Travel rebound benefits JG Summit

Gokongwei group flagship JG Summit Holdings Inc. (JGS) doubled its profits in the first half amid strong demand for travel and leisure activities on the back of realized gains from its bank merger at the start of the year.

In a stock exchange report, the company said core net income after taxes totaled P18.1 billion in the first half — almost twice the P9.5 billion delivered in the same period last year.

JGS said the profit growth was buoyed by the double-digit topline growth of 15 percent in the first half of the year, which brought its consolidated revenues to P187.8 billion. Excluding the P7.9 billion merger gain, recurring core profits grew 12 percent year-on-year.

Meanwhile, reported net income, which incorporates non-core items such as foreign exchange (FX) and mark-to-market (MTM) losses, stood at P14.8 billion, up 43 percent against the same period last year.

“We continue to post overall topline growth despite the lingering effects of inflation which dampened consumer sentiment. We have seen a divergence of results from our operating units with the strong demand for travel and leisure benefiting our air transport and real estate businesses,” JGS president and CEO Lance Y. Gokongwei said.

“As we move to the second half, we hope to sustain this momentum with the expected decline in inflation that in turn could ignite the sequential rebound in consumer demand,” he added.

From January to June, Universal Robina Corp., the food and beverage arm of the group, sold a total of P80.7 billion from its products, representing a 3 percent growth from last year’s sales volumes.

Rental gains boost RLC

Meanwhile, Robinsons Land Corp. (RLC) maintained a steady growth in its revenues at 8 percent, amounting to P20 billion in the first half, as its rental incomes outpaced the decline in the recognized revenues for the residential segment.

RLC’s core and net profits reached P6 billion and P6.5 billion, respectively, due to the increase in minority share in its REIT company, RCR, following the block placement last April.

Meanwhile, Cebu Air Inc., which operates budget airline Cebu Pacific, saw its first-half profits slip by roughly about 5 percent to P3.5 billion from P3.7 billion in the same period a year ago as expenses shot up.

The company’s most recent stock exchange report revealed the decline was partially attributed to the second quarter’s earnings performance, which showed a significant decrease of approximately 52 percent, dropping from P2.7 billion in the previous year to P1.3 billion.

Despite the headwinds, Cebu Air said it remains optimistic about charting a better second half, especially after it carried six million passengers in the second quarter — the highest passenger count in a single quarter in its history.

Due to a five-month commercial shutdown the previous year, JG Summit Olefins Corp. started from a low base.

However, this year, they increased plant operations and recorded higher sales volumes across all products due to more targeted selling and disciplined pricing. As a result, their revenue surged by 80 percent, reaching P25.5 billion in the first half of the year.

Despite the revenue growth, subdued demand prevented higher selling prices and kept polymer margins in negative territory.