Homegrown fast-food company Jollibee Foods Corp. suffered a P10.2-billion net loss in the second quarter, a big turnaround from the P1.04-billion net income it reported in the same period last year, as the business felt the full impact of coronavirus pandemic and government restrictions intended to contain the virus.
Jollibee said in a disclosure to the stock exchange the P10.2-billion net loss included the P7-billion cost for business transformation which involved closure of 225 company-owned stores, change in ownership of 95 stores from company to franchisees, payment of pre-termination penalties of outlets in the US and China, closure of supply chain facilities and reduction in the size of the organization at various countries.
It said excluding these costs, the second-quarter net loss would have been P3.2 billion.
“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. We expect sales and profit to improve over the next few months,” Jollibee chief executive Ernesto Tantamtiong said.
“Our business building effort includes introducing exciting new products, launching new marketing campaigns, opening cloud kitchens, introducing improvement in our delivery systems and opening new stores at selected locations particularly in North America, Vietnam, Malaysia and China,” he said.
System-wide sales, a measure of all sales to consumers, both from company-owned and franchised stores decreased by 48.4 percent to P30.7 billion in the second quarter from a year ago because of store closures.
Meanwhile, conglomerates SM Investments Corp. and Metro Pacific Investments Corp. delivered lower incomes in the first half as the pandemic took an unprecedented toll on their core businesses. SMIC said in a disclosure to the stock exchange net income fell 69 percent in the first half to P7.1 billion from P23 billion in the same period last year.
Consolidated revenues decreased 21 percent to P185.5 billion in the six-month period from P233.7 billion a year ago. The property and banking businesses accounted for 61 percent and 34 percent of net income while retail contributed 5 percent.
“Our half-year financial results are within our overall expectations, given the context of the lockdown due to the COVID-19 outbreak which had a greater impact in the second quarter. The results also reflect the group’s continued financial prudence and conservative balance sheet after our banks made substantial provisions for potential customer delinquencies,” SMIC president and chief executive Frederic DyBuncio said.
Metro Pacific also reported a 63-percent drop in first-half net income to P3 billion from P8.1 billion a year earlier. Contribution from core businesses declined by 31 percent as the quarantine resulted in lower toll road traffic, suspension of rail services and decrease in commercial and industrial demand for water and power.
Power accounted for P5.2 billion or 68 percent of net operating income followed by water which contributed P1.8 billion and toll roads, P900 million. Other business, being mainly hospitals, rail and logistics, incurred a loss of P236 million.
MPIC chairman Manuel Panglinan said second-half financial results were expected to be better even with the recent re-imposition of modified enhanced community quarantine in Metro Manila.
He said the group started seeing signs of recovery in May, June and July across businesses with the easing of quarantine restrictions.