JG Summit books P694-M losses in 2008
By JUDITH BALEA, abs-cbnNEWS.com | 04/16/2009 6:35 PM
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The weak peso and volatility in the financial markets badly hit conglomerate JG Summit Holdings Inc., which booked a net loss of P694 million last year.
The Gokongwei-owned company recorded a P2.93 billion foreign exchange loss after translating the value of its dollar-denominated assets and liabilities using a devalued peso at the close of 2008. It also posted mark-to-market losses of P7.05 billion, with the erosion of the market values of its financial assets and fuel hedges due to the financial crisis.
Nevertheless, JG Summit's core earnings before taxes rose 59 percent from P5.70 billion in 2007 to P9.07 billion in 2008, owing to a 29 percent increase in revenues.
"We accept the intrinsic value of the new standards of mark-to-market accounting for enterprise risk management. We focus more on maintaining the resilient strength of the operating fundamentals of the businesses of the group, which is more important in the longer term," president and chief operating officer Lance Gokongwei said in a statement.
Consolidated revenues grew 29 percent to P99.87 billion while gross income increased by a smaller 18 percent to P34.84 billion, as a result of substantial increases in input costs in the food, property, airline, and petrochemical businesses.
JG Summit kept expenses under tight control, leading to a higher growth in operating income of 76 percent to P11.21 billion. Financing costs and other charges incurred in 2008 also dropped 7.8 percent due to lower average interest rates offsetting the effects of the depreciation of the peso.
JG Summit is the parent firm of food and beverage unit Universal Robina Corp., property firm Robinsons Land Corp., mobile phone operator Digital Telecommunications, airline operator Cebu Air, Inc., and JG Summit Petrochemical Corp.
Universal Robina Corp. posted a 93 percent drop in net income from P5.56 billion to P381 million for the fiscal year ended September 30, 2008.
Property developer Robinsons Land Corp., on the other hand, ended its fiscal year with earnings of P3.15 billion, up 29 percent from P2.44 billion, thanks to the strong growth in its residential sales and rental income from malls and office buildings.
After accounting for forex and mark-to-market losses, Digital Telecommunications Philippines Inc. and budget airline Cebu Pacific registered net losses of P1.98 billion and P3.26 billion, respectively.
