Thursday, May 1, 2014

JG Summit Holdings, Inc.




Financial Highlights (2012)

Over the past three years, JG Summit successfully executed strategic moves which cemented their dominance in the snack foods and ready-to-drink tea market, leading position in the domestic airline business, strong presence in commercial centers, hotels and office buildings, and the elevation of their market position in the telecommunications market with the acqusition of Digital Telecommunications Philippines, Inc. (Digitel) by Philippine Long Distance Telephone Company (PLDT). To achieve these, the Group has been very active in tapping new and additional funding from the capital markets which not only strengthens the Group’s balance sheet but also boosts the Group’s expansion plans, enabling us to ride with the country’s strong economic growth performance.

In 2010, the company unlocked the value of their airline business via an initial public offering (IPO). The public offering strengthened the balance sheet of Cebu Air Inc. (Cebu Pacific) and that of the parent company. With the IPO’s success, the airline company has become self-sufficient and no longer requires guarantees from the parent company for its borrowings. Cebu Pacific went ahead with its expansion program to a doubling of its fleet size from 41 at end Dec 2012 to 85 planes by 2021 (inclusive of six Airbus A330-300 for the long-haul trips). At present, the Cebu Pacific IPO continues to hold the record as the largest low cost carrier IPO in the world with gross proceeds of US$613 million.

With an optimistic outlook on the property sector, Robinsons Land Corporation (RLC) tapped the equity market for additional funding from its one share for every two shares held rights offering at PhP10.00 a share in April 2011. The rights offering raised a total of PhP13.65 billion in gross proceeds for the property company, which was used to increase its landbank by 206 hectares or 56% to 571 hectares on a net basis in December 2012.

In October 2011, it entered into a landmark PhP74.1 billion transaction with the acquisition of Digitel by PLDT, the country’s largest telecom company. Digitel was sold in exchange for an 8% stake in PLDT and US$600million in cash proceeds from the PLDT share option sale. A portion of the cash proceeds from the sale was used to prepay the US$300million syndicated loan of the parent company.

In June 2012, Universal Robina Corporation (URC) re-issued 120 million treasury shares at PhP62.00 a share, raising PhP7.4 billion in gross proceeds. The re-issuance of treasury shares boosted URC’s free float by 5.5%. A portion of the proceeds from the sale was used to fund the purchase of all the remaining 23% interest in URC International not owned by URC in August 2012. The purchase amounted to PhP7.2 billion, valuing the whole international business at PhP31.3 billion. The transaction was value accretive to the food company as it was purchased at a discount to URC’s market valuation at the time of the transaction. The transaction will enable URC to fully capture the earnings of one of its fastest growing business segments. URC also bought its fifth sugar mill from the company’s internally generated funds. The acquisition increased the company’s ranking to become the second largest sugar miller in the country.

From two overnight secondary share placements of JG Summit Holdings, Inc. (JGS), the parent company’s free float of its shares of stock in the Philippine Stock Exchange increased by 4.6% in 2012. A total of 315 million secondary shares were sold to a wider base of institutional investors, broken down into 100 million shares at PhP25.00 a share in February 2012 and 215 million at PhP32.00 a share in September of last year. This resulted to an expansion in the holding company’s average daily turnover at the Philippine Stock Exchange (PSE) by nearly six times to US$2.2 million from around US$380,000 in 2011, which assisted in the 57.1% increase in its stock price from PhP25.15 per share to PhP39.50 per share over a one year period.

Company Profile

JG Summit Holdings, Inc. (JGS), which is controlled by the Gokongwei Family, was incorporated in November 1990 as the holding company for a group of companies with substantial business interests in branded consumer foods, agro-industrial and commodity food products, property development and hotel management, telecommunications, air transportation, petrochemicals, and international capital and financial services,. In addition, JGS has business interests in other sectors, including power generation and insurance. The Company conducts its businesses throughout the Philippines, but primarily in and around Metro Manila and in the regions of Visayas and Mindanao. JGS, through its subsidiaries, also have branded foods businesses in the People's Republic of China and the ASEAN region, including an interest in a property development company in Singapore. JGS' subsidiaries and affiliates include JG Summit Petrochemical Corp., CP Air Holdings Inc., Bauang Private Power Corporation, Universal Robina Corporation, Robinsons Land Corporation, Robinsons Bank Corp., JG Summit (Cayman), JG Summit Philippines Ltd., JG Summit Capital Services Corporation, JG Summit Limited, ExpressHoldings, Inc., and Unicon Insurance Brokers. On March 29, 2011, the Company executed a sale and purchase agreement with Philippine Long Distance Telephone Company for the sale of its investments in shares of stock in Digital Telecommunications Philippines, Inc.

