CONGLOMERATE JG Summit Holdings Inc. may spend lower capital expenditures this year as there will be no major spending in 2015 with the completion of its naphta-cracker plant last year.
Bach Johann Sebastian, the company’s senior vice president, said the company may spend P35 billion for the year or almost the same spending in 2012 mainly for its main businesses that spans from airline operation to food manufacturing.
“Our naphta cracker plant is already operational so it is already booking revenue though not yet 100 percent,” Sebastian said at the sidelines of the Latham and Watkins annual investment forum.
Last year JG Summit said it spent P44.2 billion primarily for its property development and airline units.
The holding firm of the Gokongwei family allotted some P16 billion for Robinsons Land Corp. and P14.1 billion for Cebu Air Inc., the operator of Cebu Pacific, country’s largest airline.
The company is also allotting P9 billion for food group Universal Robina Corp.; P5 billion for petrochemical arm; and P100 million for Robinsons Bank.
In 2012 the company spent some P35.9-billion capital expenditures, the bulk of which were also for its property and airline units.
Sebastian said the company is also fixing its accounting to align all of its units to report using the calendar year instead of the fiscal year.
At the moment, JG Summit is reporting using the calendar year ending December but its property unit and food group Universal Robina Corp. both report on a fiscal year ending September.
Sebastian said the company may not raise some funds this year for service its maturing debts.
“Our next maturity is in 2018 so we will not raise funds unless we are entering new markets this year or acquire another company,” Sebastian said.
JG Summit’s net income fell during the third quarter as a result of foreign-exchange losses, but its major businesses continue to perform well.
The company said its net income during July to September quarter to P4.14 billion, a drop of about 12 percent from last year’s P4.69 billion.
Foreign-exchange losses ballooned to P1.89 billion, from last year’s P117.97 million. For the nine-month period, its foreign exchange losses rose to P4.12 billion—or almost the same amount of its third quarter income—from last year’s P2.99 billion.
Its profit for the nine-month period, however, still grew by 65 percent to P21.97 billion, from last year’s P13.33 billion as a result of its strong performance during the previous months.
JG Summit’s core net income, which strips out the effect of extraordinary items such as foreign-exchange losses, rose 37 percent to P15.02 billion, from P10.96 billion last year.