JG Summit nets P10.1 B in 2013

MANILA, Philippines - Foreign exchange losses weighed down the profits of tycoon John Gokongwei’s JG Summit Holdings Inc. last year, offsetting gains in the snacks and property businesses.

Consolidated net income sank by a quarter to P10.10 billion from P13.55 billion in 2012, JG Summit said in a regulatory filing.

“The 25.5-percent decrease is mainly due to the 8.1-percent depreciation of the peso year-on-year as the group recorded a P4.1-billion foreign exchange loss compared with a foreign exchange gain of P1.4 billion last year,” the holding firm said.

Consolidated core net income, which discounts foreign exchange, market valuations and derivative transactions, jumped 22 percent to P13.41 billion from P10.99 billion a year ago.

JG Summit said consolidated revenues derived from food, airline, real estate, petrochemicals and banking businesses rose 8.9 percent to P147.63 billion from P135.59 billion due to the strong performance of subsidiaries.

“This was brought about by the continuing growth of disposable incomes, personal consumption expenditures and the aggressive sales and marketing efforts of these subsidiaries,” JG Summit said.

The conglomerate also received P3.33 billion in dividend income from dominant carrier Philippine Long Distance Telephone Co., up 4.3 percent from P3.2 billion in the previous year.

For its operating units, JG Summit said revenues of food and beverage giant Universal Robina Corp. jumped 13.8 percent to P81 billion from P71.2 billion.

Budget airline Cebu Air posted an 8.2-percent growth in revenues to P41 billion from P37.9 billion while property unit Robinsons Land Corp. said its revenues improved 17.7 percent to P15.9 billion from P13.5 billion.

Equity in net earnings of associates, primarily from Singapore-based property firm United Industrial Corp. Ltd., rose to P2.28 billion from P2.01 billion, JG Summit said.

However, JG Petrochem’s revenues slumped nearly 80 percent to P1.02 billion from P4.91 billion given a technical shutdown since October 2012. It prepared for the completion and integration of its naphtha cracker plant that will start operations this year.

The group’s operating expenses rose 18 percent to P25.9 billion from P21.94 billion “due to higher selling, general and administrative expenses in the airline and food business units,” the holding firm said.

JG Summit spent around P36 billion last year to continue growing its existing businesses. It included the acquisition of new aircraft and new properties, and the construction of shopping malls and the naphtha cracker plant.

For this year, the investment firm of the Gokongwei family allotted around P40 billion for capital expenditures.