Restaurant operator Jollibee Foods Corp. incurred a net loss of P1.79 billion in the first quarter, a reversal of the P1.46-billion profit in the same period last year as the coronavirus pandemic resulted in the temporary closure of many of its stores here and abroad.
Jollibee said in a disclosure to the stock exchange system-wide sales, a measure of all sales both from company-owned and franchised stores, rose 1.6 percent in the first three months to P55.1 billion.
The fast-food company posted an operating loss of P1.3 billion in the first quarter, compared to an operating income of P2.1 billon a year ago.
Jollibee chief finance officer Ysmael Baysa said the company would likely incur even higher losses in the second quarter when the full impact of the lockdowns on the businesses would be felt.
Baysa also expects the business to start recovering in the third and fourth quarters at a very slow pace.
“Our strong balance sheet will enable us to withstand this storm, even in the worst-case scenarios. However, we have to rationalize and re-design our business structure, to adapt to the new economic conditions and changed consumer behavior brought by the pandemic and emerge as a stronger business and organization in 2021,” Baysa said.
Jollibee announced plans to spend P7 billion to overhaul its global business structure to adapt to new economic conditions and changing consumer behavior.
The changes include rationalization of existing stores, store network, supply chain facilities and management support group structure. It will also include building drivers of revenue growth including food-to-home and offices, take-out and drive-thru. Jenniffer B. Austria
“The changes will be global in scope including Smashburger and Coffee Bean and Tea Leaf where we will pursue aggressive store and overhead rationalization in North America. We will continue to invest in new stores in very selective locations particularly in North America and parts of Asia where JFC’s return on invested capital on new stores are now the highest,” Baysa said.
The group allocated P5.2 billion in capital expenditures this year, 63 percent lower compared to the previously-announced spending of P14.2 billion.
It also plans to open 171 new company-owned stores and renovate 96 existing stores in 2020.
The company said that while the pandemic had adversely affected the company’s profit and revenues, its balance sheet remained strong. As of end-March, Jollibee’s net cash position stood at P26.5 billion, up from P20.9 billion as of end-2019.
Total bank debts reached P25.6 billion as of end-March, down from P44.8 billion at the end of 2019.