JG SUMMIT INCOME PLUNGES 70%;
FIRST GEN, 80%; METROBANK, 24%
[ Malaya.com.ph ] August 18, 2008
Profits of the country’s largest conglomerates keeled over during the second quarter, hit by the weaker peso, higher financing charges and rising operational costs due to skyrocketing fuel prices.
Rising prices also saw consumers conserving electricity, cutting down on eating out which led to lower income growth for Manila Electric Company and Jollibee Corp.
First Gen of the Lopez Group was the biggest loser with profits tumbling 80 percent followed by JG Summit Holdings Inc. of the Gokongwei family. The largest commercial bank, Metrobank, was not spared either, reporting a 24 percent drop in income.
Other conglomerates which reported lower incomes in earlier reports were Bayan Telecommunications, Security Bank, Ayala Corp. and Jollibee.
JG Summit’s forex losses ballooned to P2.64 billion as it repriced dollar denominated loans, compared with gains of P2.5 billion last year. Trading losses also reached P1.28 billion from P1 billion gains in 2007.
Net income dropped to P1.16 billion compared to a P3.91 billion in 2007.
"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.
Core net earnings however remained strong with a 148.8 percent increase to P3.85 billion, it said. Consolidated revenue was up 6.6 percent at P44.89 billion form P42.1 billion.
Universal Robina Corp.’s bottomline was down 87.9 percent at P497.2 million; Digitel posted a net losses of P2.04 billion owing; and Cebu Air Inc. posted a loss of P15.66 million.
Digitel’s loss "foreign exchange and market valuation" losses, while Cebu Pacific was hit by the surge in high oil prices.
Robinsons Land Corp., meanwhile had its income increase by 19.67 percent to P1.46 billion P1.22 billion in 2007.
JG Summit Petrochemicals has also reduced its net loss at P100.14 million from P434.17 million, on higher sales reaching P4.35 billion from P1.37 billion.
JGS Summit president Lance Y. Gokongwei earlier expressed expectation of more foreign exchange losses due to the peso’s devaluation and the high oil prices.
Gokongwei said JG Summit posts a P1 billion mark-to-market loss for every P1 depreciation to the dollar.
First Gen Corporation (First Gen) said first half profits feel to P19.3 billion, 77 percent less than last year. The company had to contend with higher interest rates on the loan it took to buy Energy Development Corp.
Meanwhile sister company, Manila Electric Co. reported revenues dropped one percent in the second quarter to o P6.97 billion, from P7.04 billion in the same period last year.
Total revenues dropped 17 percent to P49.1 billion in the second quarter compared to the same period in 2007. Likewise for the six-month period, revenues decreased by 13 per cent from P107.39 billion to P92.75 billion
Energy sales for the second quarter of 2008 rose 1.6% to 6,911.8 gwh compared to the same period last year. The commercial and industrial segments performed strongly, offsetting the decline in energy sales of the residential segment. This quarter’s increase, however, was lower than the 4.6% growth posted in the second quarter of 2007 due to the effects of inflationary pressures, lower temperature and interruptions caused by typhoon Frank on June.
Metropolitan Bank & Trust Co. reported net income for the first half of the year dropped to P2.8 billion, 24.3 percent lower than the P3.7 billion in the same period last year.
Total operating income for the first six months grew 11.7 percent to P20.4 billion on the back of a 0.9 percent growth in net interest income to P10.6 billion, and a 20.5 percent increase in non-interest income to P9.8 billion.
But income from trading, securities and forex contracted by 57.9 percent to P1.4 billion due to rising inflation and interest rates.
Consolidated operating expenses grew 26.8 percent year-on-year to P13.5 billion, mainly from the consolidation of the power generation subsidiary.
However, Metrobank said that parent company expense growth was modest at 5.3 percent to P8.2 billion.
"(We) will continue to put a tight lid on cost and expenses to mitigate the weakness in revenues brought about by lower trading and forex gains," Metrobank comptroller Joshua Naing stated.
Metrobank’s total resources increased by 9.4 percent to P732.2 billion.
"We expect loan growth to be moderate for the rest of the year owing to short-term concerns on the economy and volatile commodity prices," Metrobank president Arthur Ty said.
