JG Summit profit falls 21.6%, weighed down by fuel prices

JG Summit Holdings Inc., the flagship of the Gokongwei group, reported a 21.6 percent drop in consolidated core net income to 117.8 billion for the first nine months of 2018 from the 122.69 billion registered in the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm said core net income after taxes for the third quarter reached 15.5 billion, 19 percent lower than the same period last year.

“Our airline and petrochemical businesses continued to face margin pressures from higher fuel prices,” JG Summit said.

However, it noted that such year-on-year (YoY) decline had tapered relative to the 23 percent core net income drop in the first and second quarters this year.

“The improvement was mainly driven by Universal Robina Corporation’s (URC) recovering operating margins on the back of higher selling prices in its domestic Branded Consumer Foods (BCF PH) business, Vietnam recovery, and better cost management,” the firm said.

Also credited for the improvement is Robinsons Land Corporation’s (RLC) sustained double-digit growth, which was boosted by the gains from sale of land to its joint ventures with Shang Properties and Hong Kong Land in the third quarter of 2018.

“We are pleased to see pockets of growth in our third quarter 2018 results as our businesses continue to traverse a very challenging macro-economic and competitive environment,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said.

He noted that, “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.”