Jollibee suffers P13.

54-B net loss in first 9

months
Published November 10, 2020, 6:30 AM
by James A. Loyola

Jollibee Foods Corporation reported an attributable net loss of

P13.54 billion in the first nine months of 2020, a 424.4 percent
drop from the attributable net income of P4.18 billion in the same
period last year due to the impact of the pandemic.
 
In a disclosure to the Philippine Stock Exchange, the firm said
system wide sales declined 26.1 percent to P126.42 billion from
P171.07 billion in the first nine months of 2019.

Revenues dropped 27 percent to P92.73 billion while costs

declined by a lower 20.4 percent and expenses by 13.9 percent.
This resulted in an operating loss of P9.95 billion in the first nine
months of 2020 from an operating income of P4.94 billion in the
same period last year.

Operating income was also weighed down by the firm’s business

transformation cost. 

System wide sales decreased by 29.2percent to P40.6 billion in the

third quarter of 2020 while revenues decreased by 30.6 percent to
P30.0 billion versus a year ago primarily as a result of lost sales
related to the COVID-19 pandemic.

Global same store sales for the third quarter versus year ago
dropped 35.3 percent. These rates of decline represented marked
improvement over those in the second quarter with -48.4 percent
in system wide sales, –46.6 percent in revenues and -41.0 percent
in same store sales growth. 
 
“Our business is recovering from the pandemic in different parts of
the world, some faster than others. This is made possible by the
resilience and hard work of our people and business partners, the
strength of our brands and in cooperation with the communities
and government agencies where we do business,” said JFC Chief
Executive Ernesto Tanmantiong.
He added that, “We are now focusing our effort in rebuilding the
business in a changed environment. While the negative impact of
the crisis is still affecting us, as we reopen stores, we are
introducing new products, resuming strong marketing campaigns,
strengthening our systems and infrastructure particularly for digital
connections with our customers and for off- premise consumption
of our products and opening of new stores mostly in our
international business.”

As at September 30, 2020, 93 percent of the group’s outlets

including those in the Philippines were already operating.
However, the speed of recovery varied in different regions in the
world.

Generally, businesses in developed countries were recovering

faster than those in emerging markets. Same store sales also
registered lower rates of decline than in the second quarter.

A total of 339 stores were permanently closed in the first nine

months of the year due to challenging business conditions: 118 in
the Philippines and 221 abroad.

However, 180 new stores were also opened, mostly in the early
part of the year following expansion plans started in 2020: 48 in
the Philippines and 132 abroad.

The attributable net loss for the third quarter of 2020 amounted to
P1.6 billion, representing a significant improvement versus the net
loss reported in the second quarter of P10.2 billion which included
a significant provision for business transformation expense of P7.0
billion.

Excluding this provision, the second quarter loss would have been
P3.2 billion. The Company generated positive EBITDA of P1.4
billion in the third quarter of 2020.
 MY REFLECTION
The rapid outbreak of the coronavirus presents an alarming
health crisis that the world is grappling with. In addition to the
human impact, there is also a significant commercial impact
being felt globally. Fast-food giant Jollibee Foods Corp. (JFC)
narrowed its net loss in the third quarter as operations in the
Philippines, China and United States better adjusted to the
coronavirus pandemic that has continued to wreak havoc on the
global economy.

For Jollibee's founder, Tan Caktiong, the son of poor

immigrants from China's Fujian province, overcoming the
pandemic looms as one of the biggest challenges of his career.
Starting out on just a dream in 1975, Tan Caktiong founded
Jollibee as an ice cream parlor in downtown Manila. In the
nearly five decades since, he has turned it into an unlikely
phenomenon that has captivated Filipino tastes -- and baffled
foreigners -- with an idiosyncratic mix of sweet-sauce
spaghetti studded with hot dog pieces and chunks of ham, and
hamburgers enhanced with sweet ketchup-mayo dressing. Still,
despite dominating the domestic quick-service restaurant
sector market, Jollibee has struggled to shield itself
against the pandemic. Some analysts also argue that while
the virus has wreaked havoc on the food
service industry generally, with falling restaurant
valuations and rising bankruptcies, the
current crisis could also present buying
opportunities.

Company is returning from a pandemic in various,parts of 
the world, some better than others. This is made possible 
by the resilience and hard work of the employees and 
corporate partners, the power of the brands and in 
 collaboration with the societies and government agencies 
where they operate.

Despite the heavy impact of the pandemic on the business,

JFC has been generating positive cash flow. The company
expects its cash flow to keep rising for the balance of the
year.
They are now focused their attention on restoring the company
in a changing world.
Although they are still impacted by the negative effects of
the crisis as they reopen stores, they are releasing new goods, 
resuming strong marketing strategies, improving their 
processes and networks, in particular for digital relations with 
their customers and for the off-premise consumption of their 
products, and opening up new stores, mainly in their 
international business.
Ma. Kyla Wayne H. Lacasandile
12-Euclid