JG Summit Holdings, Inc.

JG Summit spending P78.1-billion capex this year

JG Summit Holdings Inc., the holding firm of the Gokongwei family, said it is increasing its capital expenditures (capex) this year to P78.1 billion, with most of the spending on its property-development arm after it sees declining residential sales.

Lance Y. Gokongwei, the company’s president and CEO, said P30 billion will be allocated for its property-development arm, near double than last year’s spending of about P17.3 billion. Net income of its property arm, Robinsons Land Inc., last year came flat at P5.9 billion, while revenues fell by 1 percent to P22.4 billion. It showed some recovery during the first quarter.

This year’s capex was 22 percent higher than the previous year’s P43.5 billion in actual spending.

Gokongwei said P20 billion each will be allocated for its petrochemical and airline businesses, and food group Universal Robina Corp. (URC) will spend between P7 billion and P8 billion. The rest will be allocated to its other smaller businesses, such as banks.

He added that for the first quarter alone, the company already spent P11 billion.

“Profitability remains a challenge for URC as our domestic operations face declines in volumes and changes in product mix particularly for our coffee business,” Gokongwei said.

“For URC, we will accelerate our sales and profitability for different categories. We will drive portfolio optimization for brand renovation, performance-driven promotions and review of our current assortments,” he said.

The new tax package, which slapped taxes on sugary drinks, has put a strain on its sales. Gokongwei said the company had an average price increase of about 22 percent to 23 percent.

“This effectively just recovered the increase in sugar taxes. We’ve seen a significant reduction in volumes from 12 percent to 15 percent in the first quarter because of the higher prices,” Gokongwei said.

He added the effect of the fuel price and currency has been significant for the company, which owns Cebu Air Inc., and the country’s second-largest airline, Cebu Pacific.

“The effect of fuel, approximately P20 million per month for every dollar increase in fuel and the effect of currency, is about P65 million per month…because of the weaker peso,” he said.

“In aggregate, it is costing us P700 million more per month to fly the same net worth. So we will have to avoid losses and we will really have to. We will really try to become more efficient, but likewise, we have to put in, we have applied for fuel and fare surcharge increase with the Civil Aviation Authority of the Philippines.

“The fuel surcharge we’re asking for ranges from P70 to P250 for domestic flights. This approximately recovers the cost that we’re facing. We’re really trying to minimize the increase to the lowest possible amount.”

Meanwhile, Robinsons Retail Holdings Inc., another Gokongwei-led firm but separate from JG Summit’s, said it will spend some P3.5 billion in capex this year, slightly higher than last year’s P3.1 billion.


...profit drop din 'tong isang 'to Tongue  tinamaan ng TRAIN Law

JG Summit profits drop in Q2

JG SUMMIT Holdings, Inc.’s attributable profit dropped by a third in the second quarter of 2018, as the weaker peso, higher fuel prices, as well as rising prices of raw materials for its food, airline, and chemical units tempered the double-digit increase in revenues.

In a regulatory filing, the listed conglomerate said net income attributable to equity holders of the parent went down to P5.02 billion in the April to June period, against the P7.13 billion it generated in the same period a year ago.

In contrast, revenues climbed 11.4% to P74.6 billion, thanks to the performance of Universal Robina Corp. (URC)’s branded consumer foods and agro-industrial units, the growth in Robinsons Land Corp. (RLC), and higher average selling prices of products under JG Petrochemcial Group.

“While we continue to face the challenges arising from inflation and the weaker currency further exacerbated by tougher competitive dynamics, we are delighted to see improvements in our 2Q18 results,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei was quoted as saying in a statement.

“We believe that we can navigate this environment with the fundamentals of each of our businesses intact and issues are more cyclical than structural,” Mr. Gokongwei added.

On a six-month basis, JG Summit’s attributable profit went down 32.8% to P9.84 billion, while revenues rose 8% to P145.3 billion.

For the food and beverage unit, URC reported a 23.1% decline in attributable profit to P4.81 billion during the first half. This was due to higher costs of raw materials and foreign exchange gains.

URC’s consolidates sales of goods and services amounted to P64.37 billion by end-June, 5.9% higher year-on-year.

