How the Gokongweis’ JG Summit Doubled Its Net Income in the First Half of 2024
One of the country’s largest and most diversified conglomerates has had a stellar first half of 2024. JG Summit, the holding company of the Gokongwei family, doubled its core profits to P18.1 billion during the first six months of the year versus the same period in 2023.
The company pointed to the strong demand for travel and leisure activities as well as the realized gains from its bank merger at the start of the year, as well as increased petrochemical operations plus higher food and beverage sales volumes, for the impressive growth.
Not counting the P7.9 billion merger gain, the conglomerate’s recurring core profits grew 12 percent year-on-year.
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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 versus the same period last year (SPLY).
Consolidated revenues stood at P187.8 billion for the first half of 2024, up 15 percent compared to the same period last year.
According to JG Summit, dividend receipts from its investee companies went up 13 percent YoY to P10.3 billion in the first half of 2024 as increases from units Universal Robina Corp, Robinsons Land Corp (RLC) and the first cash dividends received from the Robinsons Bank merger with BPI more than made up for the absence of PLDT’s 2023 special dividends. This reduced parent net debt to P54.2 billion as of end-June 2024, or five percent lower vs end-2023.
Looking at the core businesses, URC reported core profits increased five percent YoY to P6.3 billion off of total revenues of P80.7 billion for the first half of the year. Net income was flat at P6.6 billion on lower foreign exchange gains and higher impairment losses.
The real estate unit, RLC, reported core and net profits at Php6.0 billion and Php6.5 billion, respectively, up nine percent versus the same period last year. Revenues were up eight percent to P20 billion as rental incomes for its malls, offices, hotels and logistics units outpaced the decline in the recognized revenues for the Residential segment.
Cebu Pacific, meanwhile, posted an 18 percent growth in revenues to P51.4 billion. While core profits for the first half rose 26 percent P3.7 billion, net income declined five percent to P3.5 billion due to FX losses and the absence of MTM losses. Still, the country’s leading budget airline solidified its market leadership at 54 percent share, while international routes saw 32 percent more passengers in the first half of 2024 versus last year.
As for the conglomerate’s petrochemicals business, JG Summit Olefins Corp (JGSOC) reported revenues rising 80 percent to P25.5 billion for the first six months of 2024, although the unit still ended the period with a P7.4 billion net loss due to higher financing costs and additional depreciation from the fully completed plant expansion project.
JG Summit also reported increases in its core investments in some of the country’s biggest companies. The company’s share in Meralco’s income jumped 26 percent YoY to P5.8 billion as the boost in commercial activities and residential demand from higher temperatures increased sales volumes; equity earnings from Singapore Land Group jumped 15 percent to P1.3 billion as its hotel business posted a robust performance; Regular dividends from PLDT increased by P1 to P46 per share, although dividends received in the period were down 22 percent to P1.1 billion due to the lack of special dividends declared in 2023. Finally, with the effectivity of the merger between BPI and Robinsons Bank at the start of the year, JGS received its first cash dividends from BPI at P1.98 per share, totaling to P373 million.
Esquire Philippines is published by Summit Media, which is a unit of the Gokongwei Group.
