Airline, food, petrochem drag down JG Summit’s 9-month profit
The listed investment arm of taipan John Gokongwei saw its net earnings plummet by 30 percent to P14.8 billion pulled down by the weak performance of its airline and petrochemicals units.
Cebu Pacific, Universal Robina Corp. and JG Petrochemicals continued to face margin pressures from higher fuel prices.
The depreciation of the peso against the US dollar as well as lower dividends received from the PLDT Group and increased input costs of core businesses also weighed on JG Summit’s profitability.
Consolidated revenues rose 7.3 percent to P217.5 billion largely due to gains in the property and banking businesses.
JG Summit booked a net foreign exchange loss of P3.94 billion or more than four times the P949.3 million loss incurred in the same period last year.
Company president and CEO lance Gokongwei, however, is still pleased with its financial results given the a tough business environment.
“We are pleased to see pockets of growth in our Q3 results as our businesses continue to traverse a very challenging macro-economic and competitive environment. JG Summit has a diversified portfolio with a combination of defensive and cyclical businesses. Our airline and petrochemical divisions are more susceptible to the volatility in oil prices and the weaker peso but the effect on earnings has been partly cushioned by our other core businesses in food, real estate and banking,” Gokongwei said.
“Given our long-term view, we plan to continue investing wisely for growth as well as transform/strengthen our organizational capabilities so we reap the benefits when the cycle turns more favorable,” he added.