JG Summit trims net loss on strong demand growth

Conglomerate JG Summit Holdings Inc. said it recorded a consolidated net loss of P859 million in January to September, narrower than the P2.4-billion loss it incurred last year due to the impact of the foreign exchange losses and other mark-to-market adjustments.

Core net income for the period reached P6.5 billion, a tenfold increase from the previous year’s P600 million, driven by both the significant improvements in the operating results of its consumer-facing businesses.

During the period, the company booked a P3.2-billion gain from the sale of its 3.2-percent stake in Manila Electric Co. in July.

“Our core businesses in food, airline, real estate and banking continue to benefit from the sustained strong demand brought about by the increase in economic activity and mobility despite the high inflationary environment while our petrochemicals business continue to suffer from weaker export demand,” Lance Gokongwei, the company’s president and CEO, said.  “We have implemented strategies from gradual pricing actions and cost management initiatives to cushion the impact on our bottom line and margins. While we anticipate to finish the year stronger with topline momentum continuing into the fourth quarter our stance on margin recovery remains cautious.”

Consolidated revenues  grew 34 percent to P224.8 billion for the period, with its key subsidiaries in food, property and banking posting double-digit topline growth, while its airline saw strong recovery as travel restrictions were eased.

For the third quarter alone, it had revenues of P73.7 billion, a growth of 46 percent from the previous year.

Cebu Air Inc., which owns Cebu Pacific airline, halved its losses to P12 billion during the period, as its margins were still greatly affected by higher jet fuel costs and the peso devaluation throughout the quarter.

Forward bookings have increased as the year-end holidays draw near coupled by the success of its seat sales, the company said.

JG Summit Olefins Corp. had a net loss of P9 billion for the period due to higher depreciation, interest and forex losses.

Revenues fell 4 percent to P26.2 billion mainly due to lower polymer sales. This was cushioned by the fresh contributions from the sale of aromatics, butadiene and liquefied petroleum gas trading.

In May, the company was forced to shut down its cracker and downstream polymers and extraction units given the weak demand for both domestic and export markets, especially with the sustained lockdowns in China and elevated freight costs.

These plants were  restarted within August and September, although below full capacity, as supply-demand dynamics improve while remaining cautious due to the lingering global recession sentiment.

Robinsons Bank Corp.’s net income grew 37 percent to P1.3 billion, surpassing its full-year 2021 profits, as gross profits grew 11 percent to P7.7 billion.

The equity income of the company rose 17 percent to P5.5 billion, driven by the continuing growth in energy sales and increased earnings of its power generation business in Singapore.

These results already take into account the lower ownership stake of JG Summit at 26.4 percent as of the third quarter from 29.6 percent last year given the share sale in July.


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