President and CEO’s Report
JG Summit navigated a year filled with both favorable tailwinds and challenging headwinds in 2024. On one hand, we saw an impressive surge in passenger traffic for our airline, increased activity in our property business’s retail and hotel footprint, and a steady rise in volumes for our food and beverage arm. However, the industry-wide supply-demand imbalance continued to put downward pressure on the margins of petrochemical players globally, including our wholly owned unit, JG Summit Olefins Corporation (JGSOC). Our subsidiaries also strategically maneuvered through specific hurdles that they faced during the year. They have deployed several initiatives, which we expect to bear fruit in the coming months.
As a holding company striving to harness the synergies available across the group, we have likewise steered significant progress in our ecosystem plays, specifically in GoTyme, our digital bank; in DHL Summit Solutions (DSSI), our logistics joint venture; and in Luzon International Premiere Airport Development (LIPAD) Corporation. Additionally, we have moved forward in our sustainability journey, beginning our adoption of the latest sustainability reporting standards released by the International Sustainability Standards Board (ISSB).
As we continue to navigate the shifting tides of business, we are steadfast in our commitment to conquer the currents that challenge us and chart our horizons towards a brighter future for all our stakeholders.
Lance Y. Gokongwei
Director, President and Chief Executive Officer
2024 Performance
JG Summit saw a strong 10% growth in its revenues to PHP 378.6 billion in 2024, coming from the robust demand for travel and leisure, improving sales volumes for consumer goods, as well as the increased petrochemical plant operations. This topline performance was further boosted by the PHP 7.9 billion gain that we recognized after the merger between Bank of the Philippine Islands and Robinsons Bank took effect at the start of 2024. However, we noted headwinds in our subsidiaries, specifically the unfavorable polymer margins in JGSOC, additional depreciation and interest recognized by CEB given the frontloading of capacity in the latter half of the year, as well as the sugar profit correction in URC. All in all, our core and net income closed at PHP 25.1 billion and PHP 21.3 billion, respectively, up 30% and 6% year-on-year.
Our consolidated balance sheet remains to be a sturdy foundation to support the growth that we envision for the group. As of the end of 2024, our consolidated gearing and net gearing ratios stood at 0.66 and 0.54, respectively. We also received an additional 10% in dividends in 2024, coming from our subsidiaries, URC and RLC, as well as our core investments in Meralco and BPI. These were more than enough to offset the decline in our dividends from PLDT due to the absence of the special dividend that was declared in 2023. At the parent level, our net debt rose by 17% year-on-year as we secured additional funding for our PHP 17.1 billion capital infusion to JG Summit Olefins in the fourth quarter of 2024. This was necessary for our subsidiary to meet its debt covenant of keeping its net debt-to-equity ratio below 2.5x.
Revenues
+3% vs SPLY
Momentum of the international division underpinned overall results, plus improving sales volumes in the domestic branded foods business.
Attributable Core Net Income
-5% vs SPLY
Profit corrections in the Sugar and Renewables segment led to the decline, but were cushioned by margin expansion in the branded foods business.
Revenues
+16% vs SPLY
Higher passenger volumes were sustained domestically and internationally, further aided by attractive fares in the latter half of the year.
Attributable Core Net Income
-31% vs SPLY
Additional fleet investments to combat expected challenges in the aircraft supply issues led to increased depreciation and interest expense that affected profits.
Revenues
+3% vs SPLY
Strong investment portfolio growth outpaced the decline in the residential segment.
Attributable Core Net Income
flat vs SPLY
Slightly higher financing costs in 2024 led core profits to be flat year-on-year.
Revenues
+33 vs SPLY
Increased plant operations coming from a commercial shutdown in the previous year led to higher volumes in 2024.
Attributable Core Net Income
PHP 2.6B wider losses vs SPLY
Persistent margin pressures in polymer and olefin products led to the further widening of losses despite the cushion from newer products.
Charting Our Path to the Future
As 2025 unfolds, we expect to gain momentum and see green shoots from several initiatives we have implemented across our businesses. For our food and beverage business, we have begun investing in our value-for-money offerings to cater to evolving consumer preferences. In our airline, we anticipate that the additional capacity in the tail end of 2024 will be absorbed by the continuously growing travel demand. Lastly, for our real estate arm, we continue to improve our investment portfolio and drive growth amid a challenged residential segment.
Our ecosystem plays in digital finance, supply chain and logistics, and airport operations also show great promise as future legs of growth for the group. Just a little over two years from being launched in October 2022, GoTyme now serves 5.4 million customers, with over a third of its customer base as active monthly users. The phygital model in subscriber acquisition using the group’s wide footprint, coupled with our Go Rewards program, continues to attract more new customers at an average of 300,000 per month. It has also begun rolling out innovative financial services to customers, with more lending and investment products to come in the succeeding months.
Meanwhile, DSSI, our joint venture with DHL, which was formed to initially capture the baseload logistics requirements within the conglomerate, has also begun offering its trucking services beyond the group. Since 2023, it has already onboarded six external customers and is looking to expand more in terms of the number and size of its clients and its geographical scope beyond Luzon. LIPAD has also grown as it reached volumes of over 2.4 million passengers with 19,221 flights in 2024, and is expected to further benefit from the move of turboprop flights to Clark. This transfer from the Manila airport is projected to help bring Clark’s total passenger volumes to 3.4 million for 2025, over 40% higher than its passenger count in the previous year.
Additionally, we have begun our transition to follow the latest standards on sustainability reporting, given that the International Sustainability Standards Board (ISSB) released the International Financial Reporting Standards (IFRS) S1 and S2. These standards guide us to examine sustainability- and climate-related risks and opportunities more comprehensively, looking at both their potential financial impact on our businesses as well as how our group contributes to these issues. These also help us strengthen our corporate governance practices towards better transparency and accountability. Ultimately, with a better understanding of these risks and opportunities, we would be able to build on our existing strategies and expedite our efforts to effectively reduce carbon intensity in our operations.
After the close of another year, we continue to uphold our purpose, resolute in our commitment to provide our customers with better choices and creating shared success with our stakeholders. We continue to adapt and refine our strategy to better align our course. We also acknowledge the continued patronage of our customers, as well as the invaluable contributions and support from our employees, business partners, and shareholders, which allow us to carry on as we navigate tides, conquer currents, and chart a path towards brighter horizons for all our stakeholders.
