JG Summit posts P720 million loss in H1

MANILA, Philippines — Gokongwei-owned conglomerate JG Summit Holdings Inc. incurred a first half net loss of P720 million, a hard landing from a net income of P17.4 billion a year ago.

In the second quarter, the company reported a net loss of P2.6 billion compared to a P10.9 billion income a year ago.

JG Summit president and chief executive officer Lance Gokongwei said the coronavirus disease 2019 or COVID-19 pandemic has disrupted the many businesses of the conglomerate, which include budget airline operator Cebu Air, property developer Robinsons Land Corp., banking arm Robinsons Bank, food group Universal Robina Corp. and  petrochemicals unit JG Summit Petrochemicals Group.

“We have experienced the more pronounced impact of COVID-19 on our businesses in the recent quarter with the implementation of the stricter lockdown and quarantine protocols nationwide,” he said.

“This continued to disrupt our operations, supply chain and customers with flight restrictions in our airline, limited operations of our petrochemical customers, and  temporary closures in some of our malls and hotels. While some businesses were heavily disrupted, we are fortunate that we have a diversified portfolio that cushioned the impact with strong profits coming from food, banking and core investments in telecoms.”

Amid this challenging environment, Gokongwei said the short-term focus would be on the health and welfare of employees, the continuity of operations, management of liquidity and costs, and support for the communities where the company operates.

“With the strength of our balance sheet coupled with our organizational capabilities to quickly adapt to the new normal and respond to changing consumer needs, I am confident in our ability to compete and take advantage of emerging opportunities ahead,” he said.

Consolidated revenue declined 26 percent to P116.5 billion while second quarter revenue declined to P48.6 billion from P83.2 billion a year ago.

The significant growth in Robinsons Bank, low single digit topline growth of Robinsons Land and Universal Robina Corp (URC) and higher dividends from PLDT tempered the negative impact of the pandemic on the company’s overall operating results.

Among the different businesses, Cebu Air continued to be impacted by the flight restrictions particularly with the onset of the enhanced community quarantine last March 15.

Cebu Air posted a net loss of P9.1 billion in the first half due to lower passenger volumes coupled with hedging loss.

Excluding Cebu Air, which operates in one the most affected industries globally, JG Summit’s revenues, core net income after tax and net income would have only declined 13 percent, 26 percent, and 56 percent to P99.2 billion, P6.5 billion and P5.5 billion, respectively in the first half of 2020,’ JG Summit said in a filing.