JG Summit earnings plummet 94% as pandemic hit continues | Bilyonaryo Business News

JG Summit earnings plummet 94% as pandemic hit continues

The Gokongwei family’s JG Summit Holdings Inc. said its first quarter profit dived 94% to P122.18 million as most of its businesses continued to be pummelled by the pandemic.

The lower income was also due to forex losses on the company’s US-dollar bond.

Revenues slightly fell to P67.6 billion. The improved utilization of the group’s petrochemical plants, the contribution from its Chengdu real estate project, and the resilient topline performance of its food and banking segments offset the massive drop in its air transport revenues.

Cebu Pacific saw its losses balloon to P7.3 billion as it contends with new travel restrictions and travel bans owing to the coronavirus outbreak.

Excluding airline, JG Summit’s earnings and core profit would have jumped 18% and 88% to P5.4 billion, largely driven by improvements in its food and peteochemical manufacturing operations, forex & mark-to-market movements as well
as well as some benefits from CREATE law. These also include minimal gains from the sale of its 30% stake in Global Business Power Corp. GBPC).

JG Summit booked a P261.9 million net gain on th sale of its GBPC stake.

On a positive note, JG Summit continues to see sustained quarter-on-quarter improvements in airline, malls and hotels.

The holding firm also recognized higher earnings from its core investments in Meralco and PLDT.

JG Summit’s financing costs and other charges rose by 4.6% to P2.1 billion this year due to higher level of financing debt and lower interest rates during the period.

“It has been more than a year since the pandemic has begun disrupting the global economy and our business/operations. We continue to cautiously navigate this very turbulent environment leveraging on the strengths of our diversified portfolio and our balance sheet,” said Lance Gokongwei, president of JG Summit.

“While we remain optimistic about the long term prospects of the group in a post COVID world, we are realistic with our view that short term volatility will continue to persist. Although we have seen sequential improvement in our business results in the last 2-3 quarters, the implementation of a stricter lockdown in the NCR+ bubble which impeded mobility is like a reset once again.

We expect though that the headwinds will start dissipating once the vaccine rollout is accelerated but surmise that the shape of the recovery will vary across industries in our portfolio,” he said.

Gokongwei said they would continue to focus on the execution of their recovery game plan to emerge even stronger from the Covid-19 crisis.

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