Jollibee Foods Corporation (JFC) reported that its income has increased by 1.5% to P6.43 billion after its 2019 performance has been audited. The new report reversed the 14.4% decrease that was reported in February. According to the fast-food chain, the changes in the earnings are now reflected, which can be attributed to the implemented Philippine Financial Reporting Standard (PFRS) 16 accounting standard. The increase came from the finalization of adjustments that are related to the implementation of PFRS 16, which was done during the audit process for the year-end.
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PFRS 16 is mandatory for all companies in the Philippines starting January 2019. Basically, this standard requires the recognition of lease activities in the companies’ balance sheets. When the lease was classified under the interest expense of JFC’s audited net operating income, it was adjusted to increase by 10.7% to P6.5 billion. The total adjustment was P626.8 million. This allowed the interest expenses to grow by P518.9 million. JFC reported that this was offset partially by the P402.8 billion rise in other income. All other figures including the sales and revenues of JFC are intact. The revenues in 2019 jumped by 11.5% to P179.63 billion while its sales rose by 14.9% to P243.79 billion
Many big companies are indeed affected by the COVID-19 crisis, including Jollibee Food Corporation (JFC). And to be able to control the impact of the pandemic, JFC decided to cut its capital expenditure (CAPEX) allocation in 2020. The new amount is set at P5 billion. Per the disclosure, the previous allocation was at P14 billion. It has reduced its CAPEX by 64%. All other operating costs are minimized across its stores, support services, commissaries, and main offices across the globe.
The disruption in the operations of the business because of the COVID-19 pandemic drove JFC to postpone P9 billion of its capital expenditures from 2020 to 2021. The operational constraints were considered, especially to uncertain demand volume brought by limited mobility consumers and construction of facilities. This year, JFC is only going to spend some of its budgets. The rest of the amount is moved to 2021, which is somehow a move to recover from the damages early this year. Operations are limited locally and internationally. There’s no timeline yet as to when the company will resume its operation in all of its branches.