Bilyonaryo - Business

Gokongwei-led JG Summit takes hit from peso devaluation, profit plummets in 2022

March 29, 2023

Bilyonaryo.com

The Gokongwei conglomerate, JG Summit Holdings Inc., saw a significant plunge in earnings last year to P700 million, largely due to the impact of its US dollar-denominated debt amid the devaluation of the peso.

This marked a notable drop from the P5.1 billion net income reported in 2021, which included gains and contributions from the food manufacturing arm’s discontinued Oceania operations. Despite this, the company’s core net income doubled to P6.2 billion last year.

JG Summit’s consumer-facing businesses experienced double-digit topline growth, driving revenues to a record high of P312.4 billion.

The company’s strong revenue performance and cost-saving programs led to significant profit improvements in most of its strategic business units, despite the margin pressures from unprecedented fuel and commodity prices.

JG Summit president and CEO Lance Gokongwei attributed the strong demand for the company’s products and services to the surge in consumption, driven by the reopening economy and lifting of most mobility restrictions.

He also acknowledged the volatility brought about by the weaker peso and higher prices of oil and soft commodities.

Looking ahead, Gokongwei remains cautiously optimistic about the company’s prospects for this year, citing lingering geopolitical and global economic risks.

However, he expressed hope that domestic consumption will remain buoyant, especially as inflation is projected to slowly ease out on a sequential basis.

The company also expects to benefit from the reopening of China in its airline and petrochemicals businesses.

Related News Tags: Gokongwei, JG Summit Holdings Inc., profit

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