JG Summit 1Q15 Net Income Up 11.2%

Pasig–(PHStocks)–JG Summit Holdings Inc. (PSE: JGS) posted a consolidated net income from equity holders of the parent of PhP6 billion for the first quarter of 2015, an 11.2% increase from PhP5.4 billion for the same period last year.

The increase is due mainly to the income growth from core subsidiaries particularly Cebu Air (PSE: CEB), which benefited significantly from the substantial reduction in fuel prices during the period.

Consolidated EBITDA reached PhP15.1 billion, a 25.9% increase compared to last year. Core net income after taxes increased 10.1% from PhP5.6 billion for the first three months of 2014 to PhP6.2 billion for the first quarter of 2015.

Consolidated revenues grew by 31.4% from PhP434 billion to PhP957.1 billion due to the strong performance of the following core subsidiaries:

  • URC’s total revenues increased by 24.4% from PhP210 billion to PhP28.6 billion for the first quarter of 2015, with sales contribution from Griffin’s NZ which was
    consolidated starting mid-November of 2014 upon closing of the acquisition.
  • Cebu Air’s total revenues went up by 20.7% from PhP1.8 billion to PhP142 billion for the 1st three months of 2015.
  • RLC’s total revenues also increased by 20.1% from PhP4.1 billion in 2014 to 94.9 billion in 2015.
  • JG Petrochem’s revenue, including that from Olefins, significantly increased to PhP52 billion as it commenced operations in November 2014.

Revenues from core investments, however, declined this period compared to same period last year as dividend income received by the Group dropped by 23.3% from PhP2.1 billion last year to PhP1.6 billion for the first quarter this year mainly due to lower dividends declared by PLDT for the period. Equity in net earnings of associates, primarily from investments in UIC and Meralco, increased from PhP1 .6 billion for the 1st quarter of 2014 to PhP1.7 billion in the 1st quarter of 2015.

The Group’s operating expenses increased by 22% from PhP7.6 billion last year to PhP93 billion in the same period this year due to higher selling, general and administrative expenses in the airline and food business units. As a result, Operating Income or EBIT went up 25.5% from 139.3 billion to PhP1.7 billion.

As of March 31, 2015, the Company’s balance sheet remains healthy, with consolidated assets of PhP561.7 billion from PhP558.8 billion as of December 31, 2014. Current ratio stood at 1.34. The company’s indebtedness remained manageable with a gearing ratio of 0.69:1 and net debt to equity of 0.51:1 as of March 31, 2015. Stockholders’ equity, excluding minority interest, stood at PhP222 billion as of March 31, 2015 from PhP207.6 billion as of December 31, 2014.

Universal Robina Corporation (URC) generated a consolidated sale of goods and services of PhP28.6 billion for the first quarter ended March 31, 2015, a 24.3% sales growth over the same period last year. Sale of goods and services performance by business segment follows: (I) URC’s branded consumer foods segment, excluding packaging division, increased 24.9%, to PhP214 billion for the first quarter of 2015 from PhP18.8 billion registered in the same period last year. Domestic operations posted a 14.6% increase in net sales from PhP12.9 billion for the first quarter of 2014 to PhP14.8 billion in for the first quarter of 2015 due to strong performance of its beverage division mainly coming from coffee and snack foods division due to growth across salty snacks, bakery and chocolate segments. BCFG international operations reported a 47.9% increase in net sales from PhP5.8 billion for the first quarter of 2014 to PhP8.6 billion for the first quarter of 2015. Top line growth came from Thailand, Indonesia and Vietnam. Thailand posted double digit growth despite a relatively weak macro environment and consumer sentiment backed by core brands, new products launches and continuation of promotional activities, Indonesia’s growth was driven by strong sales of potato chips and chocolates while Vietnam continued to recover on the back of robust sales of RTD beverages, C2 and Rong Do. The Group started consolidating Griffin’s into URC International starting mid-November upon closing of the acquisition. Agro-Industrial segment amounted to PhP2.2 billion for the first quarter of 2015, a 6.1% increase from PhP2.1 billion recorded in the same period last year. Feeds business increased by 14.6% due to increase in sales volume as a result of effective sales strategy while farms business remained flat. Sale of goods and services in commodity foods segment amounted to PhP2.8 billion for the first quarter of 2015, a 39.9% increase year-on-year. Sugar business increased by 83.9% due to higher sales of raw and refined sugar as a result of higher production and addition of distillery operations while flour business
slightly declined by 3.5% due to higher wheat prices.

URC’s core earnings before tax (operating profit after equity earnings, net finance costs and other expenses – net) for the first quarter of 2015 amounted to PhP4.1 billion, an increase of 10.6% from PhP3.7 billion recorded in the same period last year. Net income attributable to equity holders of the parent slightly dropped 3.8% to PhP3.2 billion for the fist quarter of 2015 from PhP3.3 billion for the first quarter of 2014 as a result of the factors discussed above. URC reported an EBITDA (operating income plus depreciation and amortization) of PhP5.6 billion for the first quarter of 2015, 20.6% higher than PhP4.6 billion posted for the first quarter of 2014.

