JG Summit earnings down 22.5% to P2.31-B

JG Summit Holdings Inc., the umbrella unit of the Gokongwei group of companies, posted significant revenue growth in 2001 but its net income also contracted considerably as a result of various non-recurring writedown in investments.

Financial statements submittted to the Securities and Exchange Commission (SEC) showed JG Summit’s earnings dropped by 22.5 percent to P2.31 billion last year as against P2.98 billion the prior year.

"This includes non-recurring items amounting to P335.5 million consisting of writedown in value of investment and marketable securities, and write-off of various plants and shutdown expenses. Excluding such items, net income decreased by 9.8 percent," the company explained.

But from a revenue standpoint, JG Summit boosted its consolidated revenues of P44.19 billion in 2001, up by 28.3 percent from 2000, due to the significant growth of its largest contributor, the flagship Universal Robina Corp., and telecommunications arm Digital Telecommunications Philippines Inc.(Digitel), which increased 20.2 percent and 31.5 percent, respectively.

Its property development unit, Robinsons Land Corp., and textile business Litton Mills were also sources of increased revenues, as well as the full consolidation of Cebu Pacific Air Inc. into a wholly-owned subsidiary to add up revenues from the air transport business.

However, revenues were partly reduced by the drop in equity earnings in affiliated companies – the Singapore-based United Industrial Corp. and First Private Power Corp. – which posted lower earnings last year.

The JG Summit Group will spend about P20 billion this year for various expansion projects, with over half or about P13.5 billion channeled into Digitel’s expansion into the cellular mobile phone business.

The rest of its capital spending will be poured into property development projects like malls, office, residential and commercial buildings of Robinsons Land, plant and product expansion of URC, particularly in the branded consumer food operations in the Philippines and Asian region as well as in feeds, flour and packaging divisions.

Earlier this year, a JG Summit foreign-based subsidiary issued a $150-million bond offering, guaranteed by the parent company, for offshore investors in Hong Kong and Singapore as part of the group’s fund-raising program.

JG Summit is one of the country’s largest and most diversified conglomerates with an asset base of P141.3 billion at end-2001. With more than 40 separate operating companies, subsidiaries and affiliates, the JG Summit group’s operations are focused on seven core businesses: snack foods, airlines, telecommunications, real estate, textile milling, petrochemicals and retailing.

Its other ventures include power generation, financial services, publishing and circuit board manufacturing. – Conrado Diaz Jr.