JG Summit posts 44% earnings hike

The Gokongwei-controlled JG Summit Holdings Inc. earned P1.486 billion in the first six months of 2001, a substantial 43.7 percent increase over the same period last year as its food, property and financial services units continue to post solid results.

Financial statements submitted to the Securities and Exchange Commission (SEC) showed consolidated revenues during the period reached P19.28 billion or 21.5 percent more than the P15.87 billion revenues in 2000.

JG Summit said revenue growth was also enhanced by the consolidation of its regional consumer branded food operations in Southeast Asia and China beginning April 2000, along with a substantial increase in feeds and flour sales.

For its anchor business, branded consumer food unit Universal Robina Corp., net income increased by nearly 18 percent to P750.6 million on higher sales of P9.2 billion, boosted by higher demand from its regional operations.

URC has a manufacturing and distribution presence in Southeast Asia and China of its branded snack food, mainly Jack & Jill brand. In the domestic market, URC also continued to maintain its leadership position in the core snack, candy, chocolate and biscuit categories. The company expects the branded consumer foods business to gain further through the second half of the fiscal year in anticipation of its new product launches.

Property arm Robinsons Land posted a 21.2 percent growth in net income in the six-month period to P514.1 million on gross revenues on P1.72 billion, an 18.6 percent improvement from last year as its real estate and hotel operations improved.

JG Summit’s profitability was also boosted by the turnaround of its textile business, Litton Mills, which registered net earnings of P63.1 million compared with a net loss of P12.1 million last year due mainly to increased sales volume and reduced production costs and operating expenses. Litton Mills is the country’s largest fabric producer with about 30 percent of Philippine denim production.

Airline unit Cebu Air Inc. or Cebu Pacific also turned in higher numbers as its net income soared to P197.6 million due to the noteworthy increase in load factor and passenger yield.

Robinsons Savings Bank generated net earnings of P28.6 million, a 60.5 percent jump from last year due to the growth in deposits, loans and total resources.

Even JG Summit’s once losing companies, Digital Telecommunications Inc. (Digitel) and JG Summit Petrochemicals Corp. (JGSPC) are making headway toward a reversal of operations.

Digitel has reported that its income grew 26 percent to P2.9 million, despite higher expenses accruing from its start-up information technology (IT) ventures, while JGSPC – the overall market leader among local makers of downstream petrochemicals polypropylene and polyethylene – managed to post a 9.5 percent increase in revenues to P1.93 billion.

JG Summit also has interests in other areas such as power generation, financial services and supplementary areas like electronics, printing and insurance brokerage.

As of March 31, 2001, JG Summit had consolidated assets of P131.11 billion. Its long-term debt, including current portion, has leveled off to P45.44 billion, decreasing slightly from end-2000’s P46.41 billion.