JG Summit Holdings Inc., the flagship holding firm of the Gokongwei group, announced a 16 percent increase in attributable net income in the first nine months to P17.9 billion from P15.37 billion in the same period last year. Revenue also grew 10 percent reaching P277 billion, driven by strong demand in travel and leisure, a growing preference for value food and beverage products, and higher utilization at its petrochemical plants.
Despite these gains, the company faces challenges from higher inflation, which continues to dent profit margins. “While the overall macro environment is expected to rebound with easing inflation, most of our businesses are still affected by weaker consumer sentiment that has dampened demand for products and services,” said Lance Y. Gokongwei, president and CEO of JG Summit.
Gokongwei further noted that while consumer trends favored more affordable food and beverage options, challenges in the travel sector and continued downturn in the global petrochemical market weighed heavily on the group’s performance. “We expect a better fourth quarter to finish the year on a strong note, which will lay the foundation for further growth and margin improvement across our businesses,” he said.
In the third quarter alone, JG Summit’s consolidated revenue remained flat at P89.1 billion compared to P87.94 billion last year. However, net income dropped 38 percent to P3.1 billion, down from P4.99 billion, mainly due to larger losses from JG Summit Olefins Corp. (JGSOC) as a result of the ongoing downturn in the global petrochemical industry. Other contributing factors included lower sugar profits from Universal Robina Corp. due to price corrections and reduced average fares from Cebu Air Inc. to boost demand in the typically weaker aviation quarter.
In addition, JG Summit reported widening net losses of P11.4 billion for the nine-month period, the result of continued challenges in the petrochemical sector. Despite this, the company emphasized its focus on transformation initiatives to navigate the tough market conditions. These initiatives include targeted account management, selective export market strategies, improved pricing governance, and reliability programs.
On a more positive note, the group’s stake in Singapore Land Group (SLG) saw equity earnings increase by 15 percent, reaching P1.3 billion, bolstered by strong performance in SLG’s hotel business and rental income growth. Meanwhile, dividends from PLDT Inc. declined by 11 percent to P2.3 billion, primarily due to the absence of special dividends, though regular dividend payouts increased.
Looking ahead, JG Summit is optimistic about the merger between BPI and Robinsons Bank, which took effect at the beginning of 2024. The merger resulted in JG Summit receiving P373 million in cash dividends from BPI, helping offset the decline in PLDT dividends.
Despite ongoing challenges, JG Summit remains focused on strengthening its businesses and positioning itself for future growth as global economic conditions gradually improve.
