Home Economy JG Summit working to weather short-term headwinds — Gokongwei

JG Summit working to weather short-term headwinds — Gokongwei

by

JG Summit Holdings, Inc. President and Chief Executive Officer (CEO) Lance Y. Gokongwei on Monday expressed cautious optimism amid challenges posed by high fuel prices, interest rates, and foreign exchange fluctuations.

“While we remain cautious given short-term headwinds from elevated fuel prices, interest, and foreign exchange rates, we continue to work hard to accelerate recurring core profits in succeeding quarters,” Mr. Gokongwei said during the company’s annual stockholders’ meeting.

 JG Summit has allocated P87.2 billion as its capital expenditure budget this year to fund expansion plans.

Mr. Gokongwei said the merger between Robinsons Bank Corp. and Bank of the Philippine Islands (BPI) will be a key growth driver this year.

 “From JG Summit’s perspective, we look forward to realizing additional cash flows from our banking investments in the form of cash dividends which we can then allocate to the BPI network, and then we can then allocate towards efforts to further grow and support our other businesses,” he said.

 “We are excited to unlock the merger synergies between the combined Ayala and Gokongwei groups. This includes being able to provide a wider variety of financing solutions to our suppliers such as supply chain financing which we were previously able to offer only at the limited scale due to the smaller size of Robinsons Bank,” he added.

 Mr. Gokongwei also said that JG Summit’s business units are continuously expanding their capacity and footprint to support the growth plans of the conglomerate.

 He said that listed food and beverage manufacturer Universal Robina Corp. (URC) is building a mega plant in Batangas, with the first line expected to be operational by the end of 2024.

 Meanwhile, Robinsons Land Corp. aims to open the high-end Opus Mall in Quezon City by July, as well as Robinsons Place Pagadian in Zamboanga del Sur, he added. The company also plans to add new rooms at the NuStar Resort and Casino in Cebu City by the fourth quarter.

 At the same time, he said that budget carrier Cebu Pacific aims to grow its total full year capacity by 12-15%. The growth will be led by the 18 additional aircraft that will be delivered this year, of which five had been delivered in the first quarter.

 “With these advancements across the group, we hope to remain ahead of the curve as we continue our commitment to providing our customers with better choices, and create shared success with all our stakeholders,” he said.

 Meanwhile, URC President and CEO Irwin C. Lee said the company is aiming to push volume growth to drive business despite inflationary risks.

 “What we’re trying to do is to make sure that we drive our own operating savings so we limit the amount of cost that we need to pass on to the consumers. That is the big push for 2024. We’re hoping to see renewed volume growth so that reliance on pricing growth will be minimized,” he added.

Mr. Lee added that the company has seen growth across various segments such as its snacks business despite inflationary pressures.

“We are seeing growth in our instant soluble business as people make their own coffee, and we are seeing growth where we have offerings that are below P5,” he said.

 “Equally, we are continuing to drive our brands in the higher price segments to prepare for the time that consumer confidence will be stronger. We’re also seeing that there’s a segment of consumers at the very top that are not as affected by inflationary impacts,” he noted.

 On Monday, JG Summit shares fell by 2.58% or 80 centavos to P30.20 per share. URC stocks dropped by 0.93% or P1 to P106 apiece. — Revin Mikhael D. Ochave

Related News