Bleeding JG petrochem arm gets P11-B capital boost

Gokongwei-led JG Summit Holdings is bolstering its money-losing petrochemicals business with a cash infusion of up to P11 billion amid efforts to revitalize the segment in 2024.

The family conglomerate said in a stock exchange filing on Monday that its board approved the capital infusion into JG Summit Olefins Corp.

The subsidiary will use the proceeds to “pay off its expansion project obligations and to support its operations during a period of declining market demand and rising input costs.”This will improve JG Summit Olefins’ financial position amid continued business losses.

During the first nine months of 2023, these losses were narrowed modestly to P8.8 billion as the unit implemented “disciplined cost control and production efficiencies.”Revenues during the nine-month period were flat at P25.5 billion, JG Summit said in a previous filing.

“The company is embarking on an organization-wide transformation program that targets realizable performance results within 2024,” JG Summit had said.

JG Summit reported to the stock exchange last week that core profit from January to September this year surged 128 percent to P14.9 billion while revenues grew 16 percent to P251.3 billion. —Miguel R. Camus INQ

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Racing to revitalize business