Robinsons Land Corp. (RLC) consolidated net income attributable to equity holders of the Parent company for the period ended March 31 amounted to PhP1.4 billion, up by 23.8%. EBIT and EBITDA rose by 27.1% and 22.9% to PhP1.9 billion and PhP2.6 billion, respectively, for the three months ended March 31, 2015. The Commercial Centers Division contributed 46% or PhP2.3 billion of RLC’s gross revenues, posting a 10.6% growth. RLC’s Residential Division contributed 34% or PhP1.7 billion, a growth of 30.9% versus last year’s PhP1.3 billion. The Office Buildings Division contributed 11% or PhP524 million of the RLC’s revenues, up by 42.8% from last year’s PhP367.0 million largely due to the new office buildings Cyberscape Alpha and Beta. The Hotels Division contributed 9% or PhP439.7 million to RLC’s revenues, up by 12.6% due to the new Go Hotels Iloilo, Go Hotels Ortigas and Summit Magnolia Hotel, among others.

Cebu Air Inc. (Cebu Pacific) generated gross revenues of PhP142 billion three months ended March 31, 2015, 20.7% higher than the PhP11.8 billion revenues earned in the same period last year mainly attributed to the increase in passenger revenues by 22.2% to PhP10.8 billion. This increase was mainly attributable to the 13% increase in passenger volume to 4.3 million from 3.8 million in 2014, driven by the increased number of flights in 2015. Number of flights went up by 14.3% year on year as the Group added more aircraft to its fleet from 51 aircraft as of March 31, 2014 to 55 aircraft as of March 31, 2015. Increase in average fares by 8.1% to PhP2,525 for the three months ended March 31, 2015 from PhP2,336 for the same period last year also contributed to the improvement of revenues. Cargo revenues grew 13.6% to PhP772.5 million while Ancillary revenues went up by 17% to Php2.6 billion in the three months ended March 31 2015. CEB incurred operating expenses of PhP1.4 billion for the three months ended March 31, 2015, slightly higher by 1% than the PhP11.3 billion operating expenses recorded for the three months ended March 31, 2014 driven by the Group’s expanded long haul operations and growth in seat capacity from the acquisition of new aircraft, offset by the substantial reduction in fuel costs compared to the same period last year due to the sharp decline in global jet fuel prices. International flights increased by 10.5% year on year with the launch of long haul operations to Kuwait, Sydney and Riyadh in the latter part of 2014. Net income for the three months ended March 31, 2015 significantly increased to PhP2.2 billion from PhP164.2 million in the same period last year.

JG Summit Petrochemicals Corporation and JG Summit Olefins Corporation
(JGSPC and JGSOC) gross revenues reached 115.2 billion for the three months ended March 31, 2015, this already includes revenues from the Olefins operations, compared to last year’s PhP202.5 million as commercial operations resumed alter completing its plant expansion and rehabilitation in March 2014. JGSOC started commercial operations in November 2014. Costs and expenses consequently increased from PhP217.5 million in 2014 to PhP6.2 billion in 2015. Interest expense also reached PhP18.6 million for the three months ended March 31, 2015 from PhP4.3 million in 2014 due to higher level of trust receipts for both Petrochem and Olefins for the first quarter of 2015 compared to the same period last year. A net foreign exchange loss of PhP97.4 million was recorded for the three months ended March 31, 2015 from a net gain of PhP22.2 million for the same period last year. All these factors contributed to a higher net loss for the three months ended March 31, 2015.
Robinsons Bank Corporation generated banking revenue of PhP721.2 million for the first quarter of 2015, a 19.6% increase from last year’s PhP602.8 million brought about by higher interest income and commission income for the period. A net trading gain has been recognized for the first quarter of 2015 amounting to PhP345 million compared to a net trading loss in the same period last year amounting to PhP15.7 million. Net earnings slightly dropped to PhP28 million for the three months ended March 31, 2015, from last year’s net income of PhP30.7 million as the bank recorded higher final taxes related to higher volume of transaction on government securities during the period.
Equity in net earnings of associates companies and joint ventures amounted to PhP1.7 billion for the first three months of 2015, a 5.1% increase from last year‘s PhP1.6 billion. The equity earnings from Meralco increased 5.3% from PhP1.09 billion last year to PhP1.14 billion in the same quarter this year. Equity income from UIC increased 33.5% from PhP479.1 million last year to PhP639.4 million for the first quarter of 2015 as UIC recorded a 39.3% growth in its net income from operations to PhP60.8 million for the same period in 2015 mainly due to higher trading property and increased share of Singapore Land’s operating profit as a result of UIC’s increased interest in Singapore Land. Since the Group’s policy for the valuation of property, plant and equipment is the cost basis method, the equity income taken up by the Group represents the adjusted amounts after reversal of the effect in the income statement of the revaluation of the said assets.

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