Jollibee overturned pandemic losses with P5.94-B profit in ’21

A Jollibee branch in West Malaysia at Sunway Pyramid, Petaling Jaya today February 8, 2022. Hundreds of customers greeted the opening, with a long queue beginning as early as 7 am.

Homegrown fast-food giant Jollibee Foods Corp. (JFC) outperformed profit expectations in the fourth quarter and full year 2021, reversing the losses incurred at the peak of COVID-19 lockdowns in 2020 and returning to prepandemic level of operating income.

JFC delivered an attributable net profit of P5.94 billion last year, a turnaround from the net loss of P11.51 billion incurred in 2020 when the pandemic bludgeoned its global operations. This was 91-percent better than the P3.11-billion net income that Bloomberg market consensus was expecting JFC to deliver for 2021.

Strong performance especially came in the fourth quarter, when attributable net profit surged by 53.3 percent year-on-year to P3.24 billion. Sequentially, this doubled the P1.57-billion earnings recorded in the third quarter.

For 2021, JFC’s operating income amounted to P6.3 billion, close to the P6.5 billion it recorded in 2019.

At the bottom line level, JFC had returned to 81 percent of its prepandemic performance.

In a disclosure to the Philippine Stock Exchange on Thursday, JFC CEO Ernesto Tanmantiong reported that the fourth quarter systemwide sales of its international business had already matched sales in the same period before the outbreak of the pandemic.

“Systemwide sales in the Philippines in the fourth quarter were still 22.6-percent lower than those in the same period in 2019. However, despite this, the Philippine business’ operating income in fourth quarter 2021 had already equaled those in 2019,” he noted.

Fourth quarter systemwide sales increased by 25.2 percent year-on-year to P62.03 billion. This brought full-year sales to P211.72 billion, about a fifth higher than the level in the previous year.

Restructuring program

JFC chief financial officer Ysmael Baysa said JFC had returned to prepandemic operating income level despite its systemwide sales still being behind by 13.2 percent. He attributed this to the global business restructuring program implemented by the group in 2020, when it had to shut down unprofitable stores, alongside continuing cost and profit management in 2021.

JFC has earmarked P9 billion for capital expenditures for new stores in 2022, up by 50 percent from the outlays last year. Including the budget for renovations and a new commissary in Cebu, total capital spending could reach P17.8 billion this year from P7.8 billion in 2021.

“We are prepared to make this level of investments if the economies fully reopen and sales growth remains strong. Beyond 2022, our outlook for business growth is even brighter. We see very strong expansion in different parts of our business particularly those in North America, China, Southeast Asia and Europe while we expect the Philippines to sustain its healthy profitable growth,” Tanmantiong said.

With 17 brands operating in 34 countries, JFC has a total store network of 5,924 outlets as of end-December.