JFC shows strong recovery thanks to strong overseas sales
Local fast food giant Jollibee Foods Corp. (JFC) said it experienced a strong recovery last year on the back of rising overseas sales.
The company said its operating profit for the fourth quarter of 2021 reached 2.5 billion pesos, reversing its operating loss of 2.86 billion pesos in the fourth quarter of 2020. Compared to 2019, it increased by 63% compared to 1.5 billion pesos.
For the full year 2021, the company’s operating profit was 6.3 billion pesos, a reversal of the loss of 12.81 billion pesos from the previous year. The figure is almost on par with its pre-pandemic operating profit of 6.5 billion pesos.
Attributable net profit for the year reached 5.94 billion pesos, also a reversal of the 11.51 billion pesos loss of the previous year, but still lower than the 7.3 billion pesos recorded in 2019.
“JFC achieved a profit target of generating operating profit in 2021 that reached pre-pandemic levels despite its system-wide sales still lagging 13.2%. This is the result of our business transformation program implemented in 2020 and continued strong cost and profit management in 2021,” said Ysmael V. Baysa, the company’s Chief Financial Officer.
“By business units, the main drivers were the Philippines, with fourth quarter operating profit equal to the fourth quarter of 2019, Smashburger, with losses in the fourth quarter of 2019 reduced by 80% and CBTL [The Coffee Bean & Tea Leaf] which turned its losses into profit in the fourth quarter and for the whole of 2021. CBTL is now a profitable business.
System-wide sales, a measure of all consumer sales from both company-owned and franchise stores, rose 25% for the fourth quarter and 20% overall of the year 2021 compared to the same periods last year.
Revenue rose 18% for the year to 153.5 billion pesos from 129.31 billion pesos the previous year.
Same-store sales in the Philippine business increased 24% in the fourth quarter of 2021 compared to the same quarter last year, while the international business increased 9%.
North America was up 17%, Europe, Middle East and other parts of Asia was up 5% and CBTL was up 29%. SuperFoods and China business declined 23% and 8%, respectively, mainly due to Covid-19 related restrictions imposed on parts of Vietnam and China. Global comparable store sales increased 18% compared to the fourth quarter of 2020.
“JFC’s system-wide sales in its international business in the fourth quarter had matched sales in the same period before the outbreak of the pandemic,” said Ernesto Tanmantiong, CEO of the company.
“Philippines system-wide sales in the fourth quarter were still 22% lower than the same period in 2019. However, despite this, the operating profit of the Philippine business in the fourth quarter of 2021 had already equaled that of 2019.”
He said Jollibee allocated 9 billion pesos in capital expenditure for new stores in 2022, which is a 50% increase from the 6 billion pesos spent in 2021.
In total, the company is spending some 17.8 billion pesos on capital expenditure this year, more than the 7.8 billion pesos it spent last year.
Some 10 billion pesos are allocated to new stores and renovation of existing stores. The company said it would open 500 new stores in 2022, more than the 398 it launched last year.
The balance of 7.8 billion pesos will be mainly for investment in supply chain and business technologies.
The company said it plans to build a new police station in Cebu to support its expansion plans in Visayas and Mindanao. These capital expenditures will primarily be funded by cash generated from operations, bank borrowings and excess cash from remaining proceeds from bond issues, he said.
“We are ready to make this level of investment if economies fully reopen and sales growth remains strong. Beyond 2022, our prospects for business growth are even more promising. We are seeing very strong expansion in different parts of our business, particularly in North America, China, Southeast Asia and Europe, while we expect the Philippines to maintain healthy and profitable growth,” Tanmantiong said.