JG Summit FY23 profit: P19.6-B (up 216%)

JG Summit [JGS 35.95, up 1.4%; 93% avgVol] [link], the Gokongwei Family’s diversified conglomerate, teased its FY23 financial results headlined by a 216% increase in the company’s net income to P19.6 billion. JGS reported full-year revenues were up 14% to P343.8 billion, which it attributed to the “first full year of unrestricted travel demand” and “broad-based growth in its real estate sales unit”. The company’s FY23 performance was all the more impressive considering the huge P3.2 billion one-off gain it recognized in FY22 on the sale of its Meralco [MER 361.00, up 0.2%; 56% avgVol] shares. On a segmented basis, Universal Robina [URC 103.80, up 0.7%; 63% avgVol] posted a net income decline of 13% to P12.2 billion, Robinsons Land [RLC 16.68, up 0.7%; 20% avgVol] posted a net income increase of 24% to P12.1 billion, Cebu Pacific [CEB 31.00 unch; 167% avgVol] posted a net income increase of 156% to P7.9 billion, and JG Summit Olefins posted a 13% improvement to narrow its net loss to P12.9 billion.

 

MB bottom-line: CEB and Olefins, the twin knees-on-the-neck of JGS shareholders, which together lost JGS nearly ?29 billion last year, have only combined to lose the company ?5 billion in FY23. While that’s a huge improvement, the Olefins business continues to generate substantial losses. JGS says that it completed a “robust diagnostics” of the Olefins business in December 2023, and identified “various line-owned and line-led initiatives” to drive “accelerated commercial excellence” and “disciplined operational excellence”. To me, that’s a word salad that isn’t up to the task of addressing the immensity of the ?12.9 billion net loss the business generated last year.

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