JG Summit profit doubles in Q3

JG SUMMIT Holdings, Inc. improved its profitability further during the third quarter, as lower fuel prices continued to buoy its airline operations and expansion of petrochemical business.

In its quarterly report, the holding firm of the Gokongwei family booked P5.72 billion in net income attributable to its equity holders or more than double the P2.68 billion realized for the comparable 2015 period.

Year to date, JG Summit’s attributable net income jumped 44% to P23.25 billion from P16.11 billion. Earnings per share stood at P3.25 over the P2.25 recorded a year earlier.

“Increase is mainly due to the double- digit income growth in our airline business, which benefited from the drop in fuel prices and fuel hedging gains, and our Petrochemicals business, which expanded significantly since the start of its integrated operations in November 2014 coupled by the lower costs of naphtha feedstock sold during the period,” JG Summit said.

The company’s consolidated revenues increased 4.6% to P177.52 billion from P169.78 billion, reflecting the performance of its core subsidiaries Cebu Air, Inc., Robinsons Land Corp., JG Summit Petrochemicals Corp. ( JGSPC), JG Summit Olefins Corp. (JGSOC), Robinsons Bank Corp. and Universal Robina Corp. (URC) during the nine months.

Cebu Air’s revenues totaled P46.69 billion or 10.5% over last year’s P42.26 billion. The business benefitted from a 6% increase in passenger volume and 8.4% increase in average ancillary revenue per passenger.

The air transportation business netted P7.10 billion, almost double the P3.56 billion registered for the comparable nine months of 2015.

Robinsons Land, meanwhile, grew its revenues 15.2% to P16.81 billion from P14.60 billion on higher real estate sales and rental income from its four newest malls and office buildings. Its consolidated net income attributable to equity holders amounted to P4.81 billion, a 12.7% improvement from the year-ago level.

Aggregate revenues from JGSPC and JGSOC rose 8.2% to P21.03 billion from P19.44 billion. The growth stemmed from an increase in sales volume to 536,004 metric tons (MT) from 438,681 MT along with a 5.1% decrease in costs and expenses.

The petrochemical group’s net income more than tripled to P4 billion from P1.30 billion during the nine months ended September.

URC, meanwhile, booked P81.73 billion in revenues. This settled below the P82.04 billion generated a year earlier following a 2% decline in sales of branded consumer foods group to P66.78 billion from P68.28 billion and 12% drop in international sales to P22.48 billion from P25.52 billion.

Still, the food business managed to book an 11% year-on-year surge in net income attributable to equity holders to P10.50 billion from P9.46 billion.

In the banking sector, JG Summit generated P2.51 billion or 14.9% more revenues through Robinsons Bank. The increase was mainly attributed to a higher interest income recognized from finance receivables. Robinsons Bank posted a 72.7% jump in net earnings to P218.2 million from the P126.35 million registered a year earlier.

“Revenues from our core investments, however, declined this period compared to same period last year as dividend income received by the group dropped 29.4% from P2.82 billion last year to P1.99 billion this year mainly due to lower dividends declared by PLDT for the period,” JG Summit noted.

In the third quarter, another company controlled by the Gokongweis — Robinsons Retail Holdings, Inc. — grew its net income attributable to the parent’s equity holders 15.3% to P1.28 billion from P1.11 billion on a 17.8% increase in operating income.

For the nine months, Robinsons Retail netted P3.30 billion or 11.1% more than the P2.97 billion registered a year earlier.

Robinsons Retail’s earnings climbed 23.7% to P1.02 billion in the third quarter and 17.1% to P2.77 billion in the ninemonth period without taking into account interest, equitized net earnings from its 40% stake in Robinsons Bank and unrealized foreign exchange gains or losses.

In the third quarter, consolidated net sales expanded 16.2% to P25.48 billion from P21.94 billion, reflecting robust same store sales growth, sales contribution of new stores as well as sales from Savers Appliances and The Generics Pharmacy, which were acquired in September 2015 and May.

Net sales for the nine months reached P73.81 billion, up 16.6% from a year earlier. —