MANILA -- Jollibee said Thursday it suffered nearly P1.8 billion in losses in the first 3 months of the year due to the COVID-19 pandemic, which are expected to widen in the second quarter as the full effect of global lockdowns is reflected.
The Philippines' largest fastfood operator swung to a net loss in the first quarter compared to net income of P1.5 billion during the same period in 2019, according to a stock exchange filing.
Jollibee set aside P7 billion to "rationalize and redesign" its business to adapt to new conditions because of the pandemic, CFO Ismael Baysa said. It postponed P9 billion in capital expenditures this year and next, he said.
The company's 2020 performance "will not be a good one," Baysa said. "It will incur even higher losses in the second quarter when the full impact of the lockdowns on the business will be felt."
"We expect the business to start recovering in the third and fourth quarters but we assume that the recovery will be slow," he said.
Community quarantines across the country shut Jollibee stores to dine-in customers from mid-March. Some later reopened for deliveries and take-out. Metro Manila and other urban areas are under a modified ECQ or enhanced community quarantine until May 31. By that time, it will be among the world's longest lockdowns.
There will be an "aggressive store and overhead rationalization" in North America, where it operates its flagship brand, Jollibee and upmarket chain Smashburger.
The company said it incurred "significant additional costs" to set up a crisis response fund for employees and workers. Losses from unit The Coffee Bean and Tea Leaf contributed to total operating loss of P1.3 billion.
Jollibee said the lockdown afforded it time to strengthen its balance sheet, with a cash balance of P26.5 billion in the first quarter, up from P20.9 billion at the end of last year. Total bank debt declined to P25.6 billion from P44.8 billion during the same comparative period.