COVID-19 drags Jollibee Foods to a P2.074-B net loss in Q1

Fast-food giant Jollibee Foods Corp. (JFC) suffered a net loss in the first quarter of 2020, dragged by stores' closure amid the COVID-19 crisis.

In a filing to the Philippine Stock Exchange on Thursday, JFC said its net loss stood at P2.074 billion, a 253.1% plunge from a net income of P1.355 billion in the same period last year.

This, as revenues declined 2.3% to P39.433 billion from P40.348 billion year-on-year “due to the impact oof the COVID-19 pandemic which led to temporary closure of a high number of stores in the Philippines and markets abroad.”

System wide sales, a measure of all sales to consumers from company-owned and franchised stores grew at a measly 1.6% to P55.151 billion from P54.270 billion.

In January before the COVID-19 crisis, JFC’s global system wide sales grew 24.9%, including the consolidation of the Coffee Bean & Tea Leaf which took effect in September 2019.

In February, however, system wide sales slowed to 15.7% and in March slid to -32.5% when lockdown and other restrictions were imposed in the Philippines, China, US, and other countries.

As of March, JFC said 69% of its stores in the Philippines are temporarily closed; while 6% are closed in China; 16% in North America, and 23% in Europe, the Middle East and Africa.

“JFC’s financial performance in 2020 will not be good. It will incur even higher losses in the second quarter when the full impact of the lockdowns on the business will be felt,” JFC chief financial officer Ysmael Baysa said.

“We expect the business to start recovering in the third and fourth quarters but we assume that the recovery will be slow,” Baysa said.

To rationalize and re-design its business to adapt to new economic conditions, JFC announced it will spend P7 billion to implement changes to its global business structure.

The changes will involve the rationalization of its existing stores, store network, supply chain facilities and management support group structure.

The planned changes will also include the implementation of safety and social distancing protocols in the dining area, investment in digital commerce and technology, the installation of mobile applications to facilitate food ordering and payment, the establishment of “cloud kitchen” or unmarked delivery outlets with no dine-in facility located in discreet, low rent sites. — RSJ, GMA News