JG Summit back on track in Q3, posts profit of P844M

Gokongwei-led conglomerate JG Summit Holdings returned to profitability in the third quarter on the back of improved earnings from its petrochemical and real estate units alongside lower losses from its airline business.

JG Summit posted a third quarter net profit of P844 million, a turnaround from the P2.62-billion net loss in the second quarter. But compared to its earnings in the same period last year when the COVID-19 pandemic had yet to bludgeon the economy, net profit fell by 82.5 percent.

For the nine-month period, JG Summit booked a net profit of P124 million, down by 99 percent from the P22.2-billion net profit seen during the pre-COVID-19 period last year.

Excluding the impact of foreign exchange gains and market valuation losses, as well as the nonrecurring impairment loss recognized by its power affiliate, JG Summit’s core net income amounted to P1.2 billion for the January to September period.

“The business continues to face challenges brought about by COVID but I am encouraged by our results in the third quarter. With the easing of restrictions, economic activity has slowly returned and our different business units showed some quarter-on-quarter reco­very, but I also note that these results are far from ideal and still showed steep declines versus a year ago,” JG Summit president and chief executive officer Lance Gokongwei said in a disclosure to the Philippine Stock Exchange on Friday.

JG Summit said weaker consumer sentiment would continue to affect demand for products and services in the near term, thus making the group “cautiously optimistic.”

“We will however focus on execution to build on and continue the momentum that have started in third quarter. The prospects of a vaccine likewise give us hope that this will unlock further acceleration and recovery towards the latter part of 2021,” Gokongwei added.

In the third quarter, JG Summit’s financial position was supported by improved petrochemical utilization rates and sales volumes, the gradual resumption of Cebu Air’s domestic and international flights, increasing operational leasable space in malls and higher margins from food and banking.

For the nine-month period, JG Summit posted consolidated revenues of P167.3 billion, 27 percent lower year-on-year.