Home Economy JG Summit turns around, earns P15B as subsidiaries lift revenues

JG Summit turns around, earns P15B as subsidiaries lift revenues

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GOKONGWEI-LED JG Summit Holdings, Inc. posted a P15.4 billion net profit in nine months through September, reversing the P900 million net loss a year ago, as its business units boosted the group’s revenues.

In a regulatory filing on Tuesday, JG Summit said its consolidated revenues during the January-to-September period rose 16% to P251.3 billion, while core profit reached P14.9 billion.

In the third quarter alone, consolidated revenues rose 24% to P87.9 billion while core net income after taxes improved 7% to P5.5 billion.

JG Summit said the turnaround in its air transport operations as well as margin gains in its real estate and food businesses further boosted its top line, outweighing the absence of the P3.2 billion gains from the sale of Manila Electric Co. (Meralco) shares last year and a longer petrochemicals shutdown this year.

“We continued to sustain the top line growth and margin expansion with good operating results in the third quarter from our business units. We, however, remain cognizant of both macro and industry challenges that our strategic business units continue to face, especially with the recent volatility in fuel costs and foreign exchange rates, and elevated borrowing costs,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said. 

“With this in mind, we carry through with our initiatives to improve efficiency and profitability, while pursuing growth,” he added.

JG Summit’s Universal Robina Corp. posted a 9% increase in its nine-month revenue to P117.6 billion led by the double-digit growth in its agro-industrial and commodities division while its branded consumer foods saw tempered rates against macro headwinds and post-pricing volume softness.

The conglomerate’s real estate arm, Robinsons Land Corp., logged a 31% increase in its nine-month net income to P8.8 billion. 

“RLC saw total revenues of P9.8 billion in the third quarter, climbing 26% year on year, with the strong performance of its domestic divisions, driven by malls and hotels. However, the high base in 2022 from the significant Chengdu sales in second quarter last year led to the 18% slip in nine-month revenues,” JG Summit said. 

Cebu Air, Inc. posted a turnaround in its nine-month net income to P5 billion from the P12 billion net loss last year as revenues rose 78% to P66.9 billion.

“Nine-month revenues were propelled by passenger demand coupled with higher fares and better ancillary yields. Despite the significant increase in operations, the hike in the airline’s costs was relatively manageable given favorable oil prices and more efficient fuel consumption,” JG Summit said.   

JG Summit Olefins Corp. narrowed its nine-month net loss to P8.8 billion due to the implementation of cost control and production efficiencies. The company’s revenues remained “largely flat” at P25.5 billion. 

“Disciplined cost control and production efficiencies along with positive margins for its relatively newer products — aromatics and butadiene — as well as liquefied petroleum gas trading under its subsidiary Peak Fuel Corp. offset the slight decline in top line,” JG Summit said. 

“The company is embarking on an organization-wide transformation program that targets realizable performance results within 2024,” it added.

Robinsons Bank Corp. posted a 35% drop in nine-month net income due to rising deposit rates.

“Net interest margins felt downward pressure from the faster-rising deposit rates, leading net income to slip 35% to P0.8 billion for the nine-month period,” JG Summit said.

“Gross revenues for Robinsons Bank increased by 19% and 25% year on year, with third quarter and nine-month periods at P3.2 billion and P9.6 billion, respectively. This was on the back of higher gross interest income from its loan and treasury assets, coupled with a double-digit growth in the bank’s fee income,” it added. 

Meanwhile, JG Summit said its share in Meralco earnings as of September rose 32% to P7.3 billion “driven by higher energy demand, robust power generation business, the turnaround of Global Business Power [Corp.], and the completion of distribution and asset true-up refunds.” 

JG Summit said its equity income in Singapore Land Group (SLG) declined 18% year on year “as its key residential projects were substantially sold by end-2022 and property investments are undergoing redevelopment.”

“For SLG, JG Summit’s nine-month results account for only the first half performance given its semi-annual regulatory reporting frequency,” JG Summit said. 

In a separate disclosure, listed casual dining restaurant chain Shakey’s Pizza Asia Ventures said it had a 64% increase in its nine-month net income to P746 million led by a 40% growth in systemwide sales to P13.5 billion.

“We are pleased to see all our brands growing double-digit despite the prior year’s high base and the softer consumer sentiment in light of persistent inflationary pressures. Our emphasis on delivering superior value is proving to be a win-win strategy for both our guests and brand portfolio,” Shakey’s President and Chief Executive Officer Vicente L. Gregorio said.

In October, Po-led Century Pacific Group, Inc. and Gokongwei-led JE Holdings Inc. increased their stakes in Shakey’s after buying the stake of Singapore’s sovereign wealth fund GIC, through affiliate Arran Investment, under a private placement scheme.   

Century Pacific bought 185 million shares, increasing its stake in Shakey’s to 62%, while JE Holdings purchased 98 million shares, hiking its stake to 14.9%. The shares were bought at P9.50 apiece.   

GIC previously held 283 million shares, accounting for a 16.8% stake in Shakey’s.

On Tuesday, shares of JG Summit at the local bourse rose 20 centavos or 0.53% to P38.20 apiece while Shakey’s shares closed unchanged at P9.26 each. — Revin Mikhael D. Ochave

Neil Banzuelo




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