JG Summit 9M 2016 Net Income Increased 44.4%

Pasig—(PHStocks)—JG Summits Holdings Inc. (PSE: JGS) posted a consolidated net income from equity holders of the parent of PhP5.72 billion for the third quarter of 2016, bringing our nine months consolidated net income to PhP23.25 billion, A 44.4% increase from PhP16.11 billion for the same period last year. The increase is mainly due to the double-digit income growth in our Airline Business, which benefited from the drop in fuel prices and fuel hedging gains, and the performance of our Petrochemicals business, which expanded significantly since the start of its integrated operations in November 2014 coupled by the lower costs of naphtha feedstock sold during the period.

Consolidated EBITDA reached PhP52.88 billion, a 12% increase compared to last year, and core net income after taxes (excluding non-operating and nonrecurring items) increased by 10% from PhP20.74 billion for the nine months of 2015 to PhP22.83 billion in 2016.

Consolidated revenues grew 4.6% from PhP169.78 billion to PhP177.52 billion due to the performance of the following core subsidiaries:

  • Cebu Air’s total revenues went up by 10.5% from PhP42.26 billion to PhP46.69 billion for the nine months of 2016 due to 6.0% increase in passenger volume and 8.4% increase in average ancillary revenue per passenger.
  • RLC’s total revenues also increased by 15.2% from PhP14.6 billion in 2015 to PhP16.81 billion in 2016 brought about by the growth in real estate sales and rental income in average contribution of the four newest malls and three new office buildings.
  • JG Petrochemicals Group revenues increased by 8.2% from PhP19.44 billion for the nine months of 2015 to PhP21.03 billion for the same period this year due to higher sales volume.
  • URC’s total revenues slightly decreased from PhP82.04 billion to PhP81.73 billion for the nine months of 2016 mainly due to the decline in sales of branded consumer foods group, international operations.
  • Robinsons Bank revenues increased 14.9% from PhP2.19 billion for the nine months 2015 to PhP2.51 billion for the same period this year mainly due to increase in interest income recognized from finance receivables.

Revenues from our core investments declined this period compared to same period last year as dividend income received by the Group dropped 29.4% from PhP2.82 billion last year to PhP1.99 billion this year mainly due to lower dividends declared by PLDT for the period. Equity in net earnings of associates, primarily from investments in UIC and Meralco, slightly increased from PhP6.03 billion for the nine months of 2015 to PhP6.35 billion for the nine months of 2016, On June 28, 2016, the parent company purchased 30% stake in Global Business Power Corp. so a corresponding equity earnings take-up was recorded for the period. The group’s operating expenses increased by 10.8% from PhP28.83 billion last year to PhP31.93 billion in the same period this year due to higher selling, general and administrative expenses, particularly in the airline and food business units. As a result, operating income or EBIT went up 10% from PhP36.56 billion to PhP40.23 billion.

As of September 30, 2016, the JG Summit’s balance sheet remains healthy, with consolidated assets of PhP647.89 billion from PhP596.33 billion as of December 31, 2015. Current ratio stood at 1.07. The Group’s indebtedness remained manageable with gearing ratio of 0.70 ad net debt to equity of 0.55 as of September 30, 2016. Stockholders’ equity, excluding minority interest, stood at PhP240.52 billion as of September 30,2016 from PhP223.39 billion as of December 31,2015. Book value per share stood at PhP33.57 as of September 30, 2016.

Universal Robina Corp. (PSE: URC) generated a consolidated sale of goods and services of PhP81.73 billion for the nine months of 2016, slightly lower than the same period last year. Sale of goods and services performance by business segment follows; (1) URC’s branded consumer foods segment (BCFG), excluding packaging division slightly declined to PhP66.78 billion for the nine months of 2016 from PhP68.28 billion registered in the same period last year. BCFG domestic operations posted a 3.6.% increase in net sales from PhP42.76 billion for the nine months of 2015 to PhP44.30 billion for the nine months of 2016 mainly driven by growth in RTD beverages with positive performances on water, juice, and RTD tea. Sales was muted due to decline in powdered beverages, which was affected by the slower growth of total coffee market while snack foods category was flattish due to the aggressive low-priced players affecting corn chips and fabricated potato segments. BCFG International operations reported an 11.9% decline in net sales from PhP25.52 billion for the nine months of 2015 to PhP22.48 billion for the nine months of 2016 due to regulatory issues encountered in Vietnam, which affected both sales and profitability. Most countries managed to grow sales with Indonesia, Thailand and Malaysia as contributors. Sale of goods and services in URC’s packaging division slightly declined by 1.2 to PhP823.79 million for the nine months f 2016 from PhP834.08 million recorded in the same period last year due to decline in volume.(2) Agro-Industrial segment (AIG) amounted to PhP6.83 billion for the nine months of 2016, a 2.3% increase from PhP6.68 billion recorded in the same period last year. Feeds business grew by 21.1% due to increase in sales volume while farm business decline by 14.8% due to lower sales volume and price hogs (3)Sale of goods and services in commodity food segments (CFG) amounted to PhP7.30 billion for the nine months of 2016, a 16.6% increase from PhP6.26 billion reported in the same period last year as Sugar and renewable grew by 35.4% due to sales distribution from the renewable energy businesses while flour business declined by 4.0%despite higher volume due to lower average selling price. URC’s core earnings before tax (operating profit after equity earnings, net finance costs and other income-net)for the nine months of 2016 amounted to PhP10.75 billion a decline of 12.9%from PhP12.34 billion recorded  in the same period last year. Net income attributable to equity holders of the parent increased by 11.0% to PhP10.50 billion for the nine months of 2016 from PhP9.46 billion for the months of 2015. URC reported an EBITDA  (operating income plus depreciation and amortization ) of PhP15.80 billion for the nine months of 2016. 5.3% lower than PhP16.69 billion posted for the nine months of 2015.

