Gokongweis’ JG Summit Triples Core Net Income in 2023

The Gokongwei family’s JG Summit Holdings (JGS) reported a threefold increase in its core net income in 2023 thanks to a rebound in air travel and significant increase in margins in its other business units, particularly its property and food businesses. 

JGS’s core net income was at P19.6 billion in 2023, over three times the P6.2 billion it recorded the previous year. Total revenues was at P343.8 billion, surging 14 percent from 2022’s P301.91 billion.

Net income also leaped P20.2 billion, 30x the P700 million it reported in the same period the previous year after it incorporated more favorable foreign exchange (FX) and mark-to-market adjustments.

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Leading the charge was Cebu Air (Cebu Pacific), whose revenues grew 60 percent year on year to P90.6 billion on the first full year of unrestricted travel demand. Net income for 2023 was at P7.9 billion versus a P14 billion loss in 2022. Flights also increased 30 percent versus 2022, leading to total number of passengers serviced to 20.8 million.

As of end-2023, Cebu Pacific says it had a fleet of 85 aircraft, after receiving 18 deliveries, and now operates in 60 destinations across 108 routes with over 2,700 weekly flights. It has solidified its position as the Philippines’ leading domestic carrier with a 53 percent market share.

JGS’s food unit Universal Robina Corporation (URC) meanwhile reported total revenues at P158.4 billion, up six percent from 2022. The unit says this is primarily due to 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.” 

URC’s 2023 operating income reached P17.4 billion, up 14 percent versus the year prior while core net income improved five percent to P12.0 billion. However net income was down 13 percent to P12.2 billion due to the one-off gain recognized on a sale of land in 2022 plus unfavorable foreign exchange movements.

In the real estate and hotels front, Robinsons Land Corporation (RLC) posted a topline growth of P39.0 billion in 2023 led by the strong performance of its Malls and Hotels unit as well as its Residential business and its Joint Ventures. (JV) that had higher contributions.

RLC’s net income grew 24 percent to P12.1 billion while its net sales take-up achieved a historic high at P21.3 billion, up 26 percent from 2022. JV net sales take-up, meanwhile, ballooned 117 percent  year on year. 

RLC says it is continuing to expand its footprint as it increased its logistics leasable area by 36 percent to 227,000 square meters. It also opened NuStar Mall in Cebu in December 2023.

Revenues for JG Summit Olefins Corporation (JGSOC) expanded six percent to P38 billion while net loss narrowed by P4.3 billion to P3.8 billion in 2023.

Meanwhile, the conglomerates’ core investments also continued to show results in 2023. Its share in Meralco’s fiscal year 2023 earnings jumped 26 percent year on year to P9.8 billion, while equity income from Singapore Land Group (SLG) fell to P2.5 billion from P3.0 billion in 2022. The company also saw eight percent 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. Regular dividends still increased by P5 to P94 per share.

“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,” said JGS President and CEO Mr. Lance Y. Gokongwei. “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.,” he added. “These would allow us to bring our core profits closer to its pre-pandemic record levels within the next 12 months.”

Esquire Philippines is published by Summit Media Inc., a unit of the Gokongwei Group.