JG Summit posts strong growth

JG Summit Holdings Inc., the umbrella firm for the business interests of the Gokongwei family, expects to stay on solid financial footing this year, driven by the continued growth of its core units in the food, property and utilities sectors.

In a briefing, JG Summit president and COO Lance Gokongwei said their full-year earnings could reach between P2.8 billion to P3 billion, or as much as 30 percent more than the P2.31-billion net income in 2001.

This is on the back of an estimated 11-percent surge in consolidated revenues to P49 billion, up from P44 billion the past year, as the group’s major units continue to post positive results.

Gokongwei said despite the difficult business environment, JG Summit managed good operating results due to "the growth of our international and domestic branded food business, our strong competitive position in the fixed line telecoms, and the resilient growth of our malls despite sluggish consumer spending."

In the first half of this year, JG Summit registered a slightly higher net income of P1.51 billion, from P1.49 billion in the same period last year, as revenues reached P23.4 billion or 21 percent higher. However, with the non-recurring loss of P200 million from the sale of its 20-percent stake in Cebu-based power firm Toledo Power Corp. last April, the group’s net income dropped to P1.31 billion.

Snack food giant Universal Robina Corp. (URC), the group’s flagship, remained the main revenue and income source, contributing P10.3 billion and P719 million, respectively. Other income drivers are property arm Robinsons Land Corp., telecom unit Digital Telecommunications Philippines Inc. and air transport firm Cebu Pacific.

Gokongwei attributed their solid performance to the steady growth of the food business’ international operations and more aggressive domestic market positioning; higher mall revenues; and better operational efficiency, cutting costs in its telecoms venture.

The group’s textile and petrochem businesses, meanwhile succumbed to a combination of slow demand, reduced margins and increasing utility costs, which resulted in losses for the period. – Conrado Diaz Jr.