JG Summit net income grows by 54% in Q1 2019

MANILA, Philippines – Gokongwei-led JG Summit Holdings saw its consolidated net income jump by 54% year-on-year to P7.4 billion in the 1st quarter of 2019, as 3 of its businesses posted better performance.

In a disclosure to the Philippine Stock Exchange on Wednesday, May 15, the conglomerate said its growth was mainly driven by its food, air transport, and property businesses, which offset the decline in income of its bank and petrochemical businesses.

“Coming from a very challenging 2018, we are delighted to start the year stronger with the good execution of the strategic initiatives we have set in place,” JG Summit president and chief executive officer Lance Gokongwei was quoted as saying in the statement.

“We are also benefiting from a more favorable macroeconomic environment with better consumer sentiment driving the growth of our core businesses in food, real estate, and airline,” he added.

JG Summit’s consolidated revenues also climbed by 9% year-on-year to P76.3 billion. Meanwhile, the company’s core earnings after taxes – from its food, real estate, and airline businesses – grew by 28% year-on-year.

As for net earnings of associated companies and joint ventures, JG Summit also reported an 11% year-on-year increase to P2.7 billion, primarily driven by the 7% year-on-year increase in equity earnings from the Manila Electric Company.

The company also saw a 37% increase in equity earnings from United Industrial Corporation.

Dividends from PLDT also jumped by 29% year-on-year. These gains tempered the 70% year-on-year decline of Global Business Power.

Gains

The launch of Universal Robina Corporation Philippines’ new white coffee line in January helped steer its growth in the first 3 months of 2019, while Cebu Pacific’s topline performance also accelerated by 16% year-on-year in the same period. (READ: Cebu Pacific expects to ‘keep fares low’ with 12 new aircraft in 2019)

Cebu Pacific’s net income jumped by 138% to P3.4 billion as it only reported “single-digit growth” in expenses for flying operations as well as aircraft and traffic servicing costs. The budget carrier also reported hedging gains and lower foreign exchange losses.

Robinsons Land Corporation also saw its profits grow in almost all segments. Its net income climbed by 19% year-on-year to P1.8 billion with tempered costs as well as general and administrative expenses.

Its malls business posted 9% growth with higher rental revenues and new malls, while offices and hotels also saw higher rent and renewal rates as the company opened new projects.

As for its industrial and integrated developments division, JG Summit credited its improved performance “mainly due to the recognition of lease revenues from the Sucat warehouse.”

Only its residential division saw a decline due to “the timing of revenue recognition from full equity sales,” the company said.

Losses

JG Petrochemicals Group posted a net loss of P700 million in the 1st quarter. Its revenues slipped by 8% year-on-year to P9.6 billion as its 4% volume growth was not able to offset the 12% drop in average selling prices. 

“The lower selling prices were mainly due to the 9% decline in the market price of naphtha, as well as some oversupply in the market for pyrolysis gas,” JG Summit said.

The company also reported higher interest expense from “higher levels of trust receipts,” or the document issued by a bank on the release of goods to a customer.

Meanwhile, Robinsons Bank Corporation reported that its net income for the 1st quarter fell by 58% year-on-year to P42.5 million despite the 40% year-on-year increase in its gross revenues to P4.3 billion.

The increase in average deposit costs and additional interest from the company’s bills payable offset the 24% year-on-year growth in loans. – Rappler.com