Pandemic bites into profits of JG Summit and DMCI

posted May 14, 2020 at 09:20 pm by Jenniffer B. Austria

https://manilastandard.net/business/corporate/323736/pandemic-bites-into-profits-of-jg-summit-and-dmci-.html

Conglomerates JG Summit Holdings Inc. and DMCI Holdings Inc. reported lower first-quarter earnings because of the impact of the novel coronavirus pandemic on overall businesses.

JG Summit said in a disclosure to the stock exchange first-quarter core net income declined 19 percent to P4.3 billion from a year ago as revenues went down to P67.9 billion.

DMCI Holdings said it recorded a 78-percent decline in first-quarter earnings to P616 million from P2.7 billion a year ago as all businesses delivered weak performances during the period.

JG Summit said that while property and banking businesses delivered positive growth in the first quarter, food manufacturing business posted flat top line while petrochemical and airline businesses registered significant decline in revenues.

It said that excluding non-recurring items such as foreign exchange and market valuation losses and JG Summit’s P905-million share in Meralco’s impairment loss from its PacificLight Power investment, net income declined by 70.5 percent in the first three months to P1.9 billion from P6.45 billion.

“Coming from a strong performance in 2019, the unexpected turn of events driven by the evolving global pandemic started to have a material impact to the JG Summit group in the first quarter of 2020. This includes travel restrictions early in the year that affected our airline, Cebu Pacific, and the stricter social distancing measures mid-March has further resulted in the closure of RLC’s malls and hotels, disruption in URC’s supply chain and delays in our Petrochemical plant expansion,” JG Summit president and chief executive Land Gokongwei said.

He said that in line with the “new normal”, the group started the process of accelerating its digital transformation to deliver value and improve customer experience and provide a digital workplace for employees.

Meanwhile, DMCI Holdings said that excluding a non-recurring loss of P414 million in the first quarter because of sales cancellations for a DMCI Homes project in Davao City and a net loss of P91 million representing the company’s share in the accelerated depreciation of Calaca Units 1 and 2 last year, core net income dropped 64 percent from P2.8 billion to P1 billion.

“Our consolidated results were weighed down by operational headwinds, low market prices and the initial effects of the enhanced community quarantine,” said DMCI Holdings chairman and president Isidro Consunji.

“We expect the succeeding quarters to be even more challenging because of the full impact of the coronavirus containment measures,” he said.

Core net income contributions from Semirara Mining and Power Corp. contracted 51 percent from P1.3 billion to P623 million, owing to a 16-percent drop in average coal prices and a 27-percent decrease in average electricity prices.

DMCI Homes posted a first-quarter net loss of P197 million following a slowdown in revenue recognition due to timing of collections and lower construction accomplishments as a result of the ECQ.