JG SUMMIT Holdings, Inc. reported a 27% decline in first-quarter (Q1) net income from continuing operations to P5.5 billion, as foreign exchange (forex) translation losses on its dollar-denominated debt offset growth in revenues and operating profit.
In an announcement on Wednesday, the listed conglomerate said consolidated revenues rose 7% to P99.9 billion from P93.3 billion a 12 months earlier, while operating profit increased 9% 12 months on 12 months to P17.1 billion, driven by record passenger volumes at Cebu Air, sustained volume growth in Universal Robina Corp.’s (URC) branded foods business, and better recognized residential revenues at Robinsons Land Corp. (RLC)
Core net income after tax declined 8% to P6.9 billion, mainly as a result of higher parent-level interest expense related to debt absorbed from its discontinued petrochemical unit, a bigger minority share in its real estate investment trust, and softer sugar prices in its commodities sub-segment.
Including the numerous reduction in losses from discontinued petrochemical operations, reported net income increased 19% to P5.2 billion throughout the quarter.
“Our first quarter results reflect regular execution across our portfolio, with 7% revenue growth and a 9% increase in operating profit — a mixture that demonstrates the underlying efficiency of our business,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said.
Mr. Gokongwei said the group continues to navigate heightened geopolitical and macroeconomic uncertainty, with rising fuel costs and peso depreciation pressuring margins and consumer purchasing power.
URC, the group’s food and beverage unit, posted a 6% increase in revenues to P47.9 billion, driven by sustained volume growth in its branded consumer foods business within the Philippines and stronger contributions from its international, animal nutrition and health, and flour segments.
URC’s net income, nevertheless, declined to P4 billion as a result of softer sugar prices, frontloaded promoting and promotional spending, and better freight costs linked to the Middle East conflict.
RLC posted an 11% increase in revenues to P12.2 billion, supported by resilient contributions from its investment portfolio and better recognized residential revenues. Net income rose 2% to P3.5 billion after accounting for a better share of minority interests in its real estate investment trust.
Cebu Air, Inc., the group’s airline unit, posted a P0.4-billion net loss, mainly as a result of the unfavorable translation impact of a weaker peso on its dollar-denominated debt. Revenues rose 10% to P33.3 billion, while earnings before interest, taxes, depreciation, and amortization increased 26% to P8.4 billion on lower fuel expenses from pre-war procurement.
The airline carried a record 7.5 million passengers in the primary quarter, up 8% 12 months on 12 months, while domestic market share increased to almost 58%.
Amongst JG Summit’s core investments, equity income from Manila Electric Co. rose 4% to P2.8 billion, supported by stronger performance from its power generation business, particularly liquefied natural gas and solar assets.
Dividend income from PLDT Inc. declined throughout the quarter after dividends fell by P1 per share to P46.
JG Summit said its consolidated debt-to-equity and net debt-to-equity ratios stood at 0.73 and 0.55, respectively. The corporate expects dividend inflows to rise 16% 12 months on 12 months in the primary half, enabling it to declare a money dividend of P0.45 per share, up 7% from last 12 months.
Shares in JG Summit fell 3.41% to shut at P25.50 apiece on Wednesday. — Alexandria Grace C. Magno