Jollibee Foods Corporation (JFC) reported an attributable net loss of P11.96 billion in the first half of 2020—a 578 percent fall from the net income of P2.5 billion in the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said attributable net loss in the second quarter of 2020 amounted to P10.17 billion, 1077 percent lower than the profit of P1.04 billion in the same period of 2019.
The attributable net loss for the second quarter of 2020 included the cost for Business Transformation of P7.0 billion. Excluding this cost for Business Transformation, the net loss would have been P3.2 billion.
The losses also included significant costs incurred in response to the crisis such as emergency response fund for employees and workers, assistance to front liners, health workers and low income households, partly offset by economic stimulus packages received from the Singapore and China governments.
“The business results were very bad but in line with our forecasts. We are now focusing on rebuilding our business moving forward along with implementing major cost improvement under our Business
Transformation program,” said JFC Chief Executive Officer Ernesto Tanmantiong.
He added that, “We expect sales and profit to improve over the next few months. Our business building effort includes introducing exciting new products, launching new marketing campaigns, opening cloud kitchens, introducing improvement in our delivery systems and opening new stores at selected locations particularly in North America, Vietnam, Malaysia and China.”
Tanmantiong said “We plan to open a total of 338 stores worldwide in 2020. We expect sales and profit to increase significantly in 2021 to a point closer to the levels of 2019 and to grow at least at historical growth rate of 15% annually by 2022.”
System wide sales, a measure of all sales to consumers, both from company-owned and franchised stores, declined 24.5 percent to P85.83 billion in the first half of 2020 from P113.71 billion in the same period last year.
For the second quarter, system wide sales dropped 48.4 percent to P30.68 billion compared to P59.43 billion in the same quarter last year with same store sales decline of 41 percent as the business felt the full impact of government restrictions intended to contain the COVID-19 pandemic.
At the beginning of the second quarter, 50 percent of JFC Group’s stores worldwide were temporarily closed. By the end of the quarter, 88 percent of all stores were already open.
However, most of the stores that were open relied heavily on delivery and take-out businesses while practically all dine-in operations were either still closed or had low level of sales volume.
Revenues decreased by 46.6 percent to P23.3 billion for the quarter versus year ago and was down by 25.3 percent to P62.76 billion in the first half of 2020.
As JFC’s stores resumed operations all over the world, the speed of recovery in same store sales varied across different countries and territories.
In April, global same store sales declined by 47 percent with the Philippine business declining by 57
percent, China down by 37 percent, North America lower by 25 percent and Europe, Middle East and Asia (EMEAA) down by 45 percent.
In June, global same store sales improved compared to April’s to negative 39 perent with the Philippine business lower by 48 percent, China by 25 percent, North America by 9 percent and EMEAA by 22 percent.
JFC estimates that financial performance will get progressively better in the next two quarters of the year as stores will have been being reopened and sales will have been gradually building up. Total EBITDA is forecasted to be positive by the fourth quarter of 2020 with the Philippines, China, Vietnam, Europe/Middle East and Other Parts of Asia forecasted to generate net operating income by that time. This assumes that government restrictions related to the control of the pandemic will not be re-imposed.(