JG Summit to increase capital spending by 28% this year

JG Summit Holdings Inc., the holding company of the Gokongwei group, said it is increasing its capital spending (capex) this year to 47.8 billion pesos, the bulk of which will be spent on its petrochemical business, promoting real estate and low cost airline Cebu Pacific losses.

This year’s capex is 28% higher than the previous year’s 37.3 billion pesos, the company said.

Lance Y. Gokongwei, president and CEO of the company, said some 20 billion pesos will be allocated to his real estate unit, nearly double the actual spending of 11 billion pesos last year; 13 billion pesos for its petrochemical activity, less than the 15 billion pesos last year; P3 billion for Cebu Pacific, slightly lower than P4 billion last year; and the remaining 10 billion pesos will be used for its other activities.

JG Summit’s first-quarter revenue fell 93% to just P122.18 million from P1.9 billion a year earlier, mainly due to Cebu Pacific’s huge losses.

Revenue fell to 67.63 billion pesos from 67.88 billion pesos last year.

“For the remainder of this year, we will continue to focus on executing our recovery plan. We believe the group is well positioned to respond to changing consumer needs and behaviors as well as the sustainable transition to digital channels in a post-Covid world. Our digital and agile transformation continues to accelerate with the ultimate goal of driving innovation faster, improving the customer experience and enabling us to become more productive in operations, ”said Gokongwei.

The food group Universal Robina Corp. reported a net profit of 3 billion pesos in the first quarter, up more than half from 1.98 billion pesos last year. Revenue, however, was flat at 34.61 billion pesos compared to 33.45 billion pesos last year.

Cebu Air Inc. suffered a net loss of 7.29 billion pesos for the period, much larger than the net loss of 1.18 billion pesos last year.

Total revenue was down 83% to P2.7 billion from 15.19 billion pesos last year.

“Our goal is to come out 25% to 30% more efficient than we were before the pandemic,” Gokongwei said at the company’s shareholders meeting.

The company only made 7,236 flights and 550,000 passengers in the first quarter, down 76% and 88% respectively from a year ago.

JG Summit Petrochemicals Group reported income of 48 million pesos compared to last year’s loss, the company said.

Revenues tripled to 9 billion pesos thanks to higher volumes, with strong demand from local and export markets. Utilization rates continued to improve following planned shutdowns last year. Its cracker usage is currently over 100% and the polymer usage rate is now 88%.

The net income of Robinsons Bank Corp. for the first quarter fell 33% year-on-year to 34 million P2, mainly due to lower trade gains and additional provisions, reflecting the bank’s caution in the face of the potential negative impact of the pandemic on the quality of assets.

Revenues are stable at P2.3 billion.

Equity in net profit of associates and joint ventures amounted to 1.4 billion pesos, up 68% last year, mainly thanks to its investments in the energy sector. Manila Electric Co.’s first quarter figures already include its full ownership of Global Business Power Corp. Dividend income also increased as PLDT Inc. declared higher dividends this year given its strong performance in 2020, the company said.

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