on latest available publicly disclosed financial results, BALAI said it outperformed all other foodservice firms listed on the PSE, in terms of both revenue growth and net income margin in 2023.

These include Jollibee Foods Corporation, Shakey’s Pizza Asia Ventures, Max’s Group, parent Fruitas Holdings, Figaro Coffee Group, and Philippine Seven Corporation. However, most were for financial statements for the first nine months of 2023.

Despite continued challenges from inflation, the company posted higher EBITDA margin and net income margin in 2023.

All of BALAI’s brands, led by Balai Pandesal, registered significant same store sales growth (SSSG) in 2023. Balai Pandesal stores increased its sales by gaining more repeat transactions among customers in the communities where they are located. 

Balai Pandesal also introduced several new baked goods in its menu and widened the curated selection of third-party goods in its stores. 

Meanwhile, Buko ni Fruitas and Fruitas House of Desserts benefited from increased foot traffic in malls and food courts. The company also continued the expansion of its retail network, adding 20 stores in the year, to end 2023 with 118. 

Other strategic initiatives also contributed to the company’s significant sales growth, including distribution of Balai Pandesal baked goods in other Fruitas stores, belonging to its associates, increased e-commerce sales through the Fruitas group’s website and third-party aggregators, and third- party modern trade distribution, particularly in Cebu.

The company posted a gross profit margin of 51 percent in 2023, only marginally lower than 2022, despite the escalation in costs of raw materials and other direct expenses. 

This was achieved through tactical but limited price increase, but more importantly, through change in product mix, towards higher-margin products.

The company generated EBITDA of P109 million in 2023, 59 percent higher than 2022 EBITDA of P68 million. Corresponding 2023 EBITDA margin of 20.3 percent, marked an improvement from 20.0 percent in 2022. 

The company continued to benefit from economies of scale as revenue growth outpaced growth in operating expenses. The company was also able to control depreciation and amortization as it opted to expand its network in a strategic manner and took advantage of e-commerce and third-party distribution. 
 

Net income margin marginally rose to 11.0 percent in 2023 compared to 10.9 percent in the preceding year.