JG Summit’s Q1 income gets boost from P7.9-B merger gain

JG Summit Holdings, Inc. reported a 120% increase in its attributable net income for the first quarter, reaching P11 billion compared with P5 billion in 2023.

This growth was driven by the performances across the company’s food, real estate, and air transport units, JG Summit said in a statement on Wednesday.

First-quarter consolidated revenue rose by 18% to P96.7 billion, while core net income surged by over two times to P12.6 billion, JG Summit said.

JG Summit’s first-quarter core net income was also boosted by the P7.9-billion gain from the merger of the Bank of the Philippine Islands and Robinsons Bank that took effect at the start of 2024.

“We kicked off 2024 with sustained improvements across our businesses, seeing robust sales volumes in our petrochemical and food businesses, as well as strong demand for air travel, leisure, and hospitality services. Margins have been buoyed by a combination of volume growth, managed input costs, and operating leverage,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said.

“We have also begun seeing green shoots in our petrochemicals arm as value realization has begun for its commercial and operational initiatives,” he added.

The conglomerate’s food segment led by Universal Robina Corp. (URC) recorded a 21% increase in net income to P4.1 billion led by higher foreign exchange gains. Its revenue increased by 7% to P42.6 billion driven by growth in the branded consumer foods and agro-industrial and commodities divisions.

Robinsons Land Corp. (RLC) recorded a 53% increase in net income to P4.07 billion. Revenue rose by 18% to P10.5 billion.

“Looking at its operations, occupancy rate remained above industry average, being at 93% and 84% for malls and offices, respectively,” JG Summit said.

Cebu Air, Inc. (CEB) doubled its net income to P2.2 billion as revenue increased by 21.3% to P25.3 billion. The airline flew 5.5 million passengers during the period, up by 14%, due to travelers returning from the Christmas holidays, as well as trips taken during the Easter break and other festivals and events.

“The airline continued to work on expanding its capacity while improving operational resiliency by investing in additional fleet, leading CEB to have 17 more aircraft at the end of the first quarter versus the same period last year. As a result, on-time performance remained solid at 77% amidst the peak period and customer satisfaction measured by net promoter score improved year on year,” JG Summit said.

JG Summit Olefins Corp. (JGSOC) widened its net loss to P3.3 billion in the first quarter from P2.7 billion last year due to higher interest expense, depreciation on new facilities, and foreign exchange losses.

JGSOC’s revenues grew by 62% to P14.1 billion on better sales volumes across all segments, higher utilization rates, and improved asset reliability.

For its core investments, JG Summit recorded a 22% drop in its dividend income from PLDT, Inc. as no special dividends were declared in the first quarter. Regular dividends saw a P1 increase to P46 per share.

This was offset by the company’s equity earnings from Manila Electric Co., which grew 19% year on year. This was on the back of higher distribution sales volumes as well as better performance of its power generation, retail electricity supply, and non-power related businesses.

“Looking ahead, we continue to work on growing our airline’s capacity to serve the gradual uptick in demand, driving volume-based growth in our food and beverage business, sustaining the momentum in our property unit, and accelerating the transformation program of our petrochemicals arm,” Mr. Gokongwei said.

“We will also continue to support our ecosystem plays, which are on the path to attaining scale via customer acquisition and new product launches,” he added.

On Wednesday, JG Summit shares rose by 3.8% or P1.20 to P32.80 apiece. — Revin Mikhael D. Ochave