GOKONGWEI-LED JG Summit Holdings, Inc. expects a rebound after shutting down its loss-making petrochemical business.
“We are confident that the decision to shut down our petrochemical plant will help improve the group’s overall consolidated results,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said during the conglomerate’s annual stockholders’ meeting on Thursday.
JG Summit previously said its petrochemicals unit, JG Summit Olefins Corp. (JGSOC), will remain on a prolonged shutdown for at least two years due to market challenges in the global petrochemical industry. JGSOC ceased production in January.
Mr. Gokongwei said all of JGSOC’s debts have been transferred to JG Summit, adding that the conglomerate will focus on preserving the assets in the Batangas plant complex while evaluating strategic options for the petrochemicals business.
He added that JGSOC will also rationalize its manpower following the prolonged shutdown.
“In light of this, we have instituted an employee care program to aid affected individuals in this transition,” he said.
For the first quarter, JG Summit posted a 61% drop in net income to P4.3 billion. JGSOC logged a P3.3-billion loss for the period due to non-recurring costs incurred to facilitate the shutdown.
Moving forward, Mr. Gokongwei said the conglomerate will accelerate the growth and expansion of its food and property businesses, led by Universal Robina Corp. (URC) and Robinsons Land Corp. (RLC), respectively.
“In our food business, we will accelerate volume growth and capitalize on improving consumer sentiment while protecting ourselves against the cost pressures from rising coffee and cocoa prices. On property, we will sustain the expansion of our investment portfolio and drive profitability amidst the challenged residential sector,” he said.
Mr. Gokongwei is also expecting a boost from its airline unit, Cebu Air, Inc., driven by increased travel during the summer season.
“Compared to the previous year, cheaper oil prices, a stronger peso, lower interest rates, and easing inflation all bode well for our businesses,” he said.
Meanwhile, URC President and Chief Executive Officer Irwin C. Lee expects to sustain the food and beverage manufacturer’s momentum amid improving consumer sentiment.
“We are benefiting from more positive consumer sentiment in the Philippines, with easing inflation,” Mr. Lee said during URC’s annual stockholders’ meeting, also on Thursday.
“Our expectation is for this momentum to continue and actually accelerate the interventions that we’re seeing from the business units from past year, carrying forward into 2025 are bearing fruit,” he added.
However, Mr. Lee noted that challenges could affect the company’s growth this year, such as high prices of commodities like coffee and cocoa, as well as tariff-related uncertainties.
“Nevertheless, we are prepared to counteract any measures and any slowdowns. And the businesses are gearing up for continued strong growth momentum for the balance of 2025,” he said.
URC booked a 2% decline in first-quarter net income to P4.3 billion due to last year’s higher foreign exchange gains.
On Thursday, JG Summit shares fell by 4.13% or 76 centavos to P17.62 apiece, while URC stocks were unchanged at P91.95 per share. — Revin Mikhael D. Ochave
