CONGLOMERATE JG Summit Holdings, Inc. saw a 39% drop in third-quarter net income to P3.1 billion, but its president remains optimistic about ending the year on a “good footing.”
“We expect a better fourth quarter to finish the year on a good footing. This will also establish a stronger base as we pursue initiatives to sequentially drive better top line growth and margins across our operating units,” JG Summit President and Chief Executive Officer (CEO) Lance Y. Gokongwei said in a statement to the stock exchange on Wednesday.
JG Summit’s third-quarter consolidated revenue increased by 1.4% to P89.1 billion from P87.9 billion last year.
“This was caused by larger losses from JG Summit Olefins Corp. (JGSOC) with the prolonged trough in the global petrochemical industry cycle, lower sugar profits from Universal Robina Corp. (URC) due to price corrections and high-priced inventories, and reduced average fares from Cebu Air, Inc. (CEB) to stimulate demand during the typical lean period in Philippine aviation,” the conglomerate said.
Mr. Gokongwei said that most of the conglomerate’s businesses were affected by weaker consumer sentiment that has “dampened demand for products and services.”
“We are seeing the propensity of consumers towards value food and beverage products, the seasonally weaker quarter for travel, and the prolonged industry downcycle for petrochemicals impacting our latest results,” he said.
For the first nine months, JG Summit recorded a 16% increase in net income to P17.9 billion, while core profit rose by 39% to P20.3 billion.
The conglomerate’s top line surged by 10% to P277 billion from P251.3 billion last year on healthy demand for travel and leisure activities, a higher preference for value food and beverage products, and increased utilization rates in the group’s petrochemical plants.
The food segment led by URC recorded an 18% decline in attributable net income to P8 billion due to the discontinuation of its China business and lower foreign exchange gains versus last year.
URC’s top line rose by 1% to P118.9 billion, led by its international operations and the double-digit growth in its ready-to-drink beverage business.
For the real estate and hotels business, Robinsons Land Corp. (RLC) had slower growth in core and net income to P9.3 billion due to the higher share of minority owners in the earnings of subsidiary RL Commercial REIT, Inc.
RLC’s top line expanded by 4% to P29.3 billion, while earnings before interest, taxes, depreciation, and amortization rose by 7% to P17.8 billion.
For the airline business, CEB saw a 33% decline in net profit to P3.4 billion due to higher depreciation and financing costs related to its growing fleet.
Core profit also fell by 32% to P3.2 billion.
Revenue surged by 11% to P74.5 billion amid the 13% increase in passengers flown as of end-September.
The petrochemicals business led by JGSOC widened its net loss to P11.4 billion amid “unfavorable global market conditions.”
Revenues surged 53% from a low base in 2023, carried by “higher plant run rates along with the full adoption of the pricing tool from its business-wide transformation program.”
Meanwhile, JG Summit’s equity share in Manila Electric Co.’s nine-month net income rose by 19% to P8.7 billion on record high sales volumes plus higher contributions from its power generation and retail electricity supply businesses.
For Singapore Land Group (SLG), JG Summit’s nine-month results account for the first-half performance only, given SLG’s semiannual regulatory reporting frequency. Equity earnings from SLG rose by 15% to P1.3 billion on a stronger hotel business and higher rental income.
Dividends received by JG Summit from PLDT Inc. slipped by 11% to P2.3 billion due to the absence of the special dividends declared in 2023.
JG Summit received P373 million in cash dividends from the Bank of the Philippine Islands (BPI) given the effectivity of the BPI and Robinsons Bank merger earlier in the year.
On Wednesday, JG Summit shares fell by 3.23% or 75 centavos to P22.45 apiece. — Revin Mikhael D. Ochave
