Gokongwei-led conglomerate JG Summit Holdings Inc. is implementing austerity measures and recalibrating its pricing strategies as geopolitical volatility in the Middle East threatens to erode margins across its aviation and consumer units.

Lance Y. Gokongwei, JG Summit president and chief executive officer, said the holding company is navigating what he described as a period of “heightened geopolitical and macroeconomic uncertainty.”
Gokongwei further stated that the dual impact of surging fuel costs and a depreciating peso is beginning to weigh on consumer purchasing power, prompting JG Summit to prioritize capital preservation over aggressive volume growth.

Gokongwei’s cautious outlook comes even as JG Summit reported a 19 percent increase in first-quarter net income to ₱5.2 billion, bolstered by the divestment of its loss-making petrochemical operations. However, the underlying financial picture remains complex, with core net income, which strips out one-off items, having retreated eight percent to ₱6.9 billion.

The decline was driven by higher interest expenses tied to debt inherited from the shuttered petrochemical unit, an increased minority stake in its real estate investment trust, and a slump in sugar prices affecting its food division.

When accounting for foreign-exchange losses on dollar-denominated debt—a result of the peso’s recent slide—net income from continuing operations tumbled 27 percent to ₱5.5 billion.

“We are not immune to the headwinds facing our portfolio and the broader economy,” Gokongwei said in a statement to the Philippine Stock Exchange. “What we can control, we are managing closely—implementing austerity measures to drive cost discipline, adjusting prices in a measured manner, and maintaining balance sheet strength.”

Total consolidated revenue for the period rose seven percent to ₱99.9 billion supported by record passenger traffic at Cebu Air Inc. and steady volumes at Universal Robina Corp. (URC).

Operating profit also climbed nine percent to ₱17.1 billion due to improved efficiency across its business segments.

Cebu Air, the country’s largest budget carrier, reported a ₱400 million net loss, swinging from a profit a year earlier. While revenues rose 10 percent to ₱33.3 billion, the airline was hit by the “unfavorable translation impact” of a weaker peso on its debt and disruptions to its Middle East flight path. The carrier is now prioritizing “route profitability over volume” to shield its balance sheet.

Universal Robina Corp. saw its revenue rise six percent to ₱47.9 billion, though net income slipped four percent to ₱4.0 billion as lower commodity prices for sugar squeezed the unit’s bottom line.

Meanwhile, Robinsons Land Corp. reported an 11 percent revenue jump to ₱12.2 billion, though net income growth was capped at two percent to ₱3.5 billion, due to higher minority interest payouts.

The group’s investment portfolio provided some cushion as equity income from Manila Electric Co. rose four percent to ₱2.8 billion, fueled by gains in power generation and solar assets.

Conversely, dividend income from PLDT Inc. edged lower as the telecommunications giant trimmed its payout by one peso per share to ₱46.

JG Summit’s results did not yet include contributions from Singapore Land, which reports semi-annually, or Bank of the Philippine Islands, which typically declares dividends in the second quarter. (James A. Loyola)