As earnings plunged 71 percent to P1.9 billion in Q1, JG Summit Holdings, Inc. is cutting its capital expenditure (capex) budget for 2020 to P58 billion. The holding firm’s revised 2020 capex is 30 percent lower than its initial allocation of P82 billion, and 20 percent lower than the P72.1 billion it spent in 2019.
The bulk of the reduction rooted from Cebu Air, Inc. The airline arm is now renegotiating payments and delivery schedules related to its orders of new aircraft. Some reductions are also from property arm Robinsons Land Corp.
The company will continue spending for the expansion of petrochemicals business JG Summit Petrochemicals Corp. Once quarantine measures are lifted, the business will look to immediately resume construction work for its production facilities.
Largely due to the increase in foreign exchange losses and the slowdown in its airline and petrochemicals businesses, a core net income decline of 19 percent to P4.3 billion posted by JG Summit in Q1.
As the declines in the airline and petrochemicals units offset the growth in the property and banking segments, consolidated revenues slumped 10 percent to P67.9 billion.
