JG Summit posts 5-fold increase in 1st quarter income

MANILA, Philippines - JG Summit Holdings Inc., the flagship company of tycoon John Gokongwei, said its net income grew five times in the first quarter of the year due to the continued strong growth posted by most of its business units, complemented by a strong peso.

In a financial report submitted to securities regulators, JG Summit said net earnings surged to P4.41 billion from a meager P864 million while revenues rose 13.5 percent to P29.7 billion.

JG Summit booked P1.32 billion in foreign exchange gain, a reversal of the P842.82 million loss incurred a year earlier. It also reported treasury gains of P72.37 million as against a loss of P263.72 million.

The group’s core earnings jumped by 100.7 percent to P4.86 billion while EBITDA grew 36.85 percent to P8.8 billion.

Branded consumer food unit Universal Robina Corp. accounted for nearly half of JG Summit’s total revenues or P14.37 billion, posting an 8.3 percent growth from the P13.27 billion recorded the previous year.

Airline operator Cebu Pacific chipped in P6.97 billion to total revenues, up 31.5 percent from P5.3 billion while telecommunications arm Digital Telecommunications contributed P3.9 billion, representing a 21.4 percent improvement from the year earlier figure of P3.21 billion.

Only its petrochemical business showed a drop in sales by 7.6 percent to P937.66 million.

Consolidated operating expenses went up 14.2 percent as a result of higher general and administrative expenses in its mobile phone network, increased airline operations and higher selling and distribution costs of the food business.

Financing costs and other charges fell due to lower level of financing debt and also due to lower foreign exchange rates used to translate dollar-denominated debt as compared to the same period last year.

Cebu Pacific nearly tripled its net income in January to March this year to P1.62 billion from only P330.11 million. Revenues grew 31.5 percent to P6.97 billion owing to a surge in passengers resulting mainly from additional flights and the opening of one domestic destination. Increase in average fares and the automatic recognition of revenue from no-show passengers also boosted revenues for the period.

Digitel broke in the black with net earnings of P334 million as against a loss of P286.6 million. The turnaround was driven mainly by the marked improvement in its wireless business, lifting revenues 21.5 percent to P3.9 billion. This was attributed to the continued success of the unlimited service portfolio (e.g. 24/7 Call & Text Unlimited and Text Unlimited) and increase in subscriber count from the Group Plans and Plan 350 products.

Non-service revenues from the wireless communications segment also increased by 88.3 percent as a result of higher sales of SIM packs and phone kits. The wireline voice communication services registered revenues of P742.1 million, down 14.6 percent due to lower revenues from international and domestic tolls, and local exchange.

Robinsons Savings Bank reported a net income of P44.54 million, 11.6 higher than the previous year’s P39.90 million on higher interest income.

 As of end-March 2010, JG Summit’s balance sheet remains healthy, with consolidated assets of P285.05 billion and cash of P19.58 billion.