JG Summit reports ₱2.8-B net loss in Q1

JG Summit Holdings, Inc. (JGS), the flagship of the Gokongwei group, reported a net loss of ₱2.8 billion for the first quarter of 2022 from a net income of ₱526.52 million in the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm said it sustained its recovery momentum, growing its revenues for the first quarter of 2022 by 7 percent from ₱67.64 billion in the same period last year and 6 percent quarter-on-quarter (QoQ) as mobility restrictions eased.

“Topline growth was evident across all subsidiaries, except for Robinsons Land Corporation (RLC), whose strong recovery is masked by a high base that was boosted by its Chengdu Ban Bian Jie project revenues last year,” JG Summit said.

Excluding the effect of Chengdu, JGS’ total revenue growth would be 28 percent higher. It did not provide the gross revenue figure for the first quarter of 2022.

“While the reopening of the economy fueled significant improvements in topline and substantially trimmed Cebu Air Inc.'s core net losses, unprecedented volatility in oil and input prices weighed on the group’s margins, particularly in JG Summit Olefins Corporation (JGSOC),” JG Summit said.

It noted that, “As a result, JGS posted a consolidated core net loss of ₱689 million in the first quarter of 2022 versus a core net income of ₱232 million in the same period last year (SPLY).” Coupled with peso depreciation and mark-to- market losses, JGS ended the quarter with a net loss of ₱2.8 billion.

“For the first quarter of this year, we have seen that the reopening of the economy has positively impacted most of our subsidiaries, with our overall revenues exhibiting quarteron-quarter and year-on-year improvements,” JG Summit President and CEO Lance Gokongwei said.

However, he noted that, “market volatility with the increasing prices of oil and key input costs, coupled with peso depreciation have affected our profitability and we expect these to linger and put pressure on our margins.”

To mitigate these risks, Gokongwei said they are proactively managing pricing and product mix, and at the same time, implementing productivity initiatives and cost management measures.

Universal Robina Corporation’s revenues expanded by 22 percent YoY to ₱35.8 billion. Higher EBIT coupled with foreign exchange gains led to a 16 percent increase in net income to ₱3.5 billion.

RLC’s revenues and net income fell 61 percent and 51 percent to ₱6.4 billion and ₱1.4 billion, respectively, mainly due to the high base boosted by the lumpy contribution from Chengdu Phase 1 last year.

Excluding Chengdu and the deferred tax liability reversal due to the enactment of the CREATE law in 2021, revenues and net income expanded 6 percent and 4 percent YoY, respectively.

CEB’s first quarter 2022 revenues grew 148 percent YoY to ₱6.7 billion given continued travel demand recovery as COVID cases remain low in the Philippines.

The steep revenue growth offset fuel price increases and reduced core net loss to ₱5.1 billion from ₱7.5 billion last year.

However, a ₱2.2 billion unrealized mark-to-market losses were recognized due to the higher value of the underlying conversion option of CEB’s convertible bonds, in line with increase in CEB share price. This drove Net Loss to ₱7.6 billion.

JGSOC’s first quarter 2022 revenues increased 37 percent YoY to ₱12.4 billion, driven by increased polymer sales value as well as fresh contributions from Aromatics and Butadiene sales, as well as LPG trading. (James A. Loyola)