JG Summit to infuse P11B into olefins unit

GOKONGWEI-LED conglomerate JG Summit Holdings Inc. said Monday that it was planning to infuse P11 billion in fresh capital into a wholly owned petrochemical subsidiary via an additional subscription of shares.

JG Summit told the stock exchange that its board of directors, in a meeting last Friday, approved the proposed capital infusion to JG Summit Olefins Corp. (JGSOC), a petrochemical company that operates the country’s first naphtha cracker plant.

“JGSOC will use the funds to pay off its expansion project obligations and to support its operations during a period of declining market demand and rising input costs,” the conglomerate said.

The cash infusion will be carried out via a subscription by JG Summit to more than 1.67 billion shares of the subsidiary, to be taken from unissued shares. The date of the transaction was not announced.

The capital infusion is expected to improve JGSOC’s financial liquidity position, JG Summit said.

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JG Summit earlier reported that net income more than doubled to P14.9 billion in the first nine months of the year, from P6.5 billion a year earlier, due to sustained revenue growth and improved margins from strategic business units.

Consolidated revenues surged to P251.3 billion from P224.8 billion.

For the quarter ending September, core net income increased to P5.5 billion from P5.1 billion, while revenues rose 24 percent year on year to P87.9 billion from P73.7 billion.

Improved air transport operations, coupled with margin gains in its real estate and food business segments, boosted the top-line performance during the period, the company said.

Higher earnings in the first nine months helped offset the impact of last year’s one-time gain of P3.2 billion from the sale of Manila Electric Co. shares as well as the longer petrochemical shutdown in 2023.

JG Summit shares closed up 30 centavos, or 0.78 percent, at P38.70 apiece on Monday while the benchmark Philippine Stock Exchange index sank by 0.46 percent.