Jollibee Foods Corporation (JFC), one of the largest food service companies in the world, is reducing its 2024 capital expenditure budget by 20 percent and has withdrawn its application to offer and list up to eight million preferred shares worth P8 billion.

In a disclosure to the Philippine Stock Exchange, the applications to offer and list the preffered shares were filed with the Securities and Exchange Commission and the PSE in June 2024.

“Following careful consideration of all relevant factors and in the interest of achieving the best value for our shareholders, we have made the decision to withdraw our previously announced public offering of Series C Preferred Shares,” said JFC Chief Financial Officer Richard Shin said.

He added that, “We will explore other capital raising opportunities, focused on shareholder value and optimization of our capital structure.”

The proceeds from the Series C Preferred Shares were earmarked for refinancing of JFC’s Series A Preferred Shares.

However, Shin said JFC believes that the additional funding that would have come from the public offer of the Series C Preferred Shares would no longer be needed for the refinancing of the Series A Preferred Shares due primarily to the strong profit performance and cash flow generation of its Philippine business.

Other factors considered by JFC in its decision to withdraw its public offering of the Series C Preferred Shares include its plan to reduce its P23 billion capital expenditure budget for 2024 by at least 20 percent.

It also took into consideration the rate cuts expected to occur later in the year would allow JFC to obtain more beneficial bank loans at floating interest rates and the profit-accretive contribution from the consolidation of Compose Coffee.

JFC expects these factors and considerations will improve its flexibility in its funding and in increasing its leverage position. As a result of the withdrawal, no Series C Preferred Shares will be offered or sold by JFC.

Jollibee has announced last March that it was allotting P20 billion to P23 billion for capital expenditures this year as it projects to sustain its growth to record-breaking levels in 2024.

The firm said capex will be allotted mainly to fund the planned opening of 700 to 750 company-owned and franchised stores this year.

Based on its target for 2024, JFC projects full year system-wide sales growth to be in the range of 10 percent to 14 percent, with same store sales growth of 5 percent to 7 percent, and store network increase of 7 percent to 8 percent. Operating profit growth will be in the range of 10 percent to 15 percent.