JG SUMMIT Holdings, Inc.’s nine-month core net income reached P6.5 billion, more than 10 times the P600 million posted in the same period last year, as the Gokongweis’ consumer-facing businesses improved.
“Our core businesses in food, airline, real estate and banking continue to benefit from the sustained strong demand brought about by the increase in economic activity and mobility,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said in a stock market disclosure on Thursday.
He added that the listed holding firm’s petrochemical business suffered due to a “weaker export demand.”
From January to September, consolidated revenues amounted to P224.8 billion, a surge of 34% versus the level in the previous year.
In the third quarter, the firm’s consolidated net loss narrowed to P859 million from the P2.4-billion loss a year earlier. The improvement comes after its topline rose by 46% to P73.7 billion despite being tempered by the shutdown of its petrochemical plants from May to August.
“We have implemented strategies from gradual pricing actions and cost management initiatives to cushion the impact on our bottom line and margins,” Mr. Gokongwei said.
He added that while the firm anticipates finishing the year stronger with its topline maintaining its momentum into the fourth quarter, “our stance on margin recovery remains cautious.”
At the beginning of the third quarter, JG Summit recognized a P3.2-billion portfolio management gain after it sold its partial 3.2% stake in Manila Electric Co.
For its nine-month revenues, the firm’s petrochemical business recognized a 4% fall to P26.2 billion due to lower polymer sales.
JG Summit Olefins Corp. (JGSOC) was able to cushion the lower polymer sales through sales from its aromatics, butadiene, and liquefied petroleum gas trading.
JGSOC, due to higher interest and foreign exchange losses, posted a net loss of P9 billion during the nine-month period.
Meanwhile, JG Summit’s banking segment registered an 11% revenue growth to P7.7 billion from January to September.
“This was on the back of strong loan expansion and higher fee income from its fast-growing credit card and merchant acquiring business,” the company said.
Robinsons Bank Corp. also posted higher net interest income at P5.8 billion, up by 17% on rising global interest rates and faster growth in higher-yielding loans.
In a separate disclosure, JG Summit said its board of directors approved a proposed infusion of P5 billion into JGSOC. It said the additional capital is intended “primarily to pay off its outstanding obligations resulting from its expansion projects and to cover uncertainty of the petrochemical industry.”
The capital hike will be through a cash purchase of shares of stock, with JG Summit subscribing to additional JGSOC shares, which will be issued out of existing unissued shares.
JGSOC maintains a naphtha cracker plant and related facilities to produce polymer-grade ethylene, polymer-grade propylene, pyrolysis gasoline, mixed C4, pyrolysis fuel oil, and other products and their by-products.
On Thursday, JG Summit shares fell 4.18% or P1.90 to close at P43.60 each.
JG Summit income hits P6.5B as economy improves
Source: Bantay Radio
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