JG Summit posts 56% jump in Q1 net profit

Buoyed by the strong performance of its food, real estate and financial services businesses, the Gokongweis’ JG Summit Holdings Inc. reported a 56-percent jump in its first quarter net income this year to P920.83 million.

Excluding the non-recurring gain from the recovery in the value of its investments amounting to P241.6 million, JG Summit’s first quarter profits would have amounted to only P679.2 million or a 15 percent increase over the same period last year.

JG Summit said its consolidated revenues rose nine percent to P12.8 billion, largely due to the impressive performance of its petrochemicals business which contributed P1.42 billion to the group’s total revenues for the first quarter of 2003.

The food business pumped in P6.06 billion in revenues while air transportation chipped in P1.38 billion. Real estate and hotels, on the other hand, contributed P926.55 million to total revenues.

The Gokongwei-owned holding company said improved revenues in air transportation and textiles also contributed to the increase in revenues. However, these gains were partially reduced by the 16.7 percent drop in revenues from its telecommunications subsidiary, Digital Telecommunications Philippines Inc. (Digitel).

Operating expenses went up by 10.94 percent to P11.97 billion from P10.79 billion, largely due to Cebu Pacific Air’s expanded flight operations and the start of commercial operations of Digitel’s wireless service "Sun Cellular".

Interest and other financing charges, however, decreased by 25.9 percent to P1.01 billion due to the payment of the outstanding balance of $200 million global medium term note in May 2002.

As a result, net operating income fell 12.1 percent from P939.6 million to P825.6 million this year.

Flagship unit Universal Robina Corp. reported a 34.4 percent increase in its net income for the first half of its fiscal year to end on September 2003 to P966.04 million, as consolidated net sales and services amounted to P11.6 billion, reflecting a 12.8-percent growth over the same period last year.

The branded consumer foods business unit posted sales and services value growth of 15.4 percent to P8.97 billion compared to the same period last year. This was attributed to URC’s regional snack food revenue growth of 44 percent and the continued strength of the company’s products in core categories such as snacks, candy, chocolate and biscuit segments complemented by strong export.

Its real estate business, Robinsons Land Corp., posted a net income of P411.68 million reflecting a 54 percent increase over the previous year’s P267.7 million. Gross revenues went up by 17 percent to P1.94 billion from only P1.67 billion.

Weighed down by higher expenses attributable to the start-up costs of its wireless service and lower fixed line revenues, Digitel incurred a net loss for the first quarter this year of P173.6 million as against a net income of P44.91 million the previous year.

Fixed line revenues dropped to P1.13 billion from P1.45 billion, largely as a result of lower monthly recurring charges, domestic billed revenues, and international revenues. Data and Internet services revenues likewise decreased to P105.8 million from P108 million.

Sun Cellular, which was commercially launched only last March 29 registered an operating loss of P122 million.

Meanwhile, JG Petrochemicals Corp.’s losses were narrowed to P58.6 million compared with P286 million last year. This as the company nearly doubled its net sales from the previous year’s P778 million to this year’s P1.42 billion due higher sales volume and average selling price.

Despite improvement in revenues, JG Summit’s airline business — Cebu Air Inc. swung to a net loss in the first quarter this year of P80.9 million compared with the P94.4 million profit reported the same period in 2002. This was attributed to significantly higher costs and expenses. Operating revenues grew 16 percent to P1.38 billion from P1.19 billion last year.