JG Summit’s net earnings soar 129% on CEB’s recovery

JG Summit Holdings Inc. (JGS), the flagship of the Gokongwei Group and one of the country’s leading conglomerates, reported that its core profits flew 129 percent to P14.9 billion for the first nine months of 2023 from P6.5 billion in the same period last year due to the record performance of Cebu Air.

In a disclosure to the Philippine Stock Exchange (PSE), the firm said core net income amounted to P5.5 billion in the third quarter of 2023, improving both quarter-on-quarter (QoQ) from P5 billion in the second quarter of 2023 and year-on-year (YoY) from P5.1 billion in the same period last year.

“We continued to sustain the topline growth and margin expansion with good operating results in the third quarter from our business units,” said JG Summit President and CEO Lance Y. Gokongwei.

He noted that, “we, however, remain cognizant of both macro and industry challenges that our SBUs continue to face, especially with the recent volatility in fuel costs and FX rates, and elevated borrowing costs. With this in mind, we carry through with our initiatives to improve efficiency and profitability, while pursuing growth.”

JG Summit said the strong growth was because of the sustained expansion in consolidated revenues and better margins from its key subsidiaries.

Consolidated revenues grew 16 percent to P251.3 billion in the first nine months of the year as third quarter revenues improved 24 percent YoY to P87.9 billion with evident increases across all its strategic business units (SBUs).

This was on the back of its airline achieving its strongest third quarter performance in history and its petrochemicals unit seeing doubled revenues coming from muted volumes in the third quarter of 2022.

The turnaround in JGS’ air transport operations plus margin gains in its real estate and food businesses further boosted this stellar topline performance, outweighing the absence of the P3.2 billion gains from the sale of Meralco shares last year and a longer petrochemicals shutdown this year.

Incorporating mark-to-market and foreign exchange gains, net profit for the first nine months of 2023 also improved to P15.4 billion, a stark contrast from the P0.9 billion loss the conglomerate saw in the same period last year.

Universal Robina Corporation’s topline was sustained on a quarter-on-quarter basis at P39 billion. Despite the challenging macroeconomic landscape from higher inflation, third quarter 2023 sales were up six percent from last year, bringing the nine-month total to P117.6 billion, or a nine percent increase year-on-year.

Higher finance costs and lower foreign exchange gains held back bottomline improvement to only four percent YoY at P9.7 billion, but core net income was up 10 percent to P8.8 billion.

Robinsons Land Corporation’s net income grew 49 percent YoY to P3.1 billion in the third quarter and 31 percent YoY to P8.8 billion for the first nine months of 2023.

Cebu Air Inc. (CEB) had its best third quarter topline performance in history with net income reaching P1.3 billion in the third quarter and P5 billion in the first nine months of 2023, a turnaround from the P12 billion loss in the same period last year.

JG Summit Olefins Corporation’s net losses narrowed to P8.8 billion in the first nine months of the year while Robinsons Bank Corporation’s net income slipped 35 percent to P0.8 billion.

JGS’ share in Meralco’s earnings jumped 32 percent YoY to P7.3 billion for the first nine months of 2023 while regular dividends received from its telco investment, PLDT Inc., increased to P94 per share in 2023, coming from P89 per share in 2022.

For Singapore Land Group (SLG), JGS’ nine-month results accounts for only the first half performance given its semi-annual regulatory reporting frequency.

Equity income in SLG for the first six months of 2023 declined 18 percent YoY as its key residential projects were substantially sold by end-2022 and property investments are undergoing redevelopment. However, these were cushioned by the recovering hotel operations of the business.