JG Summit 2016 core net income up by 6.9%

Gokongwei-led JG Summit Holdings Inc. posted a 6.9-percent increase in its consolidated core net income to P29.97 billion last year as the double-digit earnings growth of its airline and petrochemicals businesses made up for the slack in branded consumer foods business and dividends from PLDT Inc.

However, a P16.71-billion impairment loss booked primarily due to the decline in market value of JG Summit’s 8-percent stake in PLDT translated to a 51.7-percent drop in headline net profit to P10.92 billion last year.

In accordance with the current Philippine Accounting Standard (PAS) 39, if a decline in fair value of an equity investment is significant or prolonged, the impairment is recognized in net income rather than in equity. But in 2018, upon effectivity of the International Financial Reporting Standard (IFRS) 9, JG Summit said its consolidated net income for 2016 would be restated with market valuation losses on PLDT investment charged back to equity.

Excluding the effect of the impairment loss from PLDT, JG Summit’s consolidated net income from equity holders of the parent hit P27.63 billion last year, up by 22.2 percent from year-ago level.

Cash flow rose by 8.6 percent to P69.27 billion while consolidated revenue rose by 4.9 percent to P240.5 billion last year.

Airline operator Cebu Air, JG Petrochemicals Group and Robinsons Bank performed well last year.

Cebu Air saw a 122.3-percent growth in net profit last year to P9.75 billion. Total revenue went up by 9.6 percent to P61.9 billion mainly due to a 4.1-percent growth in passenger volume and 4.9-percent increase in average fares.

JG Petrochemicals Group posted a 62.4-percent profit increase to P5.13 billion. Revenue rose by 8.6 percent to P29.07 billion due to higher sales volume.

Robinsons Bank’s net income last year hit P256.65 million, up by 140.6 percent.

Food manufacturing arm Universal Robina Corp. (URC) and property unit Robinsons Land Corp. (RLC) posted lower profits.

URC’s profit fell by 7.1 percent to P12.87 billion. Sales were “muted as an aftermath of the hiccups in its supply chain operations,” the company said. Total revenue slightly rose to P112.61 billion from P112 billion in 2015 due to the revenue growth in the sugar, feeds and renewables businesses, which was offset by the decline in sales of the branded consumer foods group.

RLC’s net income stood at P5.75 billion, down by 3.5 percent from last year’s level, because of an increase in interest expense. However, RLC’s revenue rose by 12.1 percent to P22.75 billion due to higher rental income and real estate sales.