1h 2019 unaudited results investors briefing › docs › 2019 › 05 › jgs 2q2019... ·...

1H 2019 UNAUDITED RESULTSINVESTORS BRIEFING

Mike LiwanagSenior Vice President

Lance GokongweiPresident and CEO

Agenda

2

1H 2019 Unaudited Results1

Business Updates, Plans and Prospects2

63.5 67.0

37.8 44.7

13.1 14.7 21.2 18.6 2.7 3.9 144.4

158.4

0

20

40

60

80

100

120

140

160

1H18 1H19URC CEB RLC Petrochem Banks Others

JGS: Better SBU earnings growth and UIC’s gain on acquisition drove record Php10B net income in 2Q19

3

• Faster Q2 revenue growth was mainlydriven by the acceleration in CEB, RLC andRbank, as well as UIC’s gain on acquisition

• URC’s margin improvement, CEB’s betteryields and cost management, Rbank’s widerNIMs and RLC’s operational efficiencies ledto the significant increase in core netincome for the quarter

• Q2 net income was boosted by mark-to-market & forex gains, as well as UIC’s gain onits acquisition of additional stakes in MarinaCentre Holdings and Marina Mandarin Hotel*attributable to equity holders of the parent

Revenues, +10% Core net income after taxes, +11%Segment Breakdown (in billion pesos)

+6%

+18%

+13%

-12%

+42%+55%

% chg vs SPLY

2.6 3.1

2.4 4.6 2.0

2.4 1.6

(1.4)

3.6 4.7 12.3

13.4

-202468

10121416

1H18 1H19

+18%

+92%

+20%

-187%

+31%

% chg vs SPLY

2019 excludes PFRS16 adjustments while 2018 was restated for PFRS9&15 to achieve comparability

+65%

In billion pesos Growth (%) vs SPLY

1Q19 2Q19 1H19 Q1 Q2 1H

Revenues 76.3 82.2 158.4 +9% +11% +10%

Core net income after taxes

6.2 7.4 13.6 -2% +24% +11%

Net income 7.4 10.1 17.6 +54% +102% +79%

+3%

+20%

+19%

-16%

+45%+97%

+9%

+16%

+7%

-8%

+40%+14%

1Q 2Q 1H

+11%

+184%

+22%

-178%

+169%

+73%

+26%

+28%

+20%

-194%

-30%

+45%

1Q 2Q 1H

URC: Margin expansion driven by Branded Consumer Foods Group

4

Revenue

Net Income • Q2 topline growth was led by the continuedstrength in BCF Philippines, slightly temperedby the decline in AIC given the differentphasing of external sugar sales

• Margins improved across most divisionsdriven by better volumes & average sellingprices (ASP) in BCF Philippines, as well as therecovery in Vietnam

48%

30%

22%

Revenue Breakdown, 1H2019

Branded ConsumerFoods Philippines

Branded ConsumerFoods International

Agro-Industrial &Commodities

-4%

+10%

+12%

% chg vs LY

In PHP Billions

30.7 33.3

32.8 33.7

63.5 67.0

2018 2019

3.0 3.0

1.9 2.2

4.85.2

2018 2019

+9%

+3%

+6%

+3%

+16%

+8%

Q1 Q2 1H


5

Revenue

Net Income• Increase in passenger traffic and average

fares, as well as higher ancillary take-up perpassenger drove revenue acceleration in Q2

• Net income significantly grew on the strong revenue growth, lower average jet fuel prices and successful cost management

18.3 21.2

19.623.5

37.844.7

2018 2019

CEB: Triple-digit profit growth sustained

75%6%

19%


Passenger

Cargo

AncilliaryRevenue

% chg vs LY

In PHP Billions

Q1 Q2 1H

+16%

+20%

+18%

1.43.4

1.9

3.9

3.3

7.3

2018 2019

+138%

+108%

+121%

+7%

+18%

+24%


46%

16%

7%2%

32%


Malls

Offices

Hotels

IID

Residential

6

Revenue

Net Income » 2Q topline was driven by the robustperformance of malls, offices and hotels,faster growth in residential and another saleof land to our third joint venture partner

» Margins expanded as a result of slowergrowth of overall cost of sales and OPEX, andsignificant increase in interest income for theperiod

6.3 6.8

6.78.0

13.114.7

2018 2019

1.5 1.8

1.82.2

3.34.0

2017 2018

+11%

+29%

% chg vs LY

+11%

RLC: Solid performance across all divisions

+369%

In PHP Billions

+5%

Q1 Q2 1H

+7%

+19%

+13%

+19%

+22%

+20%


Petrochem: Net loss due to lower ASP and higher interest expense

7

» Lower revenues in Q2 due to lower averageselling prices YoY, brought about byincreased market volatility, weak demandand oversupply

» Net loss in Q2 as average selling prices fellfaster than naphtha cost, and as interestcosts rose on higher trust receipts.

