The Gokongwei family’s flagship JG Summit Holdings Inc. (JGS) reported that its core net income soared nearly seven times to P9.5 billion in the first half of 2023 from the P1.4 billion it earned during the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said this was delivered on the back of sustained margin expansion across its listed subsidiaries as well as a double-digit consolidated topline growth.
Including the impact of a more favorable foreign exchange environment, JG Summit ended the first half of 2023 with a net income of P10.4 billion, a significant improvement from the P2.7 billion loss incurred in the same period last year.
“The group’s earnings improvement further accelerated in the second quarter with the sustained demand recovery and growth across our food, airline and property businesses,” said JG Summit President and CEO Lance Y. Gokongwei.
He added that, “on top of this, initiatives across our business units to tackle cost inflation and implement efficiencies to recover our margins continue to bear fruit.”
“We are now working double time to augment our capacity and improve operational resiliency by adding more planes for Cebu Pacific, addressing the supply chain issues in URC (Universal Robina Corporation to increase order fill rates, and improving RLC’s (Robinsons Land Corporation) occupancy rates and carefully launching new project developments. Meanwhile, we have begun ramping up our petrochemicals operations after months of being shut down,” Gokongwei noted.
He said also that, “I am confident that we would be able to sustain this positive momentum for the balance of the year as we proactively carry-out initiatives to stay ahead of the curve.”
Total revenues rose 12 percent year-on-year (YoY) to P163.4 billion in the first half of 2023, even with the absence of sizable contributions from its real estate arm’s residential project in China that were mostly recognized in the second quarter of last year.
Excluding this item, JG Summit’s consolidated topline expanded 23 percent YoY, which can be primarily attributed to the group’s airline, food, and domestic property businesses.
Margin improvement was more evident in the second quarter of 2023 as core net income and net income for the quarter increased 13 percent and eight percent versus the first quarter of the year to P5 billion and P5.4 billion, respectively, despite revenues remaining steady.
URC registered a net income of P6.7 billion while RLC’s net income rose 23 percent to P5.8 billion. Cebu Air posted a profit of P3.7 billion as JG Summit Olefins Corporation (JGSOC) saw a P700 million increase in net losses to P6 billion.
Robinsons Bank Corporation saw the continued double-digit growth in its higher-yielding consumer loans, which offset the five percent decline in commercial loans.
RBank’s net interest income fell 12 percent YoY to P3.4 billion in the first half of 2023 due to the upward pressure of policy rates on funding costs that caused net income margins to contract.
This, coupled with higher interest expense and share in GoTyme’s startup losses, led its net income to slip 27 percent YoY to P700 million for the first half.
JG Summit’ equity income in Meralco rose 22 percent to P4.6 billion while its share in Singapore Land Group’s (SLG) net income fell 18 percent to P1.2 billion as SLG reported lower contributions from select residential projects due to the timing of sale or completion, along with the closure of the Clifford Centre for redevelopment and asset enhancement works at Singapore Land Tower.
Dividends from PLDT improved 40 percent YoY for the first half due to a regular dividend seven percent higher than the same period last year, plus a special dividend of P14 per share. Total dividend income from PLDT amounted to P1.4 billion for the first half of 2023.