JG Summit profit down by 37% in first half

MANILA, Philippines — JG Summit Holdings Inc. saw its first-half core net income fall 37 percent to P13 billion as higher fuel prices and a weaker peso weighed heavily on its airline business.

On Wednesday, the Gokongwei-led conglomerate said the decline came despite strong property performance, improved margins in branded food and higher contributions from its core investments.

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The group also booked higher interest expenses at the parent level after absorbing debt from its petrochemical subsidiary.

Consolidated revenues, however, grew 7 percent to P200 billion. This was driven by broad-based growth in real estate, resilient expansion in branded food and animal nutrition and higher passenger volumes at its airline.

JG Summit said revenue growth across its strategic business units slowed in the second quarter as elevated fuel prices and foreign exchange pressures prompted consumers to reprioritize spending.

Including non-core unrealized foreign exchange losses from the peso’s depreciation, net income from continuing operations plunged 47 percent to P11.4 billion.

Total net income, including discontinued operations, fell at a slower pace of 29 percent to P10.7 billion as losses from its discontinued petrochemical operations narrowed.

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READ: JG Summit core profit slid 8% in first quarter

JG Summit president and CEO Lance Gokongwei warned that earnings pressures could persist for the rest of the year, particularly for its airline.

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“For the balance of the year, we anticipate profitability challenges to persist, particularly for our airline, considering fuel prices that remain elevated and the leaner travel season this third quarter,” Gokongwei said.

He added that inflationary pressures were creating further uncertainty over consumer spending and near-term revenue growth.

Cebu Air Inc., operator of Cebu Pacific, booked a P5.9-billion first-half net loss as higher fuel prices, fleet-related financing costs and unrealized foreign exchange losses battered earnings. INQ