JG Summit Holdings, Inc. Saw its Core Net Income Tripling to PHP 19.6 Billion in 2023

JG Summit Holdings, Inc. (JGS), one of the Philippines' largest and most diversified conglomerates, had its core net income triple to P19.6 billion in 2023, up from P6.2 billion in 2022. This strong result was driven by a dramatic turnaround in the company's airline, as well as increased margins in its property and food sectors and reduced losses from its petrochemical unit.

These figures were delivered on the back of a 14% increase in overall revenues of P343.8 billion, thanks to the first full year of unconstrained travel demand, combined with broad-based growth in its real estate unit and consistent improvement in its food and petrochemical sales. Despite the lack of the P3.2 billion gain on the sale of Meralco shares recorded in 2022, JG Summit's consolidated core net income increased by 218% year on year (YoY), with the strong topline aided by higher operational margins across all of its subsidiaries. Including more favorable foreign currency (FX) and mark-to-market adjustments, net income increased to P20.2 billion, 30 times the P0.7 billion recorded in the same period last year (SPLY).
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Furthermore, JG Summit maintains a strong financial base, allowing it to drive growth throughout the company. Its consolidated D/E and net gearing ratios were 0.68 and 0.57, respectively, at the end of 2023. At the parent level, cash and long-term debt declined by 74% and 35%, respectively, against end-2022 when the company fully settled its $750 million bond in January 2023, without the need for refinancing.

On the company’s full-year performance, JGS President and CEO Mr. Lance Y. Gokongwei said, “In 2023, we saw our airline and property businesses benefiting from fully lifted mobility restrictions while we carefully navigated the tough inflationary environment that affected demand and margins, especially for our food business. Our Petrochemical unit, however, still suffered from weaker overall demand but we are encouraged by the internal progress of our transformation program that ensures it remains competitive when the cycle turns.

As we look forward, easing inflation and the potential rate cuts would bode well for consumer demand and lower input prices. We hope to recover lost volume and market shares in our food business, sustain portfolio expansion in our real estate arm, increase capacity and short-haul recovery for our airline, and crystallize the financial gains from our petrochemical transformation program. These would allow us to bring our core profits closer to its pre-pandemic record levels within the next 12 months.”

Key performances per business unit are as follows:

Universal Robina Corporation's (URC) total revenues grew 6% YoY to P158.4 billion, primarily from the volume and value expansion of its Agro-Industrial division, together with the post-price correction recovery it saw in its international business, and the growth in most of its domestic categories that helped offset the challenged segments. Meanwhile, its operating income reached P17.4 billion, up 14% YoY and more than twice the pace of revenues, as its EBIT margins rose 80 bps to 11% from key pricing moves, favorable product mix, and significant operating savings. These translated to core net income improving 5% YoY to Php12.0 billion, but the one-off gain recognized on a sale of land in 2022 plus unfavorable YoY FX movements resulted in the 13% decline in net income to P12.2 billion.
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Robinsons Land Corporation (RLC) reported a topline of P39.0 billion in 2023 as a result of the strong performance of its malls and hotels, which saw increased mobility and consumer spending, as well as its residential business, which saw faster construction progress and higher contributions from its Joint Ventures (JV). These offset the 10% YoY reduction in revenues, mostly owing to Chengdu sales recognized last year. Meanwhile, the company's EBIT and EBITDA margins hit new highs of over 40% and 50%, respectively. These paved the way for a 24% increase in net income year-on-year to P12.1 billion.
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Cebu Air, Inc.'s (CEB) efforts to regain capacity and efficiently fulfill the strong travel demand paid off, as the company achieved its first full-year profit since the pandemic. Its revenues surged by 60% year on year to P90.6 billion, as it served over 20.8 million people and increased flights by 30% as it worked to improve operational resiliency and capacity expansion. When combined with more efficient operations and lower fuel costs, net profitability in FY23 increased to P7.9 billion from a loss of P14 billion in 2022.
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As the industry remained stretched throughout the lengthy petrochemical cycle trough, JG Summit Olefins Corporation (JGSOC) made the strategic choice to close the plant in early 2023, and activities resumed in June. Following the resumption, sales volumes improved, resulting in a 19% YoY growth and a steady 6% increase in revenues to P38.0 billion despite lower petrochemical selling prices. This, together with higher margins from its new downstream goods, allowed JGSOC to reduce its EBITDA losses by P4.3 billion year on year, to a P3.8 billion deficit in 2023.

The group's share of Manila Electric Co.'s (MER) FY23 earnings increased 26% year on year to P9.8 billion. This development was driven by considerable contributions from its power-producing and retail energy operations, as well as sustained expansion in its distribution sector.
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Its equity income from Singapore Land Group (SLG) decreased to P2.5 billion from P3.0 billion (SPLY). This was owing to a decline in the contribution from its residential developments, which were considerably sold off by the end of 2022. However, these were partially countered by the recovery of the hospitality industry, which resulted in improved hotel operations.

​The company saw 8% lower dividends from PLDT, Inc. totaling to P2.6 billion as the telecommunications company halved its special dividends from tower sales to P14 per share. Nonetheless, its regular dividends increased by P5 to P94 per share.