In JG Summit Holdings’ 2021 Annual Report, now available for viewing here, the conglomerate highlighted its efforts to future-proof the group and fast-track recovery from the disruption caused by the pandemic. By accelerating digital transformation, proactively recalibrating its strategy, strengthening its core businesses, and finding strategic new plays while staying true to its purpose and values, JG Summit is emerging from this crisis more resilient and moving toward a sustainable future.
The cover of the report represents the various business units of the conglomerate, which has core interests in the airline, food manufacturing, real estate, banking, and petrochemicals industries, as well as ecosystem plays in data, fintech, logistics, and e-commerce, all working together in harmony. The shapes and patterns which fit seamlessly together are inspired by the Japanese art of Kumiki, a traditional and precise form of woodworking where strong and stable structures are formed without the use of nails or screws. According to the report, Kumiki is an apt metaphor for JG Summit, where its “multiple businesses, extensive workforce, complex worldwide network are harmonized by fixed values and a precise strategy. The result is a business superstructure able to withstand years of headwinds and change.”
In his message to shareholders, JG Summit Chairman James Go notes, “Despite the uncertainty and challenges, JG Summit not only remained resilient, but we continued the work to proactively transform our business via digitalization and continuous innovation aimed to make our products aligned to customer needs and our services easier to access and use. We have also revisited our strategy and recalibrated it to further adjust our business and operating models for the new normal.”
These sentiments were echoed by JG Summit President and CEO Lance Y. Gokongwei in his report: “We exhibited not just resiliency in navigating the year, but also did a lot of work to identify opportunities whether commercial or operational brought about by the crisis. To continue to address the ever-changing needs of our stakeholders, we had to proactively embed a strong emphasis on our thrusts on leadership and people development, digital transformation and customer centricity, and sustainability.”
Faced with the continued threat of the COVID-19 pandemic as well as other volatile macroeconomic factors in 2021, JG Summit took the initiative to refine its long-term strategy to future-proof its businesses, and, taking a cue from the entrepreneurial mindset that the conglomerate’s founder Mr. John was renowned for, it began to identify opportunities that arose from the pandemic.
Among the key portfolio moves of the conglomerate and its business units in 2021 are the following:
- JG Summit consolidated its power business through the sale of its 30% stake in Global Business Power Corporation for Php11.4 billion to Meralco, of which JGS retains its 29.6% stake.
- Universal Robina Corporation sold its Australia and New Zealand snack foods business to the Intersnack Group for $476 million with a healthy gain of $206 million. URC then acquired a 100% stake in Munchy Food Industries, Malaysia’s #1 biscuit brand, which added to its growing presence in ASEAN.
- Robinsons Land Corporation now has a 63.3% stake in the Philippines largest REIT in terms of market capitalization and portfolio valuation, after the successful listing of RL Commercial REIT (RCR).
- Cebu Air, Inc. raised nearly Php12.5 billion from its stock rights offering and secured a strategic partnership with the International Finance Corporation and Indigo Philippines LLC by issuing convertible bonds worth Php12.0 billion, providing the airline with ample liquidity in preparation for air travel recovery.
- JG Summit Olefins Corporation officially entered the LPG trading business through Peak Fuel Corporation. The company started commercial operations of its Aromatics Extraction Unit in July, and completed the construction of its Butadiene Extraction Unit in December.
- Robinsons Bank Corporation expanded its insurance services through its investment in UNICON Insurance. The company also invested in GoTyme, the Gokongwei Group’s digital banking venture in partnership with the Singapore-based Tyme. The neobank is set to launch in 2022.
JG Summit achieved strong results in 2021, with revenues at PHP230.6 billion, representing growth of 13% compared to the same period last year (SPLY); and a core net income of PHP3.5 billion, 672% growth vs. SPLY. Excluding Cebu Air, Inc., which remains the conglomerate’s most challenged business unit given the current circumstances, JG Summit’s core net income soars to PHP 18.4 billion.
Despite the numerous challenges brought about by the pandemic, JG Summit and its varied business units all shored up their commitments on sustainability. Over the last year, a greater focus was placed on climate action. Adopting the recommendations set by the Task Force for Climate-Related Financial Disclosures, the conglomerate’s Enterprise Risk Management process was enhanced by including climate-related risks in its business strategy.
Overall, the business approach employed by the conglomerate in 2021 will continue to be in play this year, says JG Summit Chairman James Go. For the outlook in 2022 and in the years ahead, he says, “We have set out clear strategies and made measured but deliberate choices to pivot the business back into sustainable profitable growth in 2022 and beyond. Our entrepreneurial mindset and grit will allow us to thrive in the new normal as we plan to forge ahead in providing our customers with better choices and will continue to create success with our stakeholders.”
To view the entire 2021 Annual Report click here.