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.
Shares in JG Summit slumped 3.83% or P1.85 to close at P46.45 each. — Arra B. Francia