Lockdowns due to COVID-19 lead to Jollibee’s P10-B net loss in Q2

FILE: A Jollibee restaurant at SLEX Sell Service Area, Muntinlupa City (Photo by Patrickroque01 at English Wikipedia, CC BY-SA 4.0)

Fast-food giant Jollibee Food Corporation (JFC) has suffered a huge financial loss in the second quarter of 2020 as the result of lockdown measures implemented to curb the spread of coronavirus disease 2019 (COVID-19).

JFC reported in a disclosure to the stock exchange a net loss of P10.17 billion, compared to their P1.04 billion profit in the same period in 2019.

The company said their second-quarter loss included the seven billion-peso cost for their business transformation program. Part of this is the closure of 255 company-owned stores, change in ownership of 95 stores from company to franchises, payment of stores’ pre-termination penalties in the United States and China, supply chain facilities closure, and reduction of the organization size in other countries where they operate.

“The business results were very bad but in line with our forecasts,” Jollibee chief executive officer Ernesto Tanmantiong said.

“We are now focusing on rebuilding our business moving forward along with implementing major cost improvement under our business transformation program,” he added.

Being one of the many businesses which had no choice but to shut down its doors to comply with the implemented coronavirus-related lockdown, JFC said their system-wide sales dropped by 48.4 percent to P30.7 billion, as half of their stores worldwide were temporarily closed at the beginning of the second quarter.

By the end of the said period, JFC noted that 88 percent of their stores have opened but most of them were doing delivery and take-out. Since dine-in operations had a low level of sales volume, their revenues decreased by 46.6 percent to P23.3 billion.

Despite this, Tantamtiong said they are hoping that their sales and profit will improve in the next few months because as they try to get back on their feet, new products and marketing campaigns will be launched, cloud kitchens will be opened, and delivery systems will be improved. They will also set up new stores in selected locations particularly in North America, Vietnam, Malaysia, and China.

He added that they are planning to establish a total of 338 stores across the globe this year.

“We expect sales and profit to increase significantly in 2021 to a point closer to the levels of 2019 and to grow at least at historical growth rate of 15% annually by 2022,” Tantamtiong noted.

Jollibee currently operates more than 3,000 stores in the Philippines. Meanwhile, in Canada, Jollibee opened their first-ever location opened in Winnipeg, Manitoba last December 2016, and later on launched stores in Alberta, Ontario, and Saskatchewan.