Meanwhile, RLC’s attributable profit went up by 14% to P3.33 billion for the period, driven by higher sales of residential properties, leases of commercial spaces, and more malls operated from January to June. Revenues from the property business rose by 19% to P13.1 billion

Cebu Air, Inc., which operates low budget carrier Cebu Pacific, saw a 23.6% drop in earnings to P3.31 billion, despite a 6.1% uptick in revenues to P37.83 billion. The airline recorded a 6.3% increase in passenger revenues to P28.3 billion for the period, alongside a 28.1% increase in cargo revenues to P2.65 billion.

Operating expenses of Cebu Pacific however grew 14% to P33.06 billion, due to the rise in fuel prices during the year. The airline also recorded net foreign exchange losses of P1.58 billion as a result of the weaker peso. Cebu Pacific currently has long term dollar-denominated debt used to fund its aircraft acquisitions.

Earnings of the petrochemical business meanwhile slumped by 50.2% to P1.6 billion, amid an 8.9% climb in revenues to P21.18 billion.

JG Summit’s banking unit, Robinsons Bank Corp., delivered a 31.1% profit increase to P211.43 million, as banking revenues likewise went up 32.2% to P2.73 billion.

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(09-18-2018, 10:54 PM)gnod21 Wrote: nakaabang ako ulet sa 51

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...earnings report

JG Summit profit falls in Q3

JG Summit Holdings, Inc. saw its attributable profit drop by a fourth in the third quarter of 2018, as the weak peso weighed on its petrochemicals, food, and airline businesses.

In a regulatory filing, the Gokongwei-led conglomerate reported a net income attributable to the parent of P4.96 billion, lower than the same quarter a year ago’s figure of P6.60 billion. This came amid a six percent increase in revenues to P72.23 billion for the period.

On a nine-month basis, the listed holding firm said attributable profit went down by 30% to P14.80 billion, after revenues inched up by seven percent to P217.52 billion.

“JG Summit has a diversified portfolio with a combination of defensive and cyclical businesses. Our airline and petrochemical divisions are more susceptible to the volatility in oil prices and the weaker peso but the effect on earnings has been partly cushioned by our other core businesses in food, real estate and banking,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said in a statement.

JG Summit’s food and beverage business through Universal Robina Corp. (URC) was hit by the inflationary environment, which resulted to lower demand for ready-to-drink (RTD) beverages. This offset the improved sales in the branded consumer foods segment (BCFG) and coffee.

URC’s international BCFG also posted flat results, as sales in Thailand and New Zealand weakened despite the recovery in Vietnam.

With this, URC’s attributable profit fell by 17.2% to P6.8 billion in the nine-month period, after a 3.4% uptick in sales to P95.53 billion.

Earnings of Cebu Air, Inc. dropped by 36.5% to P2.78 billion during the January to September period, even as it booked a 7.4% increase in revenues to P54.4 billion.

The operator of budget carrier Cebu Pacific saw its expenses go up by 15.8% to P49.9 billion, primarily due to higher fuel prices. It noted that average prices based on the Mean of Platts Singapore (MOPS) stood at $85.37 per barrel from January to September, versus $62.89 per barrel in 2017. The weaker peso further pushed up the company’s expenses.

Meanwhile, the group’s property unit through Robinsons Land Corp. (RLC) improved its nine-month attributable profit by 43% to P6.55 billion, following higher sales of residential properties and better rental income. Revenues grew by 31% to P21.89 billion during the period.

RLC attributed its growth to its mall division, as it opened its 50th mall and recorded higher cinema box office receipts for the period. Its office leasing business also sustained its momentum thanks to the business process outsourcing sector, while residential revenues also went up due to higher demand from overseas buyers coupled with new product launches.

The petrochemicals group delivered earnings of P1.9 billion from January to June, 61% lower year-on-year due to unexpected plant shutdowns, generally weak demand across the region in the third quarter, higher financing costs, and foreign exchange losses. Average selling prices however increased, resulting to a 6% increase in revenues to P32.4 billion.

For Robinsons Bank Corp., net income jumped by 23% to P293 million, following a 32% increase in revenues to P4.3 billion due to higher interest income from its loan portfolio.

“Given our long-term view, we plan to continue investing wisely for growth as well as transform/strengthen our organizational capabilities so we reap the benefits when the cycle turns more favorable,” Mr. Gokongwei said.

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