SALES VOLUME (MT) 1H18 1H19 %chg

*C2 (Ethylene) 29,041 25,567 -12%

*C3 (Propylene) 12,274 6,345 -48%

Pygas 108,958 113,936 5%

Mixed C4 53,540 46,995 -12%

PE 124,431 138,949 12%

PP 81,665 78,135 -4%

TOTAL 409,909 409,927 0%

*After eliminations

10.4 9.6

10.79.0

21.218.6

2018 2019

0.8

-0.7

0.8

-0.6

1.6

-1.32018 2019

Revenue EBITDA Net Income

1.3

-0.1

1.3

0.1

2.6

0.1

2018 2019

In PHP Billions

Q1 Q2 1H

-8%

-16%

-12%

-105%

-91%

-98%

-181%

-173%-188%


» Consolidated loan portfolio expanded 16%to Php71.4 billion, led by faster growth inconsumer loans

» Net interest income account for 82% of netrevenues

» Current consolidated network of 162*branches and 312 ATMs

Robinsons Bank: Profits recovered in Q2 driven by wider NIMs

8*Including 4 branch lites

Consolidated (Php Bn) 1H2018 1H2019 Growth

Assets 109.0 123.2 13%

Equity 12.6 16.9 34%

Gross TLP 61.7 71.4 16%

Gross NPLs 1.1 1.3 19%

Capital Adequacy Ratio 17.3% 19.2%

Tier 1 Ratio 16.4% 18.7%

1.4 1.9

1.4

2.0 2.7

3.9

2018 2019

0.8 0.9

0.9 1.0

1.7 1.9

2018 2019

Revenues Net Interest Income Loans

42.1 45.3

19.7 26.1

61.7 71.4

1H18 1H19

Commercial Consumer

+8%

+33%

+16%

In PHP Billions

+40%

+45%

+42%

+5%

+14%

+10%


JGS: Balance sheet remains healthy

9

24.5

-5.3 5.0

53.1

Current 2020 2021 2022 2023 andthereafter

In billion pesos except ratios(1) Cash, FVPL and available for sale (AFS) investments from Robinsons Bank and AFS on PLDT are excluded

Dec 2018 Jun 2019 Growth

Cash(1) 50.3 60.5 20%

Financial Debt 245.7 251.1 2%

Total LT Debt 210.2 200.2 -5%

FX-Denominated 110.8 99.9 -10%

Net Debt 195.4 190.6 -2.5%

D/E Ratio 0.7 0.6

Net D/E Ratio 0.5 0.5

Dec 2018 Jun 2019 Growth

Cash 15.9 19.6 23%

Total LT Debt 88.5 87.7 -1%

Total ST Debt 5.1 2.4 -54%

Net Debt 77.6 70.5 -9%

Blended Cost of LT Debt 5.00% 5.00%

Blended Avg. Remaining Life(2) 3.1 yrs 2.6 yrs

Schedule of parent LT debt maturities

3.8 1.8

1.1

-

1.8

-

0.5

0.6 0.7

2.7

3.5

0.8

0.8

10.7

7.5

1H2018 1H2019URC MER GBPC

Stable recurring dividends

Consolidated Parent

RLC CEB UICPLDT

Petrochem mainly contributed to the Group’s 1H2019 CAPEX Spending

• Capacity expansion of BCF Int’l, Sugar and Flour

• Aircraft acquisition (2 A321NEO deliveries), flight and ground equipment

• Land acquisitions• Development of malls,

offices, hotels and warehouse facilities

• Maintenance CAPEX

In PHP Billions

• Expansion projects• Machineries and

equipment

10

3.8 5.4 9.1

14.5 7.5

27.1 5.8

4.2

19.9

4.7 12.1

32.4

28.9 29.3

89.3

1H2018 1H2019 2019 Budget

URC Cebu Air RLC Petro/Olefins Banks Others

1H19 CAPEX Spending

RLC’s CAPEX excludes development CAPEX and intercompany transfers


Key Business Updates

11

Business Updates, Plans and Prospects

12

BCF Philippines’ topline to continue enabling reinvestments in brand building & distribution, International’s profit improvement to continue; and AIC to maintain its profit contribution

Grow the core through better trade execution support in coffee, expansion of snack’s portfolio on both ends of our price point and build capacity in AIC

Expand for more by building new adjacencies in beverages and developing products based on the latest global consumer trends

Pre-selling has commenced for the residential high-rise apartments of Phase 1 of our project in Cheng Du

Increase mall’s GLA to 1.6M sqm by opening one new mall and two mall expansions; Complete three new

office developments which will increase NLA to ~600K sqm; open four new hotels which will boost hotel

room count to 3,248 rooms by end-2019; and add 35,000 sqm in warehouse space

Launch projects across residential segments which include JVs with Shang Properties & Hong Kong Land

Placed a major firm order of 31 new generation aircraft from Airbus last June 2018 to accelerate

replacement of existing A320 and A330 CEOs

Maximize the use of airport slots in Manila

Expand in other hubs (Clark and Cebu)

New ATR freighter aircraft to operate in September which will boost our strong cargo position

