Jollibee posts turnaround, sets P17.8-B capex

Jollibee Foods Corporation (JFC), one of Asia’s largest food service companies, is allotting P17.8 billion for capital expenditures this year as it reported a turnaround in 2021 with an attributable net income of P5.9 billion from a net loss of P11.5 billion in 2020.

In a disclosure to the Philippine Stock Exchange, the firm said this year’s capex is significantly higher than the P7.8 billion spending in 2021. P10.0 billion was set for new stores and renovations of existing stores.

JFC had planned for opening 500 new stores in 2022, after opening 398 in 2021. The balance of P7.8 billion capital expenditures will be mostly for supply chain and business technology investments.

JFC plans to build a new commissary facility in Cebu in order to support its expansion plans in Visayas and Mindanao.

These capital expenditures will be primarily funded by cash generated from operations, bank loans and excess cash from the remaining proceeds from the bond issuances.

JFC Chief Executive Officer Ernesto Tanmantiong said “JFC had allotted P9.0 billion for capital expenditures for new stores in 2022, representing a 50 percent increase compared with P6.0 billion spent in 2021.”

“We are prepared to make this level of investments if the economies fully re-open and sales growth remains strong. Beyond 2022, our outlook for business growth is even brighter,” he noted.

Tanmantion said “We see very strong expansion in different parts of our business particularly those in North America, China, Southeast Asia and Europe while we expect the Philippines to sustain its healthy profitable growth.”

The firm said last year’s profit is still lower than its pre-pandemic earnings of P7.3 billion in 2019 although its fourth quarter performance already exceeded figures for 2019.

JFC generated an attributable net income of P3.2 billion in the fourth quarter of 2021, higher by 59.6 percent and 3.7 percent compared to its net income for the fourth quarter of 2020 and 2019, respectively.

The operating income generated in the last quarter of 2021 of P2.5 billion was higher by 63.3 percent than the P1.5 billion in the same period of 2019 and a significant turn-around from a loss of P2.9 billion in 2020.

For the year 2021, JFC’s operating income amounted to P6.3 billion, about the same level in 2019 or pre-pandemic operating income of P6.5 billion.

System wide sales, a measure of all sales to consumers, both from company-owned and franchised stores, increased by 25.2 percent to P62.03 billion for the fourth quarter and 20.3 percent to P211.719 billion for the year 2021 compared to the same periods of 2020.

Revenues grew by 22.8 percent to P44.94 billion and 18.7 percent to P153.51 billion for the fourth quarter and for the year 2021, respectively.

“JFC’s system wide sales in its international business in the fourth quarter had equaled the sales in the same period before the outbreak of the pandemic,” said Tanmantiong.

Same store sales of the Philippine business increased by 24.1 percent in the fourth quarter of 2021 compared to the same quarter last year while the international business grew by 9.6 percent.

North America increased by 17.0 percent, Europe, Middle East and other parts of Asia (EMEAA) by 5.0 percent, and The Coffee Bean & Tea Leaf® (CBTL) by 29.3 percent.

SuperFoods and the China businesses declined by 23.2 percent and 8.1 percent, respectively primarily due to COVID- 19 related restrictions imposed on some parts of Vietnam and China.

Global same store sales rose by 18.4 percent versus the fourth quarter of 2020.

“System wide sales in the Philippines in the fourth quarter were still 22.6 percent lower than those in the same period in 2019. However, despite this, the Philippine business’ operating income in the fourt quarter of 2021 had already equaled those in 2019’s,” Tanmantiong said.

He added that, “We look forward to continuing strong recovery of the business in 2022 particularly if the restrictions in the Philippines are fully lifted, coupled with increased consumer spending during this election year.”

“JFC achieved a profit objective of generating an operating income in 2021 that reached pre-pandemic level despite its system wide sales still being behind by 13.2 percent,” said JFC Chief Financial Officer Ysmael V. Baysa.

He noted that, “This was the result of our Business Transformation Program implemented in 2020 and the continuing strong cost and profit management in 2021.”