Saturday, 27 June 2009

Philippines' JG Summit sees sees up to 30% revenues, cash growth

RECESSION? COMPANY EXPECTS A RECORD YEAR
D.G.K. Carreon
BusinessWorld
http://www.bworldonline.com/BW062709/content.php?id=042

Gokongwei-led JG Summit Holdings, Inc. projects revenues and cash flow to climb between 15% and 30% in 2009 due to the steady growth of its four core businesses.

After the company’s stockholders’ meeting Friday, JG Summit President and Chief Operating Officer Lance Y. Gokongwei told reporters that without mark-to market losses, the firm would have a banner year.

"If we freeze day-to-day fluctuations in fuel prices, foreign exchange rates and the value of financial assets, we would have a record year," he said.

Mr. Gokongwei said during his presentation of the firm’s 2008 performance that JG Summit remains focused on its core businesses — food and beverage, airlines, property development and telecommunication — to sustain growth.

In 2008, JG Summit’s revenues jumped by 29.1% to P99.87 billion, while pre-tax earnings reached P25.11 billion. Despite these, the firm still incurred losses due to mark-to-market and foreign exchange charges.

Mr. Gokongwei said the firm has programmed P28 billion in capital expenditures for 2009, lower than P33.4 billion last year.

"The reduction [of the budget] is on the food side ... [Universal Robina Corp.] slowed down [on spending] because of the completion of the sugar refinery last year," he said.

JG Summit has allocated P12 billion for Digital Telecommunications Philippines, Inc., P7 billion for Robinsons Land Corp., P5 billion for budget carrier Cebu Pacific, and P3 billion for Universal Robina. The rest will be distributed between the petrochemical and financial services subsidiaries.

Mr. Gokongwei said Universal Robina, JG Summit’s top revenue and cash flow source, would continue to do well, but admitted that the market for snacks and beverage is weakening due to the early arrival of rains and the influenza A(H1N1) scare.

"The rains during the summer affected beverage sales ... Also, all these delays in school openings [due to the flu scare] are also affecting snack sales. Kids don’t have allowance [so there are lesser buyers]," he said.

The JG summit chief said Universal Robina’s overseas expansion is continuing, with plans to introduce a third beverage line in Vietnam soon.

Mr. Gokongwei also said crowds in the Robinsons malls have not yet thinned despite the recent news of the flu spread.

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