JG Summit income surges with better airline, food revenues

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Metro Manila (CNN Philippines, May 15) — JG Summit Holdings, Inc. booked ₱7.4 billion in consolidated net income in the first quarter, with better yields drawn from their food and airline businesses.

In a disclosure, the listed firm said profits rose by 54 percent from the ₱4.8 billion it made during the first three months of 2018.

"We are also benefiting from a more favorable macroeconomic environment with better consumer sentiment driving the growth of our core businesses in food, real estate and airline,” JG Summit President and Chief Executive Officer Lance Gokongwei said.

Total revenues of the Gokongwei-led conglomerate rose by a tenth to ₱76.3 billion year-on-year, while core earnings grew by 28 percent.

Cebu Air, Inc. realized a ₱3.4-billion net income during the quarter, more than double from a year ago amid "operational efficiencies" that kept aircraft and traffic servicing costs at a muted increase. Fuel hedging gains as well as lower foreign exchange losses also padded the airline's bottomline.

The budget airline rode on a 15 percent increase in passenger revenues as they flew more commuters by using larger planes and charged higher fares on average. Cargo shipping also saw a 13 percent lift as the airline carried more shipments for steeper rates, while revenues from non-ticket charges also rose by 23 percent.

READ: Cebu Pacific cancels flights due to 'disruption' in operations

JG Summit's food production arm Universal Robina Corp. (URC) also enjoyed a three percent lift in its net income to ₱3 billion. Total sales grew by nine percent to ₱33.3 billion but was partly offset by lower foreign exchange gains and higher borrowing costs.

In particular, URC said the rebound of coffee sales through new white coffee variants of their Great Taste brand propped up their bottom line, alongside rising prices and sales for sugar, flour and feeds products. However, URC's gains from local sales were partly offset by weaker sales from operations in Thailand and Australia.

The holding firm's property arm Robinsons Land Corp. likewise saw profits climb by a fifth to ₱1.8 billion, lifted by rental fees collected from malls, office space and hotels.

These gains more than covered for the ₱700 million net loss incurred by JG Petrochemicals Group, which reeled from a 12 percent decline in average selling prices for its products.

Meanwhile, Robinsons Bank Corp. saw net income slashed by 58 percent to just ₱42.5 million in January-March, as rising interest rates led to higher deposit expenses and a bigger bills payable. 

On the other hand, JG Summit realized ₱2.7 billion through equity earnings, or profits from associated companies and joint ventures with other businesses. The diversified conglomerate reported higher earnings from the Manila Electric Co. and the United Industrial Corp., as well as dividends from listed firm PLDT Inc. 

Shares at JG Summit ended at ₱59.80 after Wednesday's morning trading, up 0.5 percent from the previous day.