MANILA, Philippines — JG Summit Holdings Inc. reported a 26.3 percent drop in net profit for the first half of 2011 to P5.98 billion from P8.10 billion for the same period last year.
The firm said in a disclosure to the Philippine Stock Exchange that the lower earnings is due to the reduction in its share in the profits of its airline business, Cebu Pacific, to 67 percent following Cebu Pacific’s IPO in October 2010, where the Group sold 33 percent of its ownership in Cebu Pacific.
The Group also recorded lower market valuation gains on its financial assets as the capital markets have seen volatility during the period.
Core earnings decreased 15.2 percent for the six months from P11.45 billion in 2010 to P9.71 billion during the period, while EBITDA reached P18.0 billion, a 5.6 percent decrease compared to the same period last year.
Consolidated revenues were up 15.0 percent from P61.11 billion to P70.26 billion due to the strong performance of all business units.
“Only our equity in net earnings of associates showed a decline by 38.2 percent to P1.18 billion during the period,” JG Summit said.
Consolidated cost of sales and services for the first half of the year increased 27.4 percent from P33.61 billion last year to P42.82 billion, higher than the revenue growth, as input costs of the food business have increased substantially.
The aviation fuel expenses incurred by Cebu Pacific also rose significantly due to the increase in fuel prices and higher volume of fuel consumed.
Consolidated operating expenses increased 16.2 percent as a result of higher general and administrative expenses in its telecoms, increased airline operations and food business.
Mark-to-market gains on financial assets recognized during the first half of fiscal 2011 amounted to P414.52 million, 47.6 percent lower from last year’s P790.93 million mainly due to decline in market values of bond and equity investments for the period.
Foreign exchange gain net recorded for the six months of 2011 amounted to P211.99 million compared to last year’s net foreign exchange loss of P407.34 million mainly due to a more stable peso during the period this year compared to last year’s.
Interest income for the six months of 2011 increased 55.6 percent from P865.81 million to P1.35 billion due to higher average investment portfolio during the period as compared to last year’s.
Equity earnings from associated companies and joint ventures dropped mainly due to lower income recorded by UIC this year, from S$169.52 million last year to S$102.58 million this year due to recognition of lower gain on sales of residential properties from S$508.54 million to S$170.12 million during the period.
By JAMES A. LOYOLA
http://www.mb.com.ph/
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