System-wide store closures due to the coronavirus pandemic led to a P12-billion net loss in the 1st half of 2020 for Jollibee Foods Corporation.

Half of Jollibee stores worldwide were temporarily closed during the 2nd quarter, resulting in a 48.4% decrease in sales to P30.7 billion, its financial statement showed on Wednesday, August 5.

By the end of the quarter, 88% of stores had reopened in a limited capacity and catered mostly to delivery and takeouts. With no dine-in customers, revenues fell by 46.6% to P23.3 billion in the 2nd quarter.

On a year-to-date basis, revenues fell 25.3% to P62.8 billion, while sales fell 24.5% to P85.8 billion.

The losses also included significant costs incurred from giving emergency aid for employees and assistance to frontliners.

“The business results were very bad but in line with our forecasts. We are now focusing on rebuilding our business moving forward along with implementing major cost improvement under our business transformation program,” Jollibee chief executive officer Ernesto Tanmantiong said.

The P10.2-billion net loss in the 2nd quarter alone included the cost of P7 billion for the business transformation program.

“The spending for business transformation includes closure of 255 company-owned stores, change in ownership of 95 stores from company to franchisees, payment of pre-termination penalties of stores in the US and China, closure of supply chain facilities, and reduction in the size of the organization in various countries where we do business,” said Jollibee chief financial officer Ysmael Baysa.

Amid the uncertain business environment, Jollibee is still keen on introducing new products and is set to launch cloud kitchens and new delivery systems.

The company is optimistic it will swing back to profitability in 2021, and projects a growth rate of 15% in 2022. Projections assume that lockdown restrictions will not be reimposed.

Jollibee is set to open 338 stores worldwide in 2020. It is also set to spend to turn Smashburger and The Coffee Bean and Tea Leaf profitable by 2021.

As of end-June, Jollibee operates 3,286 stores in the Philippines, including brands like Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, and Panda Express. Abroad, it operates 2,588 stores.

Bargain hunters caused shares of Jollibee to jump by 3.8% on Wednesday, despite the massive losses. – Rappler.com