Jollibee Foods Corp. (JFC) on Tuesday said it is seeing early signs of recovery of its operations after the government allowed some businesses to operate in Metro Manila under the Modified Enhanced Community Quarantine (MECQ).
Ernesto Tanmantiong, the company’s CEO, said the disease has brought “unprecedented disruption” to its operations in the Philippines and other parts of the world, but it is already planning for the full restoration of operations.
“We expect growth to resume even if gradually, driven by our delivery, takeout and drive thru business channels. We believe that our consumers will continue patronizing strongly our products and services, once constraints related to the control of the Covid-19 are lifted,” said Tanmantiong.
“Our business and our people had shown great resilience in difficult times in the past, resulting eventually but always in the resurgence of our business. They are demonstrating this resilience once again in this crisis,” he added.
The company declared a cash dividend of P0.62 per share of common stock for all shareholders of record as of April 27, or just half of the cash dividend declared at about the same time last year. Payment date will be on May 22.
“We continue to declare cash dividend even though at significantly reduced amount, as part of our effort to continue serving all our stakeholders even in the middle of a crisis. We will pay this dividend from JFC’s cash reserves,” said company Chief Financial Officer Ysmael V. Baysa.
“We look forward to the recovery of our business in different parts of the world in the months ahead following the trend that we are experiencing in China and Singapore,” Baysa added.
The company said it is postponing about P9 billion worth of capital expenditures from 2020 to 2021 given the operational constraints to the construction of facilities and uncertain demand volume due to the limited mobility of consumers. Its planned capital expenditures for 2020 are being reduced by 64 percent to just P5 billion from P14 billion.
Operating costs are also significantly being reduced at all levels—at the stores, commissaries, support services and main offices in all regions in the world, it said.
The business in China has been showing indications of recovery, the company said.
At the height of the Covid-19 epidemic in China in the week of February 10, 107 of its 342 stores, or 31 percent, were closed temporarily due to the steep drop in customer visits and to ensure the safety of its employees.
However, the delivery business continued serving customers from the stores that were operating and continued to grow.
The delivery business, which accounted for 40 percent of sales of the company’s biggest brand in China, Yonghe King, accounted for 76 percent of its sales as of the week of March 30. It is growing by 20 percent compared to the same period a year ago.
In Singapore, the delivery business grew by 256 percent in the crisis period versus year ago, increasing its sales contribution to 22 percent from 7 percent, which pushed total same store sales to grow by about 4 percent.
In the Philippines, the delivery business had grown to 5 percent, from 3 percent of total system-wide sales in the early part of 2019.
In Metro Manila, and different parts of the country, the delivery business in stores that are currently open during the quarantine period is growing at an average of 50 percent of same store sales growth versus delivery sales in the early part of 2020.
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