JG Summit infuses P11B into petrochem subsidiary
MANILA -Gokongwei-led JG Summit Holdings is bolstering its money-losing petrochemicals business with a cash infusion of up to P11 billion amid efforts to revitalize the segment in 2024.
The family conglomerate said in a stock exchange filing on Monday that its board approved the capital infusion into JG Summit Olefins Corp.
The subsidiary will use the proceeds to “pay off its expansion project obligations and to support its operations during a period of declining market demand and rising input costs”.
This will improve the JG Summit Olefins’ financial position amid continued business losses.
During the first nine months of 2023, these losses were narrowed modestly to P8.8 billion as the unit implemented “disciplined cost control and production efficiencies”.
Revenues during the nine-month period were flat at P25.5 billion, JG Summit said in a previous filing.
“The company is embarking on an organization-wide transformation program that targets realizable performance results within 2024,” JG Summit had said.
JG Summit reported to the stock exchange last week that core profits from January to September this year surged 128 percent to P14.9 billion while revenues grew 16 percent to P251.3 billion.
“The turnaround in JGS’ air transport operations plus margin gains in its real estate and food businesses further boosted this stellar topline performance,” the conglomerate said.
This also offset the absence of the P3.2 billion in gains from the sale of shares in power generation unit Manila Electric Co. last year.