earnings reports

Gokongwei’s JG Summit incurs P720-million losses in H1 2020

Ralf Rivas
Gokongwei’s JG Summit incurs P720-million losses in H1 2020
The Gokongwei family's food and banking businesses manage to grow, but the coronavirus pandemic's impact on Cebu Pacific leads to losses

JG Summit Holdings booked a net loss of P720 million in the 1st half of the year, from last year’s profits of P17.4 billion, as its airline and petrochemicals businesses took a hit from the coronavirus pandemic.

The holding company of the Gokongwei group reported a core net income – which excludes non-operating and nonrecurring items – of P1.4 billion for the 1st semester, an 89% decline from the P13.4 billion a year ago.

Consolidated revenues were down by 26% from P158.4 billion to P116.5 billion.

“We have experienced the more pronounced impact of COVID-19 on our businesses in the recent quarter with the implementation of the stricter lockdown and quarantine protocols nationwide,” said JG Summit president and chief executive officer Lance Gokongwei.

“This continued to disrupt our operations, supply chain, and customers with flight restrictions in our airline, limited operations of our petrochemical customers, and temporary closures in some of our malls and hotels. While some businesses were heavily disrupted, we are fortunate that we have a diversified portfolio that cushioned the impact with strong profits coming from food, banking, and core investments in telecoms,” he added.

Here is the snapshot of the Gokongwei group’s financials:

Cebu Air

Net loss: P9.1 billion

Revenues: Down 61% to P17.3 billion

Budget airline Cebu Pacific saw a 60% drop in passenger traffic during the period, resulting in a 66% drop in passenger revenues.

JG Petrochemicals

Net loss: P2.7 billion

Revenues: Down 61% to P7.2 billion

The decline was due to lower petrochemical prices in the region amid the pandemic. Volume continued to struggle in the 2nd period, as customers found it difficult to continue operations due to the lockdowns.

Robinsons Land

Net income: Down 7% to P3.7 billion

Revenues: Up 3% to P15.2 billion

Robinsons Land temporarily closed malls due to the pandemic. Only 12 out of 20 hotels were operational to serve business process outsourcing companies and long-staying guests.

Robinsons Bank

Net income: Up 234% to P628 million

Revenues: Up 23% to P4.8 billion

Despite higher loan loss provisioning due to the pandemic, the robust top line growth, as well as wider net interest margins, Robinsons Bank managed to grow during the semester.

Universal Robina

Net income: Up 8% to P5.5 billion

Revenues: Flat at P67.4 billion

Growth was driven by its agro-industrial and branded consumer foods businesses. 

Overall, JG Summit’s balance sheet remains healthy, with cash on hand amounting to P17.5 billion and net debt at P70.8 billion as of end-June. – Rappler.com

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.