Robinsons Land Corp. (PSE: RLC) consolidated net income attributable to equity holders of the parent for the nine months of 2016 amounted to PhP4.81 billion up by 12.7% from the same period last year. EBIT and EBITDA rose by 11.8% and 11.9% to PhP6.37 billion and PhP9.05 billion respectively, for the nine months ended September 30, 2016. Total real estate revenues were up by 16.1% to PhP15.53 billion against last year’s PhP13.37 billion, while hotel revenues were slightly up by 0.8% to PhP1.31 billion. The Commercial Centers Division contributed 43.7%  or PhP7.36 billion of RLC’s gross revenues, posting a 7.8% growth due to same mall rental revenue growth of 7% and rental revenue contribution of the new malls namely Robinsons Place Las Pinas, Robinsons Place Antique, Galleria Cebu and Robinsons Jaro Iloilo. RLC’s Revenues while office Buildings Division contributed 12.5% or PhP2.11 billion, up to by 23.8% from last year’s PhP1.7 billion largely due to the new office buildings Cyberscape Alpha, Cyberscape Beta and Tera Tower. The eight existing office buildings likewise posted an average of 16.8% rental revenue growth this year. The Hotel Division contributed 7.8% or PhP1.31 billion to RLC’s Revenues, slightly down by 0.8% versus same period last year. Real estate cost went up by 17.9 to PhP7.07 billion while hotel expenses were slightly down by 0.8% to PhP971.76 million. General and administrative expenses were up by 21.4% to PhP2.43 billion because of higher taxes and licenses and salaries and wages among others.

Cebu Air Inc. (Cebu Pacific, PSE: CEB) generated gross revenues of PhP46.69 billion for the nine months of 2016, 10.5% higher than the PhP42.26 billion revenues earned in the same period last year mainly attributed to the increase in passenger revenues by 10.1% to PhP35.36 billion in the nine months of 2016 from PhP32.13 billion posted in the nine months of 2015. This increase was due to the 6.0% increase in passenger volume to 14.48 million from 13.65 million in 2015 consequent to the slight increase in seat capacity by 0.4% in 2016 and overall improvement in seat load factor year on year from the increase in the Group’s fleet from 55 aircraft as of September 30, 2015 to 56 aircraft as of September 30, 2016. The increase in average fares by 3.8% to PhP2.442 for the nine months ended September 30, 2016 from PhP2.353 for the same period last year also contributed to the increase in revenues. Cargo revenue grew 2.5% to PhP2.55 billion for the nine months of 2016 from PhP2.49 billion for the nine months of 2015 following the increase in the volume of cargo transported in 2016. Ancillary revenues went up by 14.9% to PhP8.79 billion in the nine months ended September 30, 2016 from PhP7.65 billion registered in the same period last year consequent to the 6.0% increase in passenger traffic and 8.4% increase in average ancillary revenue per passenger. Improves online bookings, together with a wider range of ancillary revenue products and services, also contributed to the increase .Net Income for the nine months ended September 30, 2016 amounted to PhP7.1 billion, an increase of 99.6% from PhP3.56 billion in net income earned in the same period last year.

JG Summit Petrochemicals Group, which consist of JG Summit Petrochemicals Corp. (JGSPC) and JG Summit Olefins Corp. (JGSOC), reached combined gross revenues of PhP21.03 billion for the nine months of 2016, an 8.2% increase from PhP19.44 billion in the same period last year due to higher sales volume from 438.681 MT in 2016 to 536.004 MT in 2016. On the other hand, cost and expenses decreased by 5.1% from PhP18.39 billion for the nine months of 2015 to PhP17.46 billion for the nine months of 2016 mainly due to lower naptha cost. A net foreign exchange loss of PhP39.25 million was recognized for the nine months of 2016 from PhP329 million for the same period last year due to higher depreciation of the Philippine Peso against US dollar in 2015. Net Income of PhP4 billion was recorded for the nine months of 2016 from PhP1.3 billion for the same period last year, or an improvement of 208.5%.

Robinsons Bank Corp. generated banking revenue of PhP2.51 billion for the nine months of 2016, a 14.9% increase from last year’s PhP2.19 billion brought about by higher interest income, commission income and trading gain for the period. Cost and Expenses also increased as the bank continued its expansion. Net earnings increased by 72.7% to PhP218.23 million for the nine months of 2016 from PhP126.35 million in the same period last year.

Equity in net earnings of associate companies and joint ventures amounted to PhP6.35 billion for the nine months of 2016, a 5.2% increase from last year’s PhP6.03 billion, including the equity earnings take-up from Global Business Power Corp. (GBP) amounting to PhP162.9 million for the third quarter of 2016. The equity earnings from Meralco decreased by 3.0% from PhP4.21 billion last year to PhP4.09 billion in the same period this year. Equity income from UIC increased by 5.4% from PhP1.94 billion last year to PhP2.05 billion for the nine months of 2016.

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