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JG Summit turns profitable with P4.4-billion net income

JG Summit Holdings, Inc. booked a core net income of P4.4 billion in the first quarter, reversing a P689-million net loss a year ago, after the robust performance of its business units.

“The momentum that has started in the latter part of 2022 continued to accelerate in the first quarter of 2023 with strong top-line results and a recovery in core earnings,” Lance Y. Gokongwei, JG Summit president and chief executive officer, said in a statement on Monday.

He said most of the firm’s core businesses are “poised to approximate or even eclipse their pre-pandemic highs” despite the continuing challenges faced by the petrochemicals industry.

Mr. Gokongwei said he expects a “strong recovery in our airline, consistent growth of our food driven by buoyant demand, and the reliability of our real estate earnings.”

In its regulatory filing, JG Summit said that its top line for the three-month period increased by 28% to P82.3 billion as revenues of its air transport business tripled and the growth momentum of its food and property units.

It also cited “sizable increases” in its equity earnings from Manila Electric Co. (Meralco) and its dividends from PLDT Inc.

Its food business Universal Robina Corp. (URC) booked a net income of P3.4 billion, while its operating income for the quarter went up by 15% to P4.7 billion due to price adjustments, easing commodity prices, and better management of operating expenses.

Its revenues for the period grew by 11% to P39.8 billion on the back of strong growth from all its business segments.

Robinsons Land Corp. (RLC) posted a 92.9% increase in net income to P2.7 billion from P1.4 billion driven by the operating earnings of its mall and residential division, and the profitability of its hotel unit.

The company’s revenues for the quarter grew by 38% to P8.9 billion due to higher foot traffic and retail spending in malls, larger contributions from residential projects, higher bookings in hotels, and the steady growth of the office segment.

Cebu Air, Inc. (CEB) returned to profitability with a P1.1-billion income versus the P7.6-billion net loss incurred a year earlier.

System-wide revenues tripled to P20.9 billion with the recovery of its core passenger business and ancillary businesses.

“By the second quarter, [Cebu Air] expects to reach pre pandemic system wide capacity driven by the continuous recovery of the tourism industry and the strengthened operations of Clark and Cebu hubs, the company said.

Petrochemicals business JG Summit Olefins Corp. managed to trim its net loss to P2.7 billion due to effective cost control. Its revenues declined by 30% to P8.7 billion due to lower sales volumes and weaker selling prices, cushioned by its sustained liquefied petroleum gas trading operations.

Robinsons Bank Corp.’s net income stood at P400 million, with its net interest income at P1.8 billion as the re-pricing of its loan portfolio lagged behind the rapid rise in funding costs. Its total loans rose by 12% to P110.8 billion, led by its consumer lending book. Revenues rose by 34% to P3.2 billion, boosted by an increase in its fee income.

“The bank continues to work on securing regulatory approvals for its merger with Bank of the Philippine Islands,” it added.

“We are also seeing inflation easing out, and this should further result to margin recovery across our portfolio. We are continuing to invest for growth with our planned capital expenditure (capex) program in place such as new aircraft deliveries for CEB, land banking and development projects for RLC, and capacity additions for URC, to name a few,” Mr. Gokongwei added.

“This appetite to invest supports our belief that demand will continue to be robust for the balance of the year and onwards,” he said.

Shares for JG Summit fell by 0.99% or 0.5 centavos to P49.9 apiece, on Monday — Adrian H. Halili

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