JG Summit nets P23B

Gokongwei-led conglomerate JG Summit Holdings boosted its nine-month net profit by 44.4 percent year-on-year to P23.25 billion, led by the strong growth of its airline and petrochemical businesses.

In the third quarter alone, JG Summit’s net profit surged by 114 percent year-on-year to P5.72 billion, the company said in a regulatory filing.

JG Summit attributed the nine-month performance mainly to the double-digit income growth in the airline business under Cebu Air, which benefited from the drop in fuel prices and fuel hedging gains.

The conglomerate also noted the performance of the petrochemicals business, which had expanded significantly since the start of its integrated operations in November 2014 coupled by the lower costs of naphtha feedstock sold during the period.

Excluding non-operating and non-recurring items, JG Summit’s core net income after taxes increased by 10 percent year-on-year to P22.83 billion. Consolidated revenues rose by 4.6 percent to P169.78 billion in the first nine months.

Key publicly listed subsidiaries Universal Robina Corp. (URC), Cebu Air and Robinsons Land Corp. (RLC) all reported double-digit year-on-year profit growth in the first nine months as follows:

-URC’s net income increased by 11 percent to P10.5 billion;

-Cebu Air’s net income surged by 99.6 percent to P7.1 billion; and,

-RLC’s net income rose by 12.7 percent to P4.81 billion.

The petrochemicals business under JG Summit Petrochemicals group, on the other hand, recorded a 208.5 percent jump in nine-month net income to P4 billion.

Banking arm Robinsons Bank Corp., on the other hand, increased nine-month profit by 72.7 percent year-on-year to P218.23 million on higher interest income, commission income and trading gain for the period.

For URC, total revenues were flat at P82.04 billion in the first nine months compared to P81.73 billion in the same period last year mainly due to the decline in sales of branded consumer foods group and international operations.

Domestic operations posted a 3.6 percent year-on-year increase in net sales to P44.3 billion for the nine-month period, mainly driven by growth in ready-to-drink beverages. On the other hand, URC’s international branded consumer food group business reported an 11.9-percent year-on-year decline in nine-month net sales to P22.48 billion due to regulatory issues encountered in Vietnam, which affected both sales and profitability. But most overseas markets managed to grow sales with Indonesia, Thailand and Malaysia as contributors.

Cebu Air’s total revenues went up by 10.5 percent year-on-year to P46.69 billion for the nine-month period, owing to the 6-percent increase in passenger volume and 8.4 percent increase in average ancillary revenue per passenger.

RLC’s total nine-month revenues also increased by 15.2 percent year-on-year to P16.81 billion brought about by the growth in real estate sales and rental income contribution of the four newest malls and and three new office buildings.

JG Petrochemicals Group’s revenues increased by 8.2 percent year-on-year to P21.03 billion on higher sales volume.

Meanwhile, revenues from JG Summit’s core investments declined in the first nine months compared to same period last year as dividend income dropped by 29.4 percent to P1.99 billion this year, mainly due to lower dividends declared by PLDT Inc. for the period.

Equity in net earnings of associates, primarily from investments in Singaporean property developer UIC and Manila Electric Co. slightly to P6.35 billion from P6.03 billion for the nine-month period.

As JG Summit purchased a 30 percent stake in Global Business Power Corp. last June, a corresponding equity earnings take-up was recorded for the period.