Jollibee Foods Corp. widened losses in the second half, reflecting the full impact of strict quarantines to contain the COVID-19 pandemic. The country's largest fast food operator said it was undergoing a business transformation to return to profitability.
The company posted a net loss of P10.2 billion in the quarter ended June, bringing net losses in the first half to P11.96 billion. It posted a net income of P2.5 billion in the first half of 2019, according to a stock exchange filing. The loss is due in part to the P7 billion it spent to adapt to the new normal.
According to the company, the losses included costs incurred in response to the crisis, including emergency response fund for its employees and workers, assistance to frontliners, health workers and low income households. Losses were partly offset by economic stimulus packages received from the Singapore and China governments, it added.
The government imposed a Luzon-wide lockdown starting in mid-March that lasted until early June. During this time, most businesses were shut down while people were instructed to stay at home to control the spread of COVID-19.
Jollibee said 50 percent of its store network worldwide were temporarily closed at the beginning of the second quarter. About 88 percent were opened by the end of June, most of which relied heavily on take-out and delivery.
System-wide sales, or all sales to consumers both from company-owned and franchised stores, decreased by 48.4 percent to P30.7 billion during the second quarter compared to the same period last year.
Revenues also decreased 46.6 percent from P43.68 billion in the second quarter of 2019 to P23.3 billion in the same period this year.
"The business results were very bad but in line with our forecasts," said Jollibee CEO Ernesto Tanmantiong. "We are now focusing on rebuilding our business moving forward along with implementing major cost improvement under our Business Transformation program. We expect sales and profit to improve over the next few months."
The company expressed optimism that its financial performance would improve in the next two quarters as its stores reopen on the way to a positive EBITDA (earnings before interest, taxes, depreciation, and amortization) by the fourth quarter of 2020.
Jollibee operates a total of 5,874 stores under different brands worldwide as of June 30, 2020. It has 3,286 in the country (Jollibee brand 1,201, Chowking 607, Greenwich 271, Red Ribbon 493, Mang Inasal 606, Burger King 106, PHO24 1 and Panda Express 1), and 2,588 abroad across several different brands, including recent acquisistions Smashburger and Coffee Bean and Tea Leaf.
Tanmantiong said the company plans to open 338 stores in 2020 particularly in North America, Vietnam, Malaysia and China.