Gokongwei-led JG Summit Holdings, Inc. (JGS) reported an improvement in earnings for the third quarter of the year compared to the first half as the Philippine economy progressively opens up despite the COVID-19 pandemic.
In a disclosure to the Philippine Stock Exchange, the firm said consolidated net income in the third quarter of 2020 registered at P844 million, a significant turnaround from the reported P720 million loss in the first six months of 2020.
Improving contributions from petrochemicals and real estate coupled with reduced losses from air transport drove the quarter-on-quarter recovery and brought JGS’ net income for the nine months ending September 30, 2020 to P123.85 million from P21.07 billion in the same period last year.
Higher margins from food and banking also boosted earnings. Excluding the impact of foreign exchange gains and market valuation losses, as well as the non-recurring impairment loss recognized by its power affiliate, JGS’ core net income after taxes reached P1.2 billion in the first nine months of 2020.
“The group’s operations remain to be challenged by the COVID-19 disruption. Nonetheless, the resilient topline performance of JGS’ food, banking and office business segments continue to temper the year-on-year (YoY) decline in its airline, mall, hotel and petrochemical revenues in the first nine months of 2020.
In the third quarter of 2020, this was further alleviated by improving petrochemical utilization rates and sales volumes, the gradual resumption of domestic and international flights, as well as increasing operational gross leasable space in malls.
All in all, JGS closed the first nine months of 2020 with consolidated revenues of P167.3 billion, 27 percent lower than the P230.41 billion registered in the same period last year.
“The business continues to face challenges brought about by COVID but I am encouraged by our results in the third quarter,” JG Summit President & CEO, Lance Gokongwei said.
He added that, “With the easing of restrictions, economic activity has slowly returned and our different business units showed some quarter on quarter recovery but I also note that these results are far from ideal and still showed steep declines versus a year ago.”
Gokongwei noted that, “Weaker consumer sentiment will continue to affect demand for products and services in the near term thus we remain cautiously optimistic. We will however focus on execution to build on and continue the momentum that have started in the third quarter. The prospects of a vaccine likewise give us hope that this will unlock further acceleration and recovery towards the latter part of 2021.”
Universal Robina Corporation reported that revenues were flat in the first nine months of 2020at P99.8 billion. Better product mix and cost management, coupled with lower debt and interest expense, led URC to report net income of P7.5 billion, a 7 percent improvement from the same period last year.
Robinsons Land Corporation reported a strong recovery in net income to P717 million in the third quarter of 2020 but the additional depreciation from newly-opened properties as well as interest expense on newly-issued loans pulled nine-month net income down by 31 percent to P4.4 billion.
Cebu Air reported a 70 percent drop in nine month revenues to P19.3 billion resulting in a net loss of P14.7 billion.
JGS’ petrochemicals business reported a 45 percent fall in revenues to P14.5 billion in the first nine months of 2020 and a net loss amounting P1.9 billion.
Robinsons Bank reported a net income of P786 million, a 68 percent growth from last year. Equity in net earnings of associated companies and joint ventures decreased by 56 percent to P4.6 billion.
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