CONGLOMERATE JG Summit Holdings, Inc. posted a 39% drop in revenue in the third quarter to P3.1 billion, but its president still hopes to end the year “on a positive note.”
“We expect a better fourth quarter to end the year doing well. This will also establish a strong foundation as we pursue efforts to drive top-line growth both sequentially and marginally across our operating centers,” JG Summit President and CEO. (CEO) Lance Y. Gokongwei said so in a statement sent to the public on Wednesday.
JG Summit’s third quarter consolidated revenue increased 1.4% to P89.1 billion from P87.9 billion last year.
“This is due to the huge loss from JG Summit Olefins Corp. (JGSOC) with a long trough in the global petrochemical industry cycle, lower sugar profits from Universal Robina Corp. (URC) due to price adjustments and increased pricing, and reduced average fares from Cebu Air, Inc. (CEB) to increase demand during the normal period of dependence on Philippine aviation,” the conglomerate said.
Mr. Gokongwei said that most of the businesses in the organization were affected by the sluggishness of consumer sentiment “which dampened the demand for products and services.”
“We are seeing a consumer trend towards food and beverage products, a weak travel quarter from time to time, and a long-term decline in the petrochemicals industry impacting our recent results,” he said.
In the first nine months, JG Summit recorded a 16% increase in revenue to P17.9 billion, while core profit increased 39% to P20.3 billion.
The conglomerate’s top line rose 10% to P277 billion from P251.3 billion last year on healthy demand for tourism and leisure activities, a higher selection of value food and beverage products, and increased consumption levels in the group’s petrochemical industries.
The food division led by URC recorded an 18% drop in net income to P8 billion due to the termination of its China business and lower foreign exchange earnings compared to last year.
URC’s top line rose 1% to P118.9 billion, led by its international operations and double-digit growth in its ready-to-drink beverages business.
In the real estate and hotel business, Robinsons Land Corp. (RLC) had a slight increase in core income and net income to P9.3 billion due to the higher share of minority owners in the profits of subsidiary RL Commercial REIT, Inc.
RLC’s top line grew 4% to P29.3 billion, while earnings before interest, taxes, depreciation, and amortization rose 7% to P17.8 billion.
In the airline business, CEB posted a 33 percent drop in net profit to P3.4 billion due to higher depreciation and financing costs related to its growing fleet.
Gross profit also decreased by 32% to P3.2 billion.
Revenue increased 11% to P74.5 billion amid a 13% increase in passengers since the end of September.
The JGSOC-led petrochemicals business widened its losses to P11.4 billion amid “unfavorable global market conditions.”
Revenue is up 53% from a low point in 2023, driven by “higher levels of plant performance and the full adoption of the pricing tool in its business-wide transformation plan.”
Meanwhile, JG Summit’s share of the nine-month earnings of Manila Electric Co. rose 19% to P8.7 billion on record sales and higher contributions from its power generation and electricity sales businesses.
For Singapore Land Group (SLG), the nine-month JG Summit results account for the first half’s activity only, given SLG’s regulatory reporting frequency of one year. Equity earnings from SLG rose 15% to P1.3 billion on strong hotel business and higher rental income.
Shares received by JG Summit from PLDT Inc. decreased by 11% to P2.3 billion due to the absence of special dividends declared in 2023.
JG Summit received P373 million in cash dividends from the Bank of the Philippine Islands (BPI) in light of the successful merger of BPI and Robinsons Bank earlier this year.
On Wednesday, JG Summit shares fell 3.23% or 75 centavos to P22.45 each. – Revin Mikhael D. Ochave
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