JG Summit Holdings Inc., the holding company of the Gokongwei family, on Thursday reported an 86 percent decline in income to P700 million last year no matter the double-digit growth in revenues that already surpassed pre-pandemic levels.
Its attributable income included the P6 billion gains and contributions from its discontinued food manufacturing arm’s Oceania operations.
Core income that include portfolio management gains the parent company realized from the sale of some of its Manila Electric Co. (Meralco) shares registered a two-fold increase to P6.2 billion.
Revenue rose 36 percent to P312.4 billion from 2021 revenues of only P230.55 billion, made possible by the reopening of the economy.
Its management have been proactive in protecting and preserving its margins through direct and indirect price adjustments and the implementation of cost savings and productivity initiatives across its different business units.
“We experienced a surge in consumption which drove the strong demand for our products and services across our food, real estate and airline businesses. The demand was sustained throughout the year. This against the backdrop of significant inflation — with the volatility driven by the weaker peso and higher prices of oil and soft commodities.”
JG Summit president and CEO Lance Gokongwei
“We continue to remain cautiously optimistic in 2023 given the lingering geopolitical and global economic risk. With inflation forecasted to slowly ease out on a sequential basis, we are hopeful that domestic consumption will remain buoyant while we expect to benefit from the reopening of China in our airline and petrochemicals businesses,” Gokongwei said.
According to JG Summit, the group’s cost-saving measures translated to significant profit improvements evident in its airline Cebu Air Inc. which also benefitted from eased travel restrictions.
Its petrochemical unit’s new product lines also cushioned the adverse impact of subdued global industrial demand. JG Summit Olefins Corp. implemented a three-month facility shutdown in mid-2022 along with other petrochemical players in the region on the subdued global demand, with China’s borders being closed.
Contributions from its recently commissioned aromatics and butadiene extraction units cushioned the 11 percent decline in total revenue of P35.9 billion. The business ended 2022 with a P14.9 billion net loss.
Peak Fuel, the group’s LPG trading unit, also provided an additional revenue stream and continued to expand.
Its newly-completed PE3 plant should also allow the enterprise to seize opportunities and capture value through more innovative product offerings, the company said.
The company’s share in Meralco’s earnings totaled P7.8 billion, as the company registered higher profits from its Singapore power generation unit and larger sales volumes from its domestic energy distribution business.
The group also received higher dividends from PLDT Inc. amounting to P2.8 billion or 43 percent more than the year before.
For Singapore Land Group, the surge in hotel revenues, higher residential property sales and a larger share in the profits of its associates and joint ventures outpaced the slight decline in its leasing business.
As a result, equity earnings contribution to the company totaled P3 billion, 10 percent higher than in 2021.
