By Arra B. Francia, Reporter
HIGHER FUEL PRICES in its airline business alongside foreign exchange losses pulled down JG Summit Holdings, Inc.’s earnings attributable to the parent in the first nine months of 2017.
The holding firm of tycoon John L. Gokongwei, Jr. saw its net income attributable to the parent drop by 7.9% in the January to September period to P21.24 billion, despite a 14% rise in revenues to P202.64 billion.
The company attributed the slowdown to its airline business through Cebu Air, Inc. (Cebu Pacific), which suffered a 38.3% decline in earnings for the period.
“(The decrease) was primarily due to the lower net income of our airline business which was affected by the rise in fuel prices, as well as some mark-to-market hedging losses for the nine months of the year as compared to hedging gains for the same period last year,” the company said.
Cebu Pacific saw its revenues rise 7.8% to P50.33 billion during the nine-month period, as passenger volume hit 14.87 million, a 2.7% year-on-year increase. The company was also able to increase the number of flights by 3.5% due to six additional aircrafts by the end of September, now at 62 carriers.
Cargo revenues meanwhile grew by 29% to P3.29 billion with more volume of cargo being delivered by the airline for the period.
This single-digit increase in revenues however failed to offset the 15.7% rise in operating expenses, as fuel prices and the acquisition of new aircraft pushed up expenses.
The weaker peso further affected JG Summit’s bottom line, as it recorded a foreign exchange loss of P1.08 billion from Cebu Pacific’s operations.
JG Summit’s food and beverage business under Universal Robina Corp. (URC) also reported lower earnings attributable to the parent for the period, down 21.8% to P8.21 billion. The decline was also due to foreign exchange losses and lower operating income, offsetting the 13.1% sales growth to P92.42 billion.
URC operates in three divisions, through the branded consumer foods segment, the agro-industrial segment, and the commodity foods segment.
The petrochemicals group, composed of JG Summit Petrochemicals Corp. and JG Summit Olefins Corp., improved its earnings to P4.97 billion during the period, higher by 24.3% year on year. This comes from a 45.2% climb in revenues to P30.54 billion, with volume of polymers during the period increasing to 375,497 metric tons in the nine-month period.
Robinsons Land Corp., JG Summit’s property business, delivered an attributable profit of P4.57 billion, slightly lower than the P4.5 billion in the same period in 2016. The flattish results came despite a 5% growth in its commercial business to P7.82 billion. The commercial segment accounted for 47% of RLC’s revenues, followed by residential at 31% or P5.06 billion, office buildings at 14% or P2.39 billion, and hotels at 8% or P1.37 billion.
This brought RLC’s consolidated revenues to P16.64 billion during the nine-month period.
The banking segment of JG Summit, Robinsons Bank Corp., booked P238.65 million in earnings for the January to September period, up 9.4%, following a 28.8% rise in banking revenues to P3.24 billion.
Higher interest income, commission income and trading gains lifted the bank’s revenues for the period, according to the company.