JG Summit Holdings, Inc. slumped back into the red in the third quarter, as its businesses were affected by the reimposed strict lockdowns and higher costs.
In a regulatory filing, the Gokongwei-led conglomerate reported a P3.38-billion net loss attributable to equity holders of the parent company in the July to September period, a reversal of the P844.1 million income a year ago.
However, revenues grew by 9% to P50.41 billion in the third quarter.
“Amid the reimplementation of stricter lockdown given the Delta variant, the company’s pace of recovery decelerated from a 24% year-on-year registered growth in 2Q21, which came from a low base given the onset of the pandemic last year,” the company said in a separate statement.
JG Summit said “record-breaking cost inflation” affected Cebu Air, Inc., JG Summit Petrochemicals Group (JGSPG), and Universal Robina Corp. (URC), which led to narrower margins in the third quarter.
“Our margins will be affected by inflationary pressures driven by higher oil and input prices as well as the devaluation of the peso. Our plan is to manage these headwinds through better pricing and cost management measures,” Lance Y. Gokongwei, president and chief executive officer of JG Summit, said in the statement.
In the first nine months, JG Summit reported a net loss of P2.44 billion, a reversal of the P123.85-million attributable income a year ago.
Year-to-date, JG Summit’s consolidated revenues grew by 9% to P167.9 billion.
“The topline growth was mainly driven by expanded capacity and improved utilization rates of its petrochemical plants, the contribution from its Chengdu real estate project, higher earnings from its core investments in Meralco and PLDT, and the resilient topline of its food, banking, and office segments,” the company said.
It noted all subsidiaries recorded growth except for Cebu Air, which operates budget carrier Cebu Pacific. Commercial passenger flights remained limited for most of the nine-month period.
URC ended the nine-month period with a 40% increase in net income to P10.5 billion due to the sale of “idle land” and the impact of the government’s corporate tax incentives. Meanwhile, its revenues inched up by 1% to P85.8 billion, driven by sales from its international segment and the commodities group.
Robinsons Land Corp.’s (RLC) income surged 44% to P6.3 billion, thanks to a 39% rise in revenues to P30.1 billion.
Meanwhile, Cebu Air incurred a net loss of P22 billion due to soaring fuel prices, increased expenses on maintenance, higher interest and accretion expense worth P1.8 billion. It also incurred a P1.8-billion foreign exchange loss.
JGSPG, meanwhile, narrowed its net loss to P423 million in the first nine months from last year’s P1.9 billion as revenues surged 88% to P27.2 billion.
Robinsons Bank Corp. saw a 20% increase in net income to P942 million, while revenues “remained stable” at P6.9 billion.
Meanwhile, for its core investments, JG Summit said its equity earnings in Manila Electric Co. amounted to P4.7 billion, P1 billion from equity net earnings in Singapore Land Group. PLDT, Inc. also increased its dividends to P82 per share, letting JG Summit receive a total of P2 billion in dividends.
“Although [the third quarter] presented challenges to some of our subsidiaries, we have seen green shoots in the market and recovery in consumer demand for products and services as vaccination rollouts accelerate and mobility restrictions ease starting November,” Mr. Gokongwei said.
“We anticipate these developments to positively impact our airline, hotels, malls, and food segments,” he added.
Mr. Gokongwei added that JG Summit “remains optimistic” on the developments and trusts that the company’s diversified portfolio will lead its recovery in 2022 and its pre-pandemic levels by 2023.
Shares of JG Summit on Friday rose 1.61% or 95 centavos to close at P60 apiece. — Keren Concepcion G. Valmonte