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.
Shares in JG Summit picked up 0.69% or 40 centavos to close at P58.50 each at the stock exchange on Friday. — Arra B. Francia
