JG Summit suffers P468-million loss

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JG Summit Holdings Inc., the holding firm of the Gokongwei Group, on Wednesday said it incurred a loss of P468 million for the entire 2020, a reversal of the P31.28-billion income in the previous year.

The holding firm’s operations were dragged by its budget airline which was affected by global flight restrictions following a series of lockdowns in many countries due to the Covid-19 pandemic.

Consolidated revenues for the year fell P221.6 billion, 27 percent lower from the previous P301.82 billion in 2019.

The company, however, reported a core income of P450 million, still down by 98 percent from the previous year.

“With our long term view, we will continue to invest in the necessary assets and capabilities needed to sustain the business in the years to come. This will allow us to take advantage of emerging opportunities as the economy pivots back to growth,” JG Summit President and CEO Lance Gokongwei said.

“As we cautiously embark on this challenging path to recovery, our utmost priority is the health and welfare of our employees. Aligned with our purpose, we will also continue to provide better choices and the best value for our customers while ensuring business continuity and the exercise of prudence in liquidity and cost management. We will also support the government and the communities where we operate in as the vaccination program is rolled out. This is a necessary must to jumpstart the economy towards the new normal.”

The company said it had a double-digit revenue growth in its banking and office segments, robust sales in food, and higher dividends from its telecommunications investment, which tempered the negative impact of the pandemic on the company’s overall operating results.

Its petrochemical unit saw lower sales volumes and selling prices on the back of weaker global industrial demand while its air transport business was severely impacted by flight restrictions particularly in the onset of the enhanced community quarantine. Equity earnings from its core investments in Manila Electric Co., Global Business Power Corp. and United Industrial Corporation all declined year-on-year.

Cebu Air Inc. reported a steep loss of P22.2 billion last year due to the 78-percent decline in passengers as the number of its flights was reduced to a minimum.

The company renegotiated aircraft deliveries to manage capacity and minimize its monthly cash burn. It also reconfigured an A330 aircraft to become a freighter to maximize cargo revenues.

Food group Universal Robina Corp. reported a 10-percent income last year to P10.7 billion from last year’s P10.11 billion, despite a 1-percent fall in revenues to P133.1 billion.

Property developer Robinsons Land Corp.’s income plunged 39 percent to P5.3 billion from last year’s P8.69 billion, as its malls and hotels were closed during the strictest lockdown period, while the pace of the recovery of foot traffic in its establishments has been slow.

JG Summit Petrochemicals Group also reported a net loss of P2 billion last year from P1 billion in 2019, when it reversed an impairment loss amounting to P2.3 billion.

Full-year revenues reached P21.3 billion, down by 27 percent from the previous year. The company was able to continue with its manufacturing operations and perform its delivery commitments upon the restart of its integrated cracker and polymer operations in early March 2020.

As demand started to recover in the second half of the year with domestic customers restarting operations and with more countries reopening from lockdowns, polymer sales volumes increased by 14 percent year-on-year and the company gained market share as it capitalized on resilient demand for packaging of essential goods and agricultural requirements.

The company is nearing the final stages of its $1.1-billion expansion project with some of its key components coming online in the second quarter of 2021. This would improve overall profitability as the company starts to capture more margins with its new downstream products, the company said.

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