The business of JG Summit started in 1957 when Universal Corn Products, Inc. (now Universal Robina Corporation) was established to operate a cornstarch plant in Manila. Since then, JG Summit has pioneered breakthroughs, broadened its enterprise and stayed at the forefront in every phase of the country's rise to development - the entrepreneur, who invested in agribusiness and the manufacture of feeds and prime food commodities; the visionary, who channeled resources and expanded into financial services, textile and property, all backbones of a growing economy; the captain of industry, who invested in power, telecommunications, petrochemicals, cement, and air transportation, all requisites for industrialization; the innovator, who continually provides value and fun in snacking; and the new regional multinational, who has embraced the challenge of global competitiveness with zeal.

JG Summit has six (6) core businesses: branded consumer, agro-industrial and commodity food products through Universal Robina Corporation; real estate and property development through Robinsons Land Corporation and United Industrial Corporation (in Singapore); telecommunications through Philippine Long Distance Telephone Company; petrochemicals through JG Summit Petrochemicals Corporation and JG Summit Olefins Corporation; air transportation services through Cebu Air, Inc.; and financial services through Robinsons Bank Corporation.

JG Summit's place in Philippine business has for its cornerstone a business portfolio of market leaders, a solid financial position, a formidable management team, and a vision of leading the country to global competitiveness and making life better for every Filipino.  


            Board of Directors:
1.   John L. Gokongwei, Jr.
2.   James L. Go
3.   Lance Y. Gokongwei
4.   Lily G. Ngochua
5.   Johnson Robin G. Go, Jr.
6.   Patrick Henry C. Go
7.   Robina Y. Gokongwei- Pe
8.   Gabriel C. Singson
9.   Ricardo J. Romulo
10.    Cornelio T. Peralta
11.     Jose T. Pardo

FINANCIAL HIGHLIGHTS
JGS - JG Summit Holdings, Inc.


2012
2011
2010
2009
2008

Earnings Summary
Earnings Summary 





Net Income Excl. Nonrecurring Items 
13.53B
8.40B
15.36B
7.68B
-693.67M
Net Income 
13.53B
21.51B
16.32B
8.55B
-693.67M
EBT 
20.73B
13.17B
18.79B
9.10B
-3.30B






Balance Sheet Accounts 





Cash 
19.70B
33.90B
42.11B
18.47B
7.16B
Trade Receivables 
10.59B
9.22B
12.04B
13.48B
14.33B
Accounts Receivable 
16.32B
13.42B
15.69B
18.15B
18.34B
Current Assets 
94.10B
99.53B
102.43B
76.12B
67.92B
Investments 
77.25B
75.53B
30.43B
29.06B
25.66B
Total Assets 
340.30B
313.63B
326.32B
277.88B
250.89B
Accounts Payable 
10.30B
8.27B
8.45B
8.46B
8.71B
Current Liabilities 
85.73B
65.01B
63.49B
59.46B
65.92B
Short-term Borrowings 
38.95B
32.71B
25.95B
19.17B
30.05B
Long-term Borrowings 
42.13B
57.90B
87.05B
92.54B
72.02B
Total Borrowings 
81.08B
90.61B
113.01B
111.70B
102.08B
Forex Liabilities 
50.43B
57.87B
78.04B
80.05B
87.07B
Total Liabilities 
141.37B
133.24B
176.86B
172.99B
158.22B
Shareholders' Funds 
155.27B
141.28B
117.57B
83.16B
72.91B






