JG Summit income plunges 94% in Q1

MANILA, Philippines — JG Summit Holdings Inc. (JGS), the Gokongwei-owned conglomerate, recorded a net income of P100 million in the first quarter, down 94 percent from the previous year.

However, excluding Cebu Pacific, JG Summit posted a P5.1 billion first quarter income, up 88 percent from P2.7 billion a year ago.

JG Summit president and CEO Lance Gokongwei said it has been more than a year since the pandemic has begun disrupting the global economy and business operations.

“We continue to cautiously navigate this very turbulent environment leveraging on the strengths of our diversified portfolio and our balance sheet. Our food and banking segments remain stable, while businesses that were heavily impacted by the strict mobility restrictions and quarantine measures have shown sustained quarter-on-quarter recovery since the significant decline during the enhanced community quarantine last year,” Gokongwei said.

Revenues amounted to P67.6 billion for the first quarter, down 0.4 percent from P67.9 billion a year ago.

“The improved utilization of its petrochemical plants, the contribution from its Chengdu real estate project, and the resilient top-line performance of its food and banking segments offset the year-on-year decline in its air transport revenue,” JG Summit said in its filing.

It also noted that first quarter of 2020 was a relatively high base for some of JGS’ businesses as the enhanced community quarantine (ECQ) only started in mid-March of last year.

On a positive note, the company continues to see sustained quarter-on-quarter improvements in airline, malls and hotels.

The company recorded an expansion in its food and petrochemical manufacturing operations, favorable forex & mark-to-market movements, as well as some benefits from the CREATE law.

Minimal gains from the sale of its 30 percent stake in Global Business Power Corp. also contributed to the first quarter performance.

Last February, the company settled the P5.3 billion debt maturity and exercised its early redemption option for the remaining P126 million, originally due on 2024.

The company also infused P9.3 billion into Cebu Air Inc. through the latter’s successful P12.5-billion convertible preferred share issuance in the first quarter of 2021.

Gokongwei said the company would continue to focus on the execution of its recovery game plan.

“We believe that the group is well positioned to answer the shift in consumers’ needs and behaviors as well as the lasting shift to digital channels in a post COVID world.

Our digital and agile transformation continues to accelerate with the ultimate goal of driving innovation faster, improving the customer experience and enabling us to gain productivity in operations,” he said.