Cebu Pacific rebound fuels JG Summit profit

JG Summit Holdings Inc. saw its core net income more than triple to P19.6 billion in 2023 from P6.2 billion a year before as a resurgence in both domestic and international tourism fueled a rebound in its airline business.

Including more favorable foreign exchange and mark-to-market adjustments, net income would have ballooned to P20.2 billion from P700 million, the conglomerate said in a statement on Tuesday.

Consolidated revenues grew 14 percent year on year to P343.8 billion, driven by the first full-year profitability of its budget airline, Cebu Pacific, since the pandemic as well as broad-based growth in real estate.

Lance Gokongwei, JG Summit president and CEO, said the two segments gained from “fully lifted mobility restrictions” despite a “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,” he added.

Looking ahead, Gokongwei said JG Summit was aiming to bring core earnings closer to prepandemic record levels in the next 12 months.

“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.”

Cebu Air Inc., operating as Cebu Pacific, earned P7.9 billion last year, finally ending a three-year string of losses blamed on the pandemic. The airline previously booked losses of P14 billion, P24.9 billion, and P22.2 billion in 2022, 2021, and 2020, respectively.

Airline revenues were up 60 percent year on year to P90.6 billion, with a 20.8-million passenger volume and a 30-percent increase in flights amid enhanced operational efficiency and sustained capacity growth.

As of end-2023, Cebu Pacific’s fleet of 85 aircraft operated in 60 destinations across 108 routes, with more than 2,700 weekly flights.

In the real estate segment, Robinsons Land Corp. notched an “alltime high” attributable net income of P12.1 billion, up 24 percent from P9.7 billion in 2022, but consolidated revenues dropped by 10 percent to P39 billion.

JG Summit said its food business, Universal Robina Corp. (URC), saw earnings fall 13 percent to P12.2 billion despite a 6-percent growth in revenues to P158.4 billion. It said this was mainly due to a one-off gain recognized on a sale of land in 2022 plus unfavorable year on year foreign exchange movements.

As for petrochemicals, JG Summit Olefins Corp. (JGSOC) trimmed its losses to P12.9 billion as it started to recognize as expenses the interest on “projectrelated debt and depreciation on the newly completed plants.”

JGSOC, which resumed its plant operations last June after being shut down in early 2023, ended the year with a 19-percent growth in sales volume and a 6-percent rise in revenues to P38 billion.

In core investments, the conglomerate’s share in Manila Electric Co.’s income climbed by 26 percent to P9.8 billion, due to higher gains from the power generation and retail electricity businesses, aided by sustained growth in the distribution segment.

Equity earnings from Singapore Land Group, however, shrank to P2.5 billion from P3 billion, while dividends from telecommunications giant PLDT Inc. slipped by 8 percent to P2.6 billion.

JG Summit shares closed up 1.41 percent to P35.95 each on Tuesday amid a 0.66-percent gain for the benchmark Philippine Stock Exchange index.