JG Summit incurs net loss in 1H

Published August 12, 2022, 2:28 AM

by James A. Loyola

JG Summit Holdings, Inc. (JGS), the flagship of the Gokongwei family, reported a net loss of P2.7 billion for the first half of 2022 from the P936.69 billion earned in the same period of last year.

In a disclosure to the Philippine Stock Exchange, the firm said losses were due to the adverse impact of the significant peso depreciation on the company’s foreign currency-denominated debt.

Core net income declined 15 percent in the first half of the year “due to the unprecedented volatility in oil and input prices that negatively affected the group’s margins and was most felt in its petrochemicals business.”

For the second quarter, JG Summit reported a 53 percent jump in consolidated revenues to P84.4 billion which brought the group’s total revenues for the first half of the year to P151.1 billion, 29 percent higher than the same period last year and is already over 95 percent back to its pre-pandemic level.

Meanwhile, the company’s core net income after tax rose 48 percent to P2.1 billion in the second quarter of 2022, strongly rebounding from the P689 million loss in the first quarter of this year.

Growth was evident across all its businesses, especially with encouraging recovery in its airline, mall and hotel operations, as well as meaningful contributions from its core investments.

JG Summit Holdings President and CEO Lance Gokongwei

“Our overall business has benefitted from the reopening of economy as evidenced by the sequential improvement on our operating results on a quarterly basis,” said JG Summit President & CEO Lance Gokongwei.

He noted that, “We are cognizant that significant challenges remain in the near term with the extraordinary cost pressures, rising interest rates and peso devaluation.”

Gokongwei also said that “Our business units have implemented measures on how to mitigate the margin erosion through selective pricing actions and productivity initiatives.”

He added that, “Given the strong demand for products and services despite the high inflationary environment in the first half of 2022, we remain optimistic that further easing of restrictions especially on international travel as well as the resumption of face-to-face classes in the 2H22 will sustain the topline growth momentum.”

Universal Robina Corporation’s net income declined by 23 percent to P6.2 billion mainly due to the higher comparable with the P3.3 billion gain from the sale of an idle asset in the first half of 2021.

Robinsons Land Corporation’s first half net income dipped 14 percent to P4.7 billion from P5.4 billion in the first half of 2021, which was boosted by Bridgetowne East sales and positive transitional adjustments from the CREATE law.

Excluding Bridgetowne East sales and the impact of CREATE law last year, first half 2022 net income increased by 24 percent.

Cebu Air, Inc. registered a lower pre-tax core net loss for the first half of P9.7 billion from P13.9 billion last year while JG Summit JG Summit Olefins Corporation ended with a net loss of 5.3 billion due to higher interest expense and foreign exchange loss while margins were impacted by the increase in naphtha consumption costs.

JGS’ equity earnings from Meralco increased to P3.8 billion, driven by higher energy sales from increase in generation pass-through charges due to rising fuel and WESM prices, and higher earnings contribution from the power generation business

Meanwhile, for Singapore Land Group, equity in net earnings amounted to P1.4 billion, a 40 percent increase, driven by higher revenue of hotel operations as the Singapore hospitality sector recovers coupled with the increase in property trading results mainly from higher shared in profits of its associates and joint ventures.

Total dividend income from PLDT for the period amounted to P1.0 billion, up by 5 percent year-on-year.