MANILA, Philippines—JG Summit Holdings Inc. posted a record-high net income of P21.59 billion last year, up by 32 percent from the previous year, as extraordinary gains from the Digital Telecommunications Philippines Inc. (Digitel) deal compensated for the decline in core earnings.
Profits from the sale of Digitel to Philippine Long Distance Telephone Co. amounted to P13 billion while profits from regular operations dipped by 45 percent to P8.56 billion from the previous year which JG Summit attributed to high input costs, forex movements and capital markets volatility.
JG Summit said in a disclosure to the Philippine Stock Exchange on Wednesday that the company’s core earnings before taxes, excluding the extraordinary gains from sale of Digitel and the effects of foreign exchange and market valuation losses, declined by 9 percent to P16.27 billion in 2011 from the previous year.
Consolidated revenues grew by 17 percent to P122.9 billion as all subsidiaries posted decent revenue growth. Equity income from associates and joint ventures, however, declined by 20 percent to P2.22 billion due to the lower contribution from Singapore-based affiliate, United Industrial Corp. Ltd. Where JG Summit owns a 36 percent stake.
The operating units performed as follows:
Universal Robina Corp.’s net profit declined by 41 percent to P4.64 billion for the fiscal year ending September compared with the previous year as high input costs gnawed at margins. This unit was the largest contributor to JG’s net income at 35 percent in 2011.
Cebu Pacific’s net income for 2011 fell by 47 percent to P3.62 billion as expenses grew faster than revenues due to high aviation fuel costs. This was so even as passenger volume expanded by 14 percent.
Robinsons Land Corp. grew its net profit for the fiscal year ending September by 11 percent to P3.97 billion due to the strong performance of all of the company’s business units. The residential segment posted the biggest year-on-year jump in revenues at 41 percent on the back of robust sales take-up for its new projects and increased sales for its existing projects.
Robinsons Bank posted net earnings of P368 million in 2011, up by 23.3 percent year on year, due to higher interest income and trading gains.
JG Summit Petrochemicals Corp. incurred a higher net loss of P384 million in 2011 compared with P102 million a year ago due to inventory write-offs as well as higher volume consumed and prices of bunker fuel.
JG Summit’s consolidated cash flow for the year dropped by 11 percent to P25.2 billion due mainly to the high commodity prices which eroded margins of URC and Cebu Pacific.
Meanwhile, JG Summit’s net financing costs and other charges (net of interest income) decreased by 42 percent to P2.04 billion as the level of borrowings declined after the settlement of a syndicated loan from the cash proceeds of the PLDT shares option sale as well as higher average value of the company’s investment portfolio for the year.
Mark-to-market valuation of financial assets for the year amounted to a loss of P655 million versus a gain of P1.7 billion for the same period in 2010, part of which was due to fuel hedges of Cebu Air arising from volatility in global financial and commodity markets. The group also recognized foreign exchange losses of P241 million against forex gains reported last year of P1.94 billion.