Income Statement Accounts 





Total Revenues 
141.54B
141.40B
112.81B
98.99B
102.96B
Equity Earnings 
2.01B
2.22B
2.77B
3.09B
2.39B
Operating Expenses 
21.73B
19.11B
17.30B
16.27B
22.71B
Depreciation 
8.57B
7.97B
11.66B
10.45B
8.85B
Interest Expense 
4.12B
5.36B
5.53B
5.63B
6.03B
Taxes Paid 
2.83B
1.96B
1.61B
1.29B
-321.83M






Other Financial Information 





Net Working Capital 
8.37B
34.52B
38.94B
16.65B
1.99B
Net Debt (Net Cash) 
61.38B
56.71B
70.90B
93.23B
94.92B
Enterprise Value 
338.56B
233.20B
208.44B
139.54B
106.85B


COMPANY VALUATION
JGS - JG Summit Holdings, Inc.


2012
2011
2010
2009
2008

Year End
Yr End Price
 39.50
 25.15
 19.60
 6.60
 1.70
Fiscal Yr End Price
 39.50
 25.15
 19.60
 6.60
 1.70

Highlights
Earnings (Excl. Nonrecurring Items)
 13,533
 8,401.06
 15,359
 7,679.85
 (693.67)
Sales
 130,049
 121,035
 102,657
 90,846
 96,679
Book Value
 155,265
 141,283
 117,569
 83,158
 72,912
Cash
 19,698
 33,895
 42,110
 18,474
 7,157.80
Cash Flow
 22,101
 29,486
 27,982
 18,996
 8,152.47
Free Cash Flow
 35,832
 24,357
 (2,868.34)
 (9,485.57)
 (8,645.15)

Per Share Data
Earnings per Share
 2.01
 1.25
 2.28
 1.13
 (0.1021)
Sales Per Share
 19.30
 17.96
 15.23
 13.37
 14.22
Book Value Per Share
 23.04
 20.96
 17.44
 12.23
 10.73
Cash Per Share
 2.92
 5.03
 6.25
 2.72
 1.05
Cash Flow Per Share
 3.28
 4.38
 4.15
 2.79
 1.20
Free Cash Flow Per Share
 5.32
 3.61
 (0.43)
 (1.40)
 (1.27)

Price Ratios
Price to Earnings
 19.68
 20.18
 8.60
 5.84
 (16.66)
Price to Sales
 2.05
 1.40
 1.29
 0.49
 0.1195
Price to Book Value
 1.71
 1.20
 1.12
 0.54
 0.1585
Price to Cash
 13.51
 5.00
 3.14
 2.43
 1.61
Price to Cash Flow
 12.05
 5.75
 4.72
 2.36
 1.42
Price to Free Cash Flow
 7.43
 6.96
 (46.05)
 (4.73)
 (1.34)
PEG Ratio
 0.32
 (0.45)
 0.0846
 (0.0048)
 0.1544

Dividend Info
Dividends per Share
 0.1600
 0.0800
 0.0500
 0.0300
 0.0300
Dividend Yield (%)
 0.41
 0.32
 0.26
 0.45
 1.76
Dividend Payout (%)
 0.0797
 0.0642
 0.0219
 0.0266
 (0.29)

Shares Info
Market Capitalization
 277,179
 176,482
 137,537
 46,313
 11,929
Outstanding Shares
 6,739.53
 6,739.53
 6,739.53
 6,797.19
 6,797.19
Total Number of Shares
 6,739.53
 6,739.53
 6,739.53
 6,797.19
 6,797.19
Authorized Capital
 12,851
 12,851
 12,851
 12,851
 12,851
Par Value
 1.00
 1.00
 1.00
 1.00
 1.00


Technical Anaylsis:


Source:  Bloomberg

          JG Summit advanced 1,752% from March 19, 2009. That time, its stock was priced at P2.70. So, if you invested P10,000 on March 19, 2009, that money will become P187,371.80 as of May 1, 2014.

Price:  50.6/share (as of May 1, 2014)

Market Cap:   355,070 million (as of May 1, 2014)

Address:  43/F Robinsons-Equitable Tower ADB Ave. corner Poveda Road, Pasig City

Web site:  www.jgsummit.com.ph

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