Vol. XXII, No. 15-A
Saturday, August 16, 2008 | MANILA, PHILIPPINES
GOKONGWEI HOLDING firm JG Summit Holdings, Inc. saw its net income drop by almost 90% in the second quarter as a result of a mix of foreign exchange losses and higher expenses.
In a disclosure to the local bourse, the company, which has businesses in air transport, property, food, telecommunications, and petrochemicals, said profits fell to around P326 million in the second quarter from almost P2.8 billion the year before.
"The weakening peso against the US dollar, rising fuel costs, which affected our gross profit, and volatile capital markets took its toll on the group’s revenues and bottomline," the company said in a statement.
JG Summit’s total revenues for the quarter grew by only 3.1% to P22.78 billion, while total expenses grew by almost 24%.
Telecommunications unit Digital Telecommunications Phils., Inc., operator of the mobile brand Sun Cellular, posted an almost seven-fold increase in net losses for the first half, as high operating expenses ate up revenues.
Meanwhile, JG Summit’s budget airline, Cebu Pacific, suffered from high operating expenses due primarily to fuel. The 24.3% increase in revenues to P7.55 billion was wiped out by an 84% increase in fuel expenses for the first six months, bringing total expenses to P8.19 billion or 40% higher than last year.
This resulted in a net loss of almost P16 million for the period, compared to profits of more than P2 billion last year.
Food unit Universal Robina Corp. managed to remain in the black, with profits down by 88% in the first semester to P497.2 million because of higher foreign exchange losses and mark-to-market losses in bond and securities holdings due to the general drop in bond and securities prices worldwide, as well as higher taxes.
Profits of the holding firm’s property arm, Robinsons Land Corp., reached P1.46 billion, a fifth higher from last year.
Meanwhile, JG Summit Petrochemicals Corp. narrowed losses to P100 million this year from P434 million last year. — K.J.R. Liu
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