JG Summit Q1 core income down on higher costs

Gokongwei-led JG Summit Holdings Inc. on Wednesday reported a decline in its core net income for the first three months of the year, due to the absence of one-off gains and higher costs linked with the investments its airline, budget carrier Cebu Pacific, made to boost its fleet.

In a regulatory filing, JG Summit said its core profit declined to P4.4 billion from P12.6 billion, reflecting the absence of the P7.9-billion merger gains recorded in 2024 due to the merger of Robinsons Bank and the Bank of the Philippine Islands (BPI).

Excluding the merger gains and the losses from its petrochemical business, core net income fell 7% year-on-year to P8.0 billion, reflecting the costs taken by Cebu Pacific, which signed a P1.4-trillion aircraft purchase deal last year.

This comes as the petrochemicals unit JG Summit Olefins Corporation saw a stop in its production with the plant shutdown that started in January, bringing total revenues down 46% to P7.6 billion.

JG Summit’s food business Universal Robina Corp. (URC) saw a 7% revenue growth to P45.3 billion, bringing core profit up 5% to P3.9 billion. The real estate unit Robinsons Land Corp. (RLC) posted a 1% increase in its topline to P10.7 billion, bringing core profit to P6.3 billion.

Cebu Pacific, meanwhile, reported a 20% increase in revenues to P30.4 billion, but core income declined 60% to P0.7 billion, also due to the higher expenses.

“We continue to build on the momentum brought about by the strategic interventions we have implemented in the second half of last year,” JG Summit president and chief executive officer Lance Gokongwei said.

“We are hopeful that the encouraging trends we are seeing in improving consumer sentiment brought about by the tempering inflation coupled with the favorable forex and oil prices will help accelerate demand and translate to better topline growth and improving margins for the balance of the year,” he added.

Shares in JG Summit were last trading at P18.38 per share, down by P0.12 or 0.65% from Tuesday’s finish of P18.50.  — VBL, GMA Integrated News