Maximization of run rates to build up polymer inventory prior to scheduled 2-month shutdown in 4Q 2019 Integrated execution of both tie-in activities for the expansion projects and complex-wide turnaround

maintenance and reliability improvements during the shutdown Ongoing preparation of the organization for expanded operations and upcoming new products

Appointed a CEO for JG Digital Equity Ventures (DEV) and JG Data Analytics Ventures Inc. (DAVI) DEV to grow its business by earmarking a $50-million fund to invest in industries connected to the group’s

ecosystem, particularly in data, financial services, consumer, new media, logistics, and digital health sectors DAVI to launch the rewards app with the broadest ecosystem by 2H2019 Turnover of Clark Airport operations to LIPAD targeted in 3Q19 contingent on conditions precedent requirements

*JG Summit is part of the LIPAD consortium with Filinvest, Changi Airports Philippines and Philippine Airports Ground Support Solutions

Increase users, frequency and utilization of cards business through effective digital marketing, merchant acquisition and insurance bundling

Credit cards business continues to gain momentum Launched “Iponsurance”, an insurance bundle with high life insurance coverage and low maintaining balance Expand geographic reach through regional center offices, regular branches and branch lites

Thank you!

13

For more information, please contact:

JG Summit Investor Relations

[email protected]

+632 470 3919

Appendix

14

STRATEGIC BUSINESS UNITS (SBU)

15

Food & Beverage

Stake: 55.3% Stake: 61.0% Stake: 60.0%Stake: 100%Stake: 67.8%

Stake: 29.6%Mkt Cap: ₱409.8 bnAtt Mkt Cap: ₱121.1 bn



Stake:30.0%

CORE INVESTMENTS

EMERGINGINVESTMENTS

Air Transportation Real Estate Petrochemicals Banking

Power

Real Estate

Communications

Infrastructure

JG SUMMIT INFRASTRUCTURE HOLDINGS CORPORATION

LUZON INTERNATIONAL PREMIERE AIRPORT DEVELOPMENT CORPORATION (LIPAD)*

Stake: 100.0%

Stake: 33.0%

Technology

Stake: 100.0%

Corporate Structure

Mkt Cap: ₱356.9 bnAtt Mkt Cap: ₱197.2 bn



As of August 5, 2019Forex Rate: 1USD= 51.367 PHP

*PLDT is booked as AFS investment; only dividend income is recognized in the P&L

Market Capitalization

₱483.5 bn

Balance Sheet per 17Q

16

(Php Millions) As of Dec 2018 As of Jun 2019 Cash & cash equivalents (including Financial assets at FVPL and financial assets at FVOCI)

76,761 88,835

Other current assets 137,544 139,045

Investments in Associates and JVs - net 144,915 149,147

Property, plant, and equipment 218,274 227,780

Other noncurrent assets 241,794 287,701

TOTAL ASSETS 819,287 892,507

Current liabilities 229,419 255,402

Noncurrent liabilities 222,390 248,971

TOTAL LIABILITIES 451,809 504,373

Stockholders' Equity 276,586 295,836

Non-Controlling Interest 90,892 92,299

TOTAL EQUITY 367,478 388,134

- 2018 is restated from the previous disclosures as it includes PFRS 9 and 15 adjustments- 2019 already incorporates both PFRS9, 15 and 16 adjustments

Income Statement per 17Q

17

(Php Millions) 1H18 1H19 YoY

REVENUES 144,383 158,438 10%

Cost of sales and services 94,474 99,262 5%

GROSS INCOME 49,909 59,176 19%

Operating Expenses 25,942 28,326 9%

OPERATING INCOME 23,968 30,849 29%

Financing costs & other charges (4,442) (5,878) 32%

Foreign exchange gain/ (loss) - net (2,829) 412 -115%

Market valuation gain/ (loss) 385 1,071 178%

Finance income 793 1,180 49%

Others (363) (303) -17%

INCOME BEFORE TAX 17,511 27,331 56%

Provision for Income Tax 2,925 3,548 21%

NET INCOME 14,586 23,783 63%NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 9,839 17,396 77%

CORE NET INCOME 12,294 13,434 9%

- 2018 is restated from the previous disclosures as it includes PFRS 9 and 15 adjustments- 2019 already incorporates both PFRS9, 15 and 16 adjustments

Performance of Minority Investments

*from operations, attributable to equity holders of the Company; UIC net income includes fair value gains from investment property, which is eliminated in JGS consolidated FS Source: Company Filings

REVENUES

NET INCOME* NET INCOME*

REVENUES REVENUES

In PHP Billions In PHP Billionsin SGD Millions

NET INCOME*

18

348.1404.0

1H18 1H19

171.4

490.4

1H18 1H19

150.5165.0

1H18 1H19

12.0 12.0

1H18 1H19

13.3 12.5

1H18 1H19

1.3

1.1

1H18 1H19

1h 2019 unaudited results investors briefing › docs › 2019 › 05 › jgs 2q2019... ·...

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