JG Summit earnings back in black in third quarter

MANILA, Philippines — Earnings of JG Summit Holdings Inc. returned to positive territory in the third quarter, becoming "cautiously optimistic" of future operations as consumer demand remained depressed amid the coronavirus pandemic.

In a disclosure to the stock exchange on Friday, the Gokongwei-led conglomerate reported a net income of P844 million from July to September, down 77% year-on-year but a reversal from P2.62 billion net loss incurred in the second quarter.

That was enough to bring year-to-date profits back in black. In 9 months, JG Summit netted P123.8 million in profits, down 99.4% annually but a turnaround from P720 million net loss in the first half.

"With the easing of restrictions, economic activity has slowly returned and our different business units showed some quarter on quarter recovery but I also note that these results are far from ideal and still showed steep declines versus a year ago," Lance Gokongwei, company president and chief executive, said.

"Weaker consumer sentiment will continue to affect demand for products and services in the near term thus we remain cautiously optimistic," Gokongwei added.

JG Summit closed the first quarters with consolidated revenues of P167.3 billion, down 27% on-year. Broken down, a resilient topline performance of the holding firm's food, banking and office businesses tempered annual declines in its airline, mall, hotel and petrochemical revenues.

Across company subsidiaries, snackmaker Universal Robina Corp. posted flat revenues amounting to P99 billion after weak demand at home offset higher sales abroad. 

On the other hand, 9-month revenue from Robinsons Land Corp. sagged 13% year-on-year, with double-digit growth in offices and warehouses tempered by significant declines in malls and hotels.

During the same period, revenue from JG Summit's banking unit — Robinsons Bank Corp. — grew 14% year-on-year to P6.9 billion on the back of a 14% loan growth, figures showed.

Meanwhile, a resumption in domestic and international flights helped narrow the net loss of Cebu Air, operator of budget carrier Cebu Pacific, to P5.5 billion in the third quarter. But with movements still limited, Cebu Pacific's 9-month topline fell 70% annually to P19.3 billion.

Lastly, JG Petrochemicals Group posted "positive earnings" in the third quarter, thanks to "improving plant utilization rates, rebound in market demand, as well as lower naphtha prices," the company said. But year-to-date, revenues stood at P14.5 billion, down 45% compared to the same period last year.

"We will focus on execution to build on and continue the momentum that have started in Q3," Gokongwei said. "The prospects of a vaccine likewise give us hope that this will unlock further acceleration and recovery towards the latter part of 2021,” he added.

On Friday, shares in JG Summit closed the week flat at P72 each.