Conglomerate JG Summit Holdings Inc. of industrialist John Gokongwei posted a net income of P22.4 billion in 2018, down 24 percent from a year ago, on the weak performance of the airline, petrochemical and food manufacturing businesses.
JG Summit said in a disclosure to the stock exchange consolidated revenues last year rose seven percent to P291.9 billion, driven by higher sales from its property unit, robust passenger and cargo revenues and the banking unit’s sustained growth momentum.
“We may say that the group braved a perfect storm in 2018. Our cyclical and food businesses were challenged by high inflation and fuel prices, weaker peso, as well as intense competitive dynamics. We are more optimistic in 2019, but we would remain vigilant of various risks and continue strengthening our diverse strategic business units to ensure balanced sources of profitability,” said JG Summit president and chief executive officer Lance Gokongwei.
“We will also carry on our key initiatives in the areas of customer centricity to drive growth, a more active portfolio management to strengthen our core, digital transformation and sustainability,” Gokongwei added.
JG Summit said the group also incurred higher financing costs due to Cebu Pacific’s fleet expansion and higher petrochem trust receipts.
The conglomerate’s food manufacturing unit, Universal Robina Corp., reported a 15-percent decline in net income to P9.2 billion due to volume decline and higher selling and distribution costs in the Philippines.
The airline business suffered a 33-percent decline in core net income to P5.9 billion given the rise in jet fuel cost, weaker peso and higher interest rates, as well as the Boracay and airport runway closures. JG Petrochemicals Group’s net income declined to P1.1 billion.
Robinsons Land Corp., meanwhile, said net income jumped 40 percent to P8.2 billion in 2018, driven by strong sales from the residential and leasing businesses.
Equity in net earnings of associated companies and joint ventures increased three percent in 2018 to P10.2 billion, mainly driven by the 18 percent year-on-year growth in JG Summit’s equity earnings from Manila Electric Co.