JG SUMMIT Holdings, Inc. posted a 2.4% drop in net income attributable to equity holders of the parent company in the third quarter, dragged by lower revenues from its petrochemicals business and higher expenses.
In a regulatory filing, the holding company of the Gokongwei family reported its bottomline fell to P4.8 billion in the three months ending September, from P4.95 billion a year ago.
Third quarter consolidated revenues jumped 12% to P81.16 billion. The bulk came from its food business under Universal Robina Corp. (URC) which saw a 6% rise to P32.7 billion in revenues.
Air transportation business, through Cebu Air, rose 17% to P18.92 billion, while real estate and hotels, through Robinsons Land Corp. (RLC), soared 79% to P16.37 billion. The petrochemicals business’ revenues fell by 32% to P7.5 billion.
For the January to September period, JG Summit recorded a 50% increase in attributable income to P22.23 billion.
“Increase is mainly due to double-digit income growth in our airline and real estate businesses coupled by the foreign exchange translation gains and increase in equity in net earnings of associates particularly from United Industrial Corporation Limited (UIC),” the company said in a regulatory filing.
Revenues went up 11% to P239.6 billion as of end-September, driven by higher contributions from URC, Cebu Air and RLC.
URC’s revenues rose 5.8% to P99.78 billion, fueled by a 9% increase in branded consumer foods domestic sales and 42% higher sales from feeds business.
Cebu Air’s revenues jumped 18% to P63.62 billion, on a 10% growth in passenger volume and 7% rise in average fares.
For RLC, revenues surged 40% to P31.2 billion, thanks to the P8.84 billion contribution from the sale of condominium units from Phase 1 of a residential project in China.
JG Petrochemicals Group saw its revenues drop by 19% to P26.12 billion “primarily due to decrease in average selling prices and volumes sold for polyethylene (PE), polypropylene (PP), ethylene (C2), pygas and mixed C4 products.”
Robinsons Bank’s revenues rose 41% to P6 billion, driven by higher interest income, commission income and trading gains.
Cost of sales and services went up 12% to P54.09 billion in the third quarter, bringing the nine-month tally 7.4% higher to P153.35 billion “due to higher input costs of the food, real estate and airline businesses.”
JG Summit’s operating expenses increased by 9.9% P42.90 billion, mainly due to higher selling, general and administrative expenses of the airline business.
“The Group’s financing costs and other charges, net of interest income, increased by 28.9% to P7.21 billion this year from last year’s P5.59 billion due to higher level of financial debt of the Parent Company, airline, petrochemicals and real estate businesses, as well as the impact of PFRS 16 on interest expense,” JG Summit said.