JG Summit Holdings Inc., one of the Philippines’ leading conglomerates, posted a 36-percent year-on-year surge in revenues to P312.4 billion in 2022, surpassing its pre-pandemic level and hitting a new record high.
The agile efforts of its consumer-facing businesses delivered double-digit topline growth on the back of a reopening economy.
Despite the margin pressures from unprecedented levels of fuel and commodity prices, such strong revenue performance plus the group’s cost-saving programs translated to significant profit improvements in most of its strategic business units.
This was most evident in JGS’ air transport subsidiary, which also benefitted from relaxed travel restrictions. Meanwhile, its petrochemical unit’s new product lines cushioned the adverse impact of subdued industrial demand globally.
Including the portfolio management gain that the parent company realized from the sale of some of its Meralco shares, JGS registered a two-fold increase in core net income to P6.2 billion in 2022.
Incorporating the impact of the 9-percent year-on-year devaluation of the peso on the group’s US dollar-denominated debt, consolidated full-year 2022 net income settled at P0.7 billion. This was lower than the reported 2021 net income of P5.1 billion, which had P6.0 billion of gains and contributions from its food manufacturing arm’s discontinued Oceania operations.
The group’s balance sheet provides enough financial flexibility to support further growth and weather any headwinds amid a highly volatile global landscape. As of year-end 2022, JG Summit’s consolidated gearing and net D/E ratios remained healthy at 0.77 and 0.56, respectively.
Meanwhile, the parent company’s higher dividend inflows and the proceeds of the Meralco share sale enabled it to accumulate sufficient cash for its $750-million debt maturity in January 2023.
JG Summit concluded 2022 with 22-percent lower parent net debt amounting to P55.2 billion, and it was also able to settle the aforementioned dollar bond early this year without need for refinancing.
“2022 was the start of our pivot back to growth with the reopening of the economy and the lifting of most mobility restrictions. We experienced a surge in consumption which drove the strong demand for our products and services across our food, real estate and airline businesses. The demand was sustained throughout the year, this against the backdrop of significant inflation — with the volatility driven by the weaker peso and higher prices of oil & soft commodities,” said JG Summit president and chief executive Lance Gokongwei.
“We have been very proactive in addressing this issue with the objective of protecting and preserving our margins via carefully considered direct and indirect price adjustments, and the implementation of cost savings and productivity initiatives across our different business units,” he said.
“We continue to remain cautiously optimistic in 2023 given the lingering geopolitical and global economic risk. With inflation forecasted to slowly ease out on a sequential basis, we are hopeful that domestic consumption will remain buoyant while we expect to benefit from the reopening of China in our airline and petrochemicals businesses,” Gokongwei said.
