Conglomerate JG Summit Holdings Inc. earmarked P41.5 billion in capital expenditures for 2022, down 9.1 percent from P45.7 billion it spent a year ago, as it expects all units to face margin pressures over rising oil prices.
JG Summit said in a recent investor presentation the easing mobility restrictions would have positive effect on its food manufacturing, real estate and airline businesses.
The conglomerate, however, said the increasing prices of oil and key input costs, coupled with the peso depreciation, would affect the margins of all operating subsidiaries.
JG Summit’s property arm Robinsons Land Corp. will spend P20 billion this year, primarily for land banking and expansion projects across all divisions.
RLC will continue to inject additional assets to its real estate investment trust company and plans to launch a new mall, four office developments and four hotels. It also intends to launch P10 billion worth of residential projects.
Universal Robina Corp. budgeted P9 billion in capital spending this year to to expand capacities on the back of strong demand, while JG Summit Petrochemical Corp. allotted P9 billion to complete expansion plans and diversify power sourcing and shift to cleaner fuels, particularly solar.
Airline business Cebu Pacific Air will spend P2 billion in capital expenditures for maintenance and ground operations as domestic flight frequencies and booking trend towards pre-COVID levels.
Banking arm Robinsons Bank allotted P1 billion for 2022 capex as it plans to continue to build up and diversify portfolio via acquisition, retention, channel, collaboration and digitization strategies.
Meanwhile, the conglomerate reported that JGDEV, its corporate venture capital arm, intends to launch $50 million in second development fund within 2022. The fund will invest primarily in key focus sectors with strategic relevance to the group while also allocating a portion of the fund for opportunistic investments.
JG Summit booked net income of P5.1 billion in 2021, reversing a loss of P468.16 million in the previous year.
The positive net income was boosted by one-time gain from the sale of food manufacturing businesses in Australia and New Zealand by URC and tax relief from the passage of the Corporate Recovery and Tax Incentives for Enterprises Act.