JG Summit sets higher capex for 2024

MANILA, Philippines — Conglomerate JG Summit Holdings Inc. expects its capital spending to balloon to over P99 billion this year, higher than the group’s originally allotted budget for 2024, due to additional engine deliveries for budget carrier Cebu Pacific.

“While we initially budgeted P87 billion in capex for the year, we are anticipating additional engine deliveries for Cebu Pacific, which may put our total 2024 spending above (the) 2023 (level),” JG Summit president and CEO Lance Gokongwei said during the company’s annual stockholders’ meeting yesterday.

JG Summit’s group-wide capex last year surged by 39 percent to P98.9 billion from 2022’s P71.3 billion, driven primarily by capacity expansion initiatives of both Cebu Pacific and Universal Robina Corp. (URC).

For this year, the company’s original capex budget allocation was at P87.2 billion, bulk of which will go to Cebu Pacific at P48.7 billion, followed by Robinsons Land Corp. (RLC) and URC at P22 billion and P12.7 billion, respectively.

Gokongwei said the group’s strategic business units are continuously expanding their capacity and footprint.

“For 2024, the group continues to invest in expansion projects, specifically in sites such as the Malvar property of URC, increasing the leasable area for RLC, additional 18 aircraft deliveries for Cebu Pacific and capex to sustain JG Summit Olefins Corp. operations and settle its previous project contract payments,” Gokongwei said.

Gokongwei said the first line of URC’s new production plant in Batangas is expected to be operational by the end of 2024.

“This will cover both expansion and replacement capacities for URC,” he said.

“For RLC, we intend to open the Opus Mall in July this year as well as Robinsons Pagadian and we are further expanding NuStar Hotel, adding new rooms in the fourth quarter of this year, as well as various logistics facilities,” Gokongwei said.

Cebu Pacific, meanwhile, aims to grow its total full year capacity by 12 to 15 percent with the 18 additional aircraft that will be delivered this year, five of which have already been delivered in the first quarter.

DHL Summit Solutions Inc., JG Summit’s joint venture with DHL, is set to onboard more customers outside the Gokongwei Group after adding two new major customers in the first quarter.

Gokongwei said digital bank GoTyme likewise continues to expand its product offerings such as SME lending and earned wage access.

“While we remain cautious given short-term headwinds from elevated fuel prices, interest and forex rates, we continue to work hard to accelerate the recurring core profits in succeeding quarters. With these advancements across the group, we hope to remain ahead of the curve as we continue our commitment to providing our customers with better choices and create shared success with all our stakeholders,” Gokongwei said.