Jollibee cuts capex as COVID-19 disrupts operations
The company said it is seeing early signs of recovery in China.
Jollibee Foods Corporation has reduced its planned capital expenditures for the year as the COVID-19 pandemic disrupts operations across the globe.
In an update to the local stock exchange, the Philippines’ largest fast food operator cut its 2020 capex by 64% to P5 billion from P14 billion, citing "operational constraints" and "limited mobility" caused by the pandemic.
Deliveries accounted for 5% total sales in the early part of 2020, up from 3% compared to the same period in 2019.
Select stores in Luzon island were closed from mid-March due to the implemented “enhanced community quarantine”, which was extended until April 30. Stores that remained open were operating via drive-thru, takeout, delivery and selling ready-to-cook meals.
CEO Ernesto Tanmantiong said the conglomerate is eyeing “full restoration” after the lockdown is lifted, with its delivery business driving recovery.
“While the COVID-19 pandemic has brought unprecedented disruption to our operations in the Philippines and other parts of the world, we are already planning for the full restoration of our operations. We expect growth to resume even if gradually, driven by our Delivery, Take-Out and Drive Thru business channels,” Tanmantiong said.
The company also said their business in China has been showing indications of recovery.
Its delivery business, which accounted for 40% of total sales of the company’s biggest brand in China, Yonghe King, accounted for 76% of its sales as of the week of March 30.
