JG Summit Holdings, Inc., the highly-diversified flagship of the Gokongwei group, reported a 98 percent fall in core net income to P450 million last year mainly due to the losses of its airline and petrochemicals businesses during the pandemic.
In a disclosure to the Philippine Stock Exchange, the firm said consolidated revenues for 2020 amounted to P221.6 billion, 27 percent lower versus the same period last year.
“Coming from a very strong 2019, COVID-19 has clearly disrupted the business which dented our 2020 operating and financial results. Nonetheless, our diversified portfolio of market-leading businesses coupled with the strength of our balance sheet helped us navigate the situation,” said JG Summit President Lance Gokongwei.
JG Summit said the double-digit revenue growth in its banking and office segments, robust sales in food, and higher dividends from its telecommunications investment, tempered the negative impact of the pandemic to the company’s overall operating results.
Its petrochemical unit saw lower sales volumes and selling prices on the back of weaker global industrial demand while its air transport business was severely impacted by flight restrictions particularly in the onset of the enhanced community quarantine (ECQ).
Equity earnings from its core investments in Manila Electric Company (Meralco), Global Business Power Corporation (GBPC) and United Industrial Corporation (UIC) also declined year-on-year.
The strong margin expansion in its food and banking units also provided some buffer to offset profit declines in other businesses.
Incorporating non-recurring fuel hedging losses and a one-off impairment charge from Meralco led JG Summit to report a consolidated net loss of P468 million from a net profit of P42.67 billion in 2019.
Excluding Cebu Air, Inc., which operates in one the most affected industries globally, JG Summit’s revenues, core net income after tax and net income would have only declined 8 percent, 21 percent, and 42 percent, to P199.0 billion, P15.3 billion and P14.6 billion, respectively in 2020.
“The pandemic has further accelerated our multi-year transformation program that we laid out even prior to COVID. Most important of which is our thrust on digitalization and customer centricity that enabled us to quickly adapt our business model to the changing customer landscape,” said Gokongwei.
He added that, “With our long term view, we will continue to invest in the necessary assets and capabilities needed to sustain the business in the years to come. This will allow us to take advantage of emerging opportunities as the economy pivots back to growth.”
Universal Robina Corporationreported flat revenues but operating income rose 7 percent driven by better product mix, lower input cost, favorable forex and overall cost management initiatives. Thus, full year net income grew 10 percent to P10.7 billion.
Robinsons Land Corporation (RLC) ported revenues of P24.9 billion, 18 percent lower from 2019 as malls and hotels were severely impacted by the lockdowns. These declines were tempered by the 10 percent growth in its Office Division and a 33 percent increase in residential revenues.
However, additional depreciation from properties opened in late 2019 as well as additional interest expense from the company’s P13.2 billion bond issuance pulled down net income by 39 percent to P5.3 billion.
Cebu Air saw a 78 percent decline in passengers’ traffic from the 71 percent drop in its number of flights in 2020. With the reduced operations, overall 2020 revenues fell 73 percent to P22.6 billion resulting in a net loss of P22.2 billion.
JG Summit Petrochemicals Group (JGSPG) ended 2020 with a 27 percent drop in revenues to P21.3 billion, leading to a net loss of P2 billion from a net income of P1 billion in 2019.
Robinsons Bank Corporation’s revenues rose 13 percent to P9.2 billionfue to the 8 percentincrease in loans and the P939 million gain from trading activities.
Despite booking Php1.1 billion in provisions for bad loans, its net income rose 30 percent to P935 million.
Equity in net earnings of associated companies and joint ventures decreased by 43 percent to P7.6 billion. mainly due to the absence of the P3.0 billion gain from UIC’s Marina Mandarin transaction in 2019 and JG Summit’s P1.3 billion share in Meralco’s impairment loss on its Pacific Light Power investment in 2020.
Meralco and GBPC also reported lower electricity revenues but dividends received from PLDT, Inc. rose by 51 percent.