JG Summit core profit soars in 2023

MANILA, Philippines — Core earnings of conglomerate JG Summit Holdings Inc. soared in 2023 following a significant turnaround in its airline business, with Cebu Pacific returning to full-year profit for the first time since the pandemic.

JG Summit’s core net income tripled to P19.6 billion in 2023 from P6.2 billion in 2022, driven primarily by Cebu Air Inc.’s reversal of the previous year’s P14 billion net loss to a P7.9 billion net income last year.

Aside from the airline rebound, the growth was fueled by expanding margins in its property and food businesses as well as tapering losses from its petrochemical unit.

Incorporating more favorable foreign exchange and mark-to-market adjustments, JG Summit said net income surged to P20.2 billion in 2023 from P700 million in the same period the previous year.

Revenues saw a 14 percent year-on-year jump to P343.8 billion, driven by the first full year of unrestricted travel demand coupled with the broad-based growth in its real estate unit and the steady improvement in its food and petrochemical sales.

“In 2023, we saw our airline and property businesses benefiting from fully lifted mobility restrictions while we carefully navigated the tough inflationary environment that affected demand and margins, especially for our food business,” JG Summit president and CEO Lance Gokongwei said.

According to JG Summit, Cebu Pacific’s efforts to recover capacity and efficiently serve the strong travel demand bore fruit as it reclaimed its first full-year profitability since the pandemic, with revenues also rising by 60 percent year-on-year to P90.6 billion.

Cebu Pacific served over 20.8 million passengers in 2023 as it increased flights by 30 percent year-on-year.

For its property business, Robinsons Land Corp. registered a 24-percent increase in net income to P12.1 billion in 2023 following strong performances of its malls, hotels and residential businesses.

Universal Robina Corp., meanwhile, saw a 13-percent decline in net income to P12.2 billion last year due to one-off gain recognized on a sale of land in 2022 plus unfavorable year-on-year foreign exchange movements.

“Our petrochemical unit, however, still suffered from weaker overall demand, but we are encouraged by the internal progress of our transformation program that ensures it remains competitive when the cycle turns,” Gokongwei said.

JG Summit Olefins Corp. narrowed its losses in 2023 to P12.9 billion as it started to recognize as expenses the interest on project-related debt and depreciation on the newly completed plants.

It also continued to focus on its business-wide transformation program, successfully completing the robust diagnostics in December last year.

Looking forward, Gokongwei said easing inflation and the potential rate cuts would bode well for consumer demand and lower input prices.

“We hope to recover lost volume and market shares in our food business, sustain portfolio expansion in our real estate arm, increase capacity and short-haul recovery for our airline, and crystallize the financial gains from our petrochemical transformation program,” Gokongwei said.

“These would allow us to bring our core profits closer to its pre-pandemic record levels within the next 12 months,” he said.