JG Summit Holdings, Inc., one of the country’s largest and most diversified conglomerates, core net income declined 21 percent to P948 million in the first nine months of 2021 from the P1.2 billion earned in the same period last year weighed down by its airline business unit.
In a disclosure to the Philippine Stock Exchange, the firm said it posted narrower margins in the third quarter of 2021 due to record-breaking cost inflation, which weighed down Cebu Air, Inc., JG Summit Petrochemicals Group and Universal Robina Corporation.
Excluding airline, JG Summit’s nine-month core net income and net income amounted to P14.5 billion and P12.3 billion, up 36 percent and 22 percent year-on-year(YoY), respectively.
The relatively slower net income growth was mainly attributable to a net forex loss of P3.9 billion as peso depreciated against the US dollar, cushioned by the favorable impact of the CREATE law.
JG Summit registered revenues of P50.4 billion for the third quarter of 2021, a 9 percent growth year-on-year.
Amid the reimplementation of stricter lockdown given the Delta variant, the company’s pace of recovery decelerated from a 24 percent YoY registered growth in the second quarter of 21, which came from a low base given the onset of the pandemic last year.
On a year-to-date (YTD) basis, JGS’ consolidated revenues totaled P167.9 billion, a 9 percent increase versus same period last year.
The topline growth was mainly driven by expanded capacity and improved utilization rates of its petrochemical plants, the contribution from its Chengdu real estate project, higher earnings from its core investments in Meralco and PLDT, and the resilient topline of its food, banking, and office segments.
All subsidiaries exhibited growth except for airline as commercial passenger flights continue to be limited given existing mobility restrictions.
“Although the third quarter presented challenges to some of our subsidiaries, we have seen green shoots in the market and recovery in consumer demand for products and services as vaccination rollouts accelerate and mobility restrictions ease starting November,” said JG Summit’s President & CEO Lance Gokongwei.
He added that, “We anticipate these developments to positively impact our airline, hotels, malls and food segments.”
However, Gokongwei noted that, “While the sentiment is getting better, our margins will be affected by inflationary pressures driven by higher oil and input prices as well as the devaluation of the peso. Our plan is to manage these headwinds through better pricing and cost management measures.”
“Overall, we remain optimistic that the situation will continue to improve and JG Summit will benefit from the diversity of our portfolio and the strength of our balance sheet. We expect to pivot back to recovery in 2022 and reach pre-COVID levels by 2023,” he said.
Universal Robina Corporation’s net income significantly increased by 40 percent to P10.5 billion from the gain on sale of idle land and the favorable impact of the CREATE law.
Robinsons Land Corporation’s net income expanded by 44 percent to P6.3 billion, driven by strong EBIT performances of most business units, the impact of Chengdu and Bridgetowne lot sales, and the benefits of the CREATE law.
Cebu Air, Inc. posted a net loss of P22.0 billion for the first nine months of 2021 due to higher fuel prices and maintenance-related expenses, higher interest and accretion expense and foreign exchange loss.
JG Summit Petrochemicals Group incurred a 9M21 net loss of Php423 million, still an improvement from the Php1.9 billion loss posted last year.
Robinsons Bank Corporation (RBank) posted a net income of P942 million, a 20 percent increase YoY while equity in net earnings of Meralco increased to P4.7 billion.
Meanwhile, for the Singapore Land Group, equity in net earnings for first half of 2021 amounted to P1.0 billion while received P2.0 billion in dividends from PLDT in the first nine months of 2021.