JG Summit posts P7.4B net income in Q1, up 54%

Gokongwei-led JG Summit Holdings Inc. (JGS) saw its consolidated net income in the first quarter of 2019 surge 54% to P7.4 billion from the P4.8 billion year-on-year driven by robust growth of its food, air transport, and property businesses.

In a disclosure to the Philippine Stock Exchange, JGS said its consolidated revenue stood at P76.3 billion, up 9% from a year earlier.

The growth was primarily attributable to the recovery in Universal Robina Corp.’s  (URC) Philippines business on the back of new white coffee variants launched last January and strong performance of its agro-industrial and commodities divisions, the acceleration in Cebu Pacific’s topline performance due to the double-digit increase across all its revenue sources, the sustained growth momentum of both Robinsons Land Corporation (RLC) and Robinsons Bank Corporation (RBank), and higher equity earnings of United Industrial Corporation (UIC) and Meralco, coupled with higher dividends received from PLDT Inc., according to the company.

“Coming from a very challenging 2018, we are delighted to start the year stronger with the good execution of the strategic initiatives we have set in place. We are also benefitting from a more favorable macroeconomic environment with better consumer sentiment driving the growth of our core businesses in food, real estate and airline,” JG Summit president and chief executive officer Lance Gokongwei said. 

URC saw its sales grow by 9% to P33.3 billion mainly driven by the strong performance of most categories in branded consumer foods, which was up 10%.

RLC's net income grew faster at 19% resulting in P1.8 billion.

Cebu Pacific's net income surged 138% to P3.4 billion as a result of operational efficiencies with single-digit growth in expenses related to flying operations, as well as aircraft and traffic servicing costs.

These were further amplified by CEB’s fuel hedging gains and lower foreign exchange losses.

JG Petrochemicals Group (JG Petrochem), meanwhile, saw its revenues fall 8% to P9.6 billion as the 12% drop in average selling prices more than offset the 4% volume growth.

The lower selling prices were mainly due to the 9% decline in the market price of naphtha, as well as some oversupply in the market for pyrolysis gas.

RBank's gross revenues surged 40% to P4.3 billion on the back of a 24% loan growth and a 105-basis points improvement in average loan yields.

However, interest expense spiked 82% due to the 126-bp hike in average deposit costs and the additional interest from the bank’s bills payable. Operating expenses likewise increased 20%. Consequently, RBank’s net income fell 58% year-on-year to P42.5 million.

Equity in net earnings of associated companies and joint ventures for the period increased by 11% to P2.7 billion, primarily driven by the 7% and 37% increase in equity earnings of Meralco and UIC, respectively.

JGS also received dividends from PLDT which was higher by 29%. Conversely, Global Business Power’s equity earnings declined by 70% which partially tempered the growth of the company's total earnings from affiliates. —Ted Cordero/KG, GMA News