The drop was also attributed to higher operating costs in its airline business following recent fleet upgrades.
Stripping out both the one-time merger gain and losses from its shut-down petrochemical unit, adjusted core profit declined a milder 7 percent to P7.4 billion.
Excluding petrochemicals, total group revenues would have grown a stronger 10 percent, thanks to robust demand in travel, hotels, malls, and food products.
Management’s view
“We continue to build on the momentum brought about by the strategic interventions we have implemented in the second half of last year,” said JG Summit president and CEO Lance Gokongwei.
“This is evident across our core units in food, with its branded consumer foods business posting double digit volume growth, and airline, with strong passenger and cargo volumes in the recently concluded quarter,” he said.
“For our real estate arm, the investment portfolio consisting of malls, offices, hotels, and warehouses continues to counterbalance the weakness in the residential segment,” he added.
New growth engines
“Our new businesses in logistics and airport operations are now profit generating while we are seeing a very good trajectory for our digital bank to break-even in the near term,” Gokongwei said.
“Our decision to extend the shutdown of our petrochemical unit will also help reduce the drag on our profitability,” he added.
JG Summit maintains strong core
The company’s consumer goods arm, Universal Robina Corp., posted double-digit volume growth, while its airline business (Cebu Pacific) benefited from strong passenger and cargo numbers.
Despite these headwinds, JG Summit’s balance sheet remains solid, with a net debt-to-equity ratio of 0.53. The parent company expects to receive at least P11.2 billion in dividends in the second quarter, 13 percent more than the previous year.
