JG Summit sets 13­-15% profit guidance

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JG Summit Holdings Inc., the listed conglomerate of the Gokong–wei family, expects its core net income to grow by 13 percent to 15 percent this year, driven by the snack food and airline businesses and the resumption of operations of the petrochemicals group.

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“I think we view our most important number as our core net income. Last year was about P20.3 billion. We don’t really give forecasts for JG Summit, but I think we’re probably expecting double digit growth . . . low- to mid-teens,” Lance Gokongwei, JG Summit president and chief operating officer, told reporters after the firm’s annual stockholders’ meeting late Wednesday.

The snack food and beverage business of subsidiary Universal Robina Corp. (URC) is like deliver a strong performance this year on the back of joint ventures in Southeast Asia, Gokongwei said, citing the P21- billion acquisition of New Zealand Snack Food Holdings Limited (NZSFHL) last November, a move aimed at consolidating Griffin’s Food Limited into the URC’s branded consumer foods segment.

“Our guidance [for URC]is in the low 20 [percent]increase in sales and mid-20 [percent]in operating income. Part of that is driven by the acquisition of Griffin’s,” Gokongwei said.

“With Griffin’s, we are addressing the growing middle class . . . New Zealand is the healthiest choice of food, and with that we are developing a business plan and strategy to translate Griffin’s as a premium brand in the Asean market,” he added.

JG Summit is also looking at top line growth for Cebu Air Inc.—the operator of budget carrier Cebu Pacific—because of its remarkable performance in the first quarter.

Cebu Air posted a net income of P2.2 billion in January to March from P164.2 million on-year. Gross revenues rose by 20.7 percent to P11.8 billion, as passenger revenues increased by 22 percent to P10.8 billion on higher passenger volume and number of flights.

Robinsons Land Corp. is also in line with the five-year plan of doubling it net income from P4.73 billion in fiscal 2014 ending in September.

The property developer intends to grow its recurring income from new office towers and launches in the next four years, aside from new mall openings.

Summit Petrochemical Corp. resumed operations in November last year, and is expected to post modest contributions to group income starting this year, while Robinsons Bank Corp. is on an expansion binge in the next three to four years.

Airport PPPs
Asked if the group is keen on future projects under the public-private partnership (PPP) scheme, Gokongwei said JG Summit is interested in bidding for airport projects. “If there’s anything to be bid out, I think our preference would probably be on the airport side.

“With our familiarity with the airline business, retail business project management, I think we’ll look at every opportunity as it arises. So I can’t discount and say we are bidding for this or we’re not gonna bid for this… We’ll look at each opportunity as it arises,” Gokongwei said.

In the past, JG Summit bought pre­bid documents for the five regional airport PPP that the government bundled into two projects to attract more investors.

“I think we have to look at each opportunity as it comes. So I think these PPPs are certainly attractive assets as you can see from the recent bids. We have to evaluate them as they come,” Gokongwei said.

Aside from JG Summit, Metro Pacific Investments Corp., San Miguel Corp., GMR­Megawide Group, Philippine Skylanders, Aboitiz Group, and Tokyo-based Sojitz Corp. are interested in the airport project.

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