Jollibee loses P1.8 billion in Q1 as stores closed

MANILA, Philippines — Jollibee Foods Corp. expects to incur even higher losses for the rest of the year given the 222.6 percent decline in its first quarter net income.

The company reported a net loss of P1.8 billion from a P1.5 billion profit a year ago due to the impact of the coronavirus disease 2019 or COVID-19 pandemic.

The Luzon-wide enhanced community quarantine, which led to temporary closure of stores in the Philippines and markets abroad, affected the business, decreasing revenue by 2.3 percent to P39.4 billion. Systemwide sales were flat at P55 billion.

To survive, the company would have to rationalize and redesign its business structure, adapt to the new economic conditions and adjust to the changes in consumer behavior, officials said.

JFC chief financial officer Ysmael Baysa said recovery may start in the third and fourth quarters.

"JFC's financial performance in 2020 will not be a good one. It will incur even higher losses in the second quarter when the full impact of the lockdowns on the business will be felt. We expect the business to start recovering in the third and fourth quarters, but we assume that recovery will be slow. Our strong balance sheet will enable us to withstand the storm even in worse case scenarios," Baysa said.

Moving forward, the company said it would still open 171 new company-owned stores and renovate 96 existing stores. It will also close a still undisclosed number of existing branches.

As a result, it has reduced its planned capital expenditures for the year to P5.3 billion from P14.2 billion originally.

Its operating loss for the quarter amounted to P1.3 billion compared to an operating income of P2.1 billion last year caused by the temporary closures of a high number of restaurants and significantly reduced volume.

At present, JFC operates the largest food service network in the country. As of April 30, it was operating 3,317 restaurant outlets in the country.