Jollibee earmarks P17.8B for 2022 capital spending

By Keren Concepcion G. Valmonte, Reporter

JOLLIBEE Foods Corp. (JFC) has set its budget for capital expenditures (capex) this year to P17.8 billion, 128% higher than the P7.8 billion the company spent in 2021 as it looks to launch 500 stores.

In a statement on Thursday, JFC said “these capital expenditures will be primarily funded by cash generated from operations, bank loans and excess cash from the remaining proceeds from the bond issuances.”

The company is allotting the majority or P10 billion of its planned capex for new stores and renovating its existing outlets.

“We look forward to continuing strong recovery of the business in 2022 particularly if the restrictions in the Philippines are fully lifted, coupled with increased consumer spending during this election year,” JFC President and Chief Executive Officer Ernesto Tanmantiong said.

“JFC had allotted P9 billion for capital expenditures for new stores in 2022, representing a 50% increase compared with P6 billion spent in 2021,” he added.

The company plans to open 500 new stores this year, noting “very strong expansion in different parts of [its] business] in North America, China, Southeast Asia, and Europe.

Meanwhile, Mr. Tanmantiong said the company expects its business in the Philippines to “sustain its healthy profitable growth.”

JFC launched a total of 398 new stores in 2021, of which 108 are in China, 85 in the Philippines, 38 in North America, and 29 in Europe, Middle East, Asia and Australia, or collectively EMEAA. The SuperFoods Group also opened 72 stores last year, while The Coffee Bean and Tea Leaf (CBTL) launched 66 stores.

The company permanently shuttered 302 stores — 216 abroad and 86 at home — in the fourth quarter last year.

Meanwhile, P7.8 billion of its capex will be allocated for investments in the company’s supply chain and business technology. JFC is looking at building a new commissary facility based in Cebu.

“Beyond 2022, our outlook for business growth is even brighter,” Mr. Tanmantiong said.

IMPROVED SALES PUSH Q4 PROFIT GROWTH TO 60%
In a separate regulatory filing on Thursday, the company reported a 59.6% growth in attributable net income to P3.24 billion in the fourth quarter last year from P2.03 billion in the same period in 2020.

The company generated revenues of P44.94 billion during the quarter, improving by 22.8% from P36.58 billion year on year. System-wide sales went up 25.2% to P62.03 billion from P49.55 billion.

“JFC’s system-wide sales in its international business in the fourth quarter had equaled the sales in the same period before the outbreak of the pandemic,” Mr. Tanmantiong said, adding that Philippine system-wide sales “were still 22.6% lower than those in the same period in 2019.”

Meanwhile, same-store sales of the company’s Philippine business went up 24.1% year on year, while same-store sales of its international business went up 9.6%. Its global same-store sales, on the other hand, went up 18.4%.

Same-store sales in North America grew 17%, sales from stores across EMEAA went up 5%, and same-store sales of CBTL went up 29.3%.

However, same-store sales of SuperFoods went down 23.2% and the company’s China businesses also saw an 8.1% decline due to coronavirus disease 2019 (COVID-19) lockdowns implemented in some areas of Vietnam and China.

Meanwhile, Jollibee generated an operating income of P2.51 billion in the fourth quarter, “a significant turnaround” from the P2.87-billion operating loss reported in the same period in 2020.

JFC SWINGS TO PROFITABILITY IN 2021
JFC logged a P5.94-billion net income attributable in 2021, swinging from a P11.51-billion loss in 2020. However, last year bottom line is still 18.6% lower than the company’s 2019 income of P7.3 billion.

Revenues grew 18.7% to P153.51 billion from P129.31 billion year on year, while system-wide sales grew 20.3% to P211.72 billion from P175.97 billion.

The company said the business transformation program it implemented helped push its full-year operating income to P6.32 billion in 2021 from a P12.81-billion operating loss.

“JFC achieved a profit objective of generating an operating income in 2021 that reached pre-pandemic level despite its system-wide sales still being behind by 13.2%,” JFC Chief Financial Officer Ysmael V. Baysa said.

“By business units, the key drivers were the Philippines, with fourth-quarter operating income equaling that of fourth-quarter 2019, Smashburger, with losses in fourth-quarter 2019 being reduced by 80%, and CBTL which turned its losses into profit in [the] fourth quarter and total year 2021. CBTL is now a profitable business,” he added.

JFC is operating 17 brands in 34 countries. As of end-2021, the company has 3,220 stores in the Philippines and 2,704 abroad.

Jollibee stores account for 1,520 outlets, CBTL has 1,048, Chowking has 604, Mang Inasal has 578 stores, the company has 553 Red Ribbon outlets, 483 Highlands Coffee shops, 394 Yonghe King stores, 269 Greenwich stores, and 245 Smashburger stores.

Just this Tuesday, the company launched its Jollibee branch in West Malaysia with hundreds of customers falling in line on its first day. The company said all of the ingredients used for the store’s meals are sourced from Halal-certified vendors.

JFC shares at the stock exchange climbed 0.99% or P2.40 on Thursday, closing at P244 each.