JG Summit ’23 income soars
JG Summit Holdings Inc., the holding firm of the Gokongwei Group, saw its attributable net income surge 31 times to P20.2 billion last year from the previous year’s P650.62 million due to the turnaround of its airline business.
Revenues rose 14 percent to P343.8 billion from the previous year’s P301.9 billion, due mainly due to the first full year of unrestricted travel demand coupled with the broad-based growth in its real estate unit and the steady improvement in its food and petrochemical sales.
Total revenues exclude Robinsons Bank Corp. in accordance with Philippine Financial Reporting Standards 5, given its merger with the Bank of the Philippine Islands. The merger became effective on January 1 this year, the company said.
“In 2023, we saw our airline and property businesses benefiting from fully lifted mobility restrictions while we carefully navigated the tough inflationary environment that affected demand and margins, especially for our food business. Our Petrochemical unit, however, still suffered from weaker overall demand but we are encouraged by the internal progress of our transformation program that ensures it remains competitive when the cycle turns,” company president and CEO Lance Y. Gokongwei said.
“As we look forward, easing inflation and the potential rate cuts would bode well for consumer demand and lower input prices. We hope to recover lost volume and market shares in our food business, sustain portfolio expansion in our real estate arm, increase capacity and short-haul recovery for our airline, and crystallize the financial gains from our petrochemical transformation program. These would allow us to bring our core profits closer to its pre-pandemic record levels within the next 12 months.”
Food group Universal Robina Corp. reported a core net income growth of 5 percent to P12 billion, but the one-off gain recognized on a sale of land in 2022 plus unfavorable foreign exchange movements resulted in the 13-percent decline in net income to P12.2 billion.
Airline Cebu Air Inc., which owns Cebu Pacific, reclaimed its first full-year profitability since the pandemic to P7.9 billion from a P14-billion loss in 2022.
Its revenues grew 60 percent to P90.6 billion, as it served over 20.8 million passengers and increased flights by 30 percent.
Higher fuel and fleet-related costs contributed to this increase, with the airline taking delivery of 18 new aircraft throughout the year to bolster operational resilience and sustain capacity growth.
Moreover, the airline’s investments in digitalization and customer-first initiatives were embedded within the operational expenses, reflecting its commitment to enhancing the passenger experience.
As of end-2023, the airline had a fleet of 85 aircraft and now operates in 60 destinations across 108 routes with over 2,700 weekly flights. It also increased flight frequencies and resumed routes flying from Manila and Cebu, and restarted operations in Clark.
JG Summit Olefins Corp., meanwhile, remained strained during the prolonged petrochemical cycle. It made the strategic decision to shut down the plant in early 2023 and began to resume operations in June.
It closed the year with a 19-percent growth and led revenues to expand by 6 percent to P38 billion amid lower petrochemical selling prices. Net losses also narrowed to P12.9 billion.
The group’s share in Manila Electric Co.’s earnings jumped 26 percent to P9.8 billion, while its equity income from Singapore Land Group fell to P2.5 billion, from P3 billion in the previous year.
This was due to the decrease in the contribution from its residential projects as most were substantially sold off by end-2022. However, these were partially offset by the recovery of the hospitality industry that led to better hotel operations.