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Philippines: Opportunities in pandemic, says CEO
MANILA: Jollibee Foods Corp, the largest Philippine restaurant operator, is looking toward foreign expansion and “opportunities” created by Covid-19 as it rebounds after historic losses induced by the pandemic.
After a restructure amid last year’s setback, Jollibee CEO Ernesto Tanmantiong plans to open 450 restaurants around the world this year while looking for acquisitions that could be funded with the company’s 57.5 billion pesos (US$1.2bil or RM5bil) in cash and short-term investments.
Tanmantiong still hopes to achieve a long-term goal of turning the Manila-based company into one of the world’s top five restaurant operators.
Jollibee posted a 11.5 billion peso net loss last year – its first annual loss in at least three decades – as dining out was hammered by the virus.
“There are opportunities coming out of the pandemic, ” Tanmantiong said in a Bloomberg interview.
“We are constantly assessing these opportunities.”
Jollibee, like restaurant chains around the world, faces a landscape altered by Covid-19.
The Philippines sank into recession in 2020, and the strength of its expected recovery may be weaker than initially thought amid an escalation in cases and delayed national vaccination campaign.
It has the second-highest number of infections in South-East Asia, and mobility curbs imposed over the last year have hurt businesses – with restaurants and tourism-related ventures among the hardest hit.
“Jollibee is betting long-term that traffic will improve. It’s really a play on that, ” Gerard Abad, who helps manage 25 billion pesos as chief investment officer at AB Capital & Investment Corp, said.
“Companies that succeed are those that make a bet when the environment is tough, but this looks like it will still be prolonged, ” said Abad, who’s underweight on Jollibee.
In a bid to counter the impact of the virus, Jollibee – known for dishes like crispy fried chicken and sweet spaghetti – has spent seven billion pesos on what it calls a business transformation, including upgrades to its delivery and online sales platform.
Now that it’s on stable financial footing, Tanmantiong said the company can make acquisitions as big as The Coffee Bean & Tea Leaf, its largest purchase ever at US$350mil in 2019.
There are brands it is interested in, “except that at this time we cannot reveal them yet because we’re doing proper due diligence and assessment, ” he said.
Jollibee is pushing for more expansion abroad than at home for a second year. — Bloomberg