JG Summit bares 22% drop in net income

JG Summit Holdings Inc., the flagship firm of tycoon John Gokongwei Jr., reported a 21.9- percent drop in net income for January to September this year to P1.78 billion as gains from its food, property and airline businesses were offset by the continued losses of its petrochemicals unit and the drop in revenues of its telecommunications business.

In its report to the Securities and Exchange Commission, JG Summit said the non-recurring loss on the sale of its 20-percent stake in Toledo Power Corp. and certain equity securities of P202 million also contributed to the reduced bottomline. Without such a loss, JG Summit said net income would have amounted to P1.98 billion, 13 percent lower than the year ago figure of P2.28 billion.

Powered by the steady growth of its core businesses, consolidated revenues rose 12.5 percent to P35.18 billion from P31.28 billion last year.

The firm’s food business, through Universal Robina Corp. cornered the bulk of revenues, contributing close to P5 billion in sales or 13.6 percent higher than P4.4 billion last year.

The revenue growth, however, was particularly reduced by the increase in operating expenses from P8.86 billion to P9.51 billion owing to Cebu Air’s expanded flight operations and increased operating costs of the food business.

JG Summit said operating expenses in other subsidiaries have been reduced in line with the company’s policy of cost efficiency and effectiveness.

Interest and other financing charges went up 10.9 percent to P3.59 billion, largely due to the additional borrowings made during the period offset by the payment of the outstanding balance of the $200 million global medium term note in May 2002.

As a result, net operating income remained flat at P2.88 billion.

As for its telecommunications business, Digital Telecommunications Phils. Inc. ended the nine months of 2002 with a net income of P18.9 million or a 372.1-percent increase from P4 million the previous year.

Digitel’s operating revenues declined 5.5 percent to P4.37 billion from P4.62 billion as a result of lower international inpayment revenues brought about by lower inbound traffic.

On the other hand, the firm’s domestic inpayment revenues and higher line rental revenue increased, driven by the continuing growth in the number of telephone lines connected.