JG Summit to maintain capex budget

MANILA, Philippines - Conglomerate JG Summit Holdings Inc. is likely to spend next year the same amount it allocated for capital expenditures (capex) this year, a ranking official said.

Tycoon John Gokongwei’s investment holding firm has earmarked P44.2 billion for capital spending this year.

“I think it will be the same. What will only change is the breakdown,” said Bach Johann Sebastian, URC senior vice president, said on the sidelines of the Philippines Investment Conference yesterday.

Sebastian said bulk of the capex would continue to go to property arm Robinsons Land Corp. and budget carrier Cebu Air Inc., while budget allocation for JG Summit Petrochemicals Corp. would be reduced.

“Over the next two years, capex will be driven mostly by the three largest operating subsidiaries namely Universal Robina Corp., Robinsons Land Corp., and Cebu Pacific. Of the three, I think Robinsons Land and Cebu Pacific will be where most of the capex will be,” Sebastian said.

“It’s a necessity for Robinsons Land. It’s a property company and there is a need to continue acquiring assets. For Cebu Pacific, it’s driven by the deliveries of aircraft we have ordered up to the year 2020,” he added.

Of the total P44.2 billion capital spending this year, P16 billion has been allocated to Robinsons Land, P14.1 billion for Cebu Air, P9 billion for URC, P5 billion for JG Summit Petrochemicals,. and P100 million for Robinsons Bank Corp.

In the first half of the year, JG Summit’s profits more than doubled to P13 billion from P5.17 billion a year ago.

Core net income, which discounts the net effect of gains/losses on foreign exchange, market valuations, derivative transactions and extraordinary items, likewise increased 30.5 percent to P10.32 billion from P7.91 billion the previous year.