JG Summit: Q1 2026 revenue up 7%, but net income down 27% on FX losses and higher interest costs

On May 13, 2026, JG Summit Holdings reported results for the first quarter of 2026. Consolidated revenue rose 7% year-on-year to PHP 99.9 billion, operating profit increased 9% to PHP 17.1 billion, but net income from continuing operations fell 27% to PHP 5.5 billion due to FX losses and higher interest expenses. At the current price, the shares look rather unattractive: EV/EBITDA is 3.94x, and the portal's model implies 15% downside.

Key takeaways

— Q1 2026 revenue up 7% on record CEB passenger numbers and food sales growth

— Q1 2026 EBITDA up 10% to PHP 25.6 billion, margin expanded to 25.7%

— Net income from continuing operations down 27% on FX losses and higher interest expenses

— Losses from discontinued petrochemicals narrowed, supporting overall net income

— Leverage: net debt to EBITDA for the last 12 months is 2.46x

— Capex in Q1 2026 was PHP 9.1 billion, operating cash flow was PHP 20.5 billion

— Trailing 12-month dividend yield is 2.18%, below the key rate

Attractiveness

Key figures, PHP bn

Q1 2026 revenue up 7% on record CEB passenger numbers and food sales growth

In Q1 2026, JG Summit's consolidated revenue reached PHP 99.9 billion, up 7% from PHP 93.3 billion a year earlier. Key drivers were air transportation (CEB revenue up 9.5% to PHP 33.3 billion) and the food segment (up 5.8% to PHP 47.9 billion). In aviation, growth was driven by record passenger numbers and a 18.6% increase in ancillary revenue.

In real estate, RLC revenue rose 11% to PHP 12.0 billion, helped by higher recognized residential sales. The petrochemicals segment generated no revenue, as the JGSOC plant remains shut down for a second year, while a year earlier it sold PHP 4.8 billion of remaining finished goods inventory.

Q1 2026 EBITDA up 10% to PHP 25.6 billion, margin expanded to 25.7%

EBITDA for Q1 2026 reached PHP 25.6 billion, up 10% from PHP 23.2 billion a year earlier. EBITDA margin expanded from 24.9% to 25.7%. Operating profit rose 9% to PHP 17.1 billion, with operating margin stable at 17%.

The margin expansion reflects operating leverage in aviation and real estate, while food segment margins faced pressure: URC's operating profit fell 1.9% due to a 13% increase in selling and administrative expenses.

Net income from continuing operations down 27% on FX losses and higher interest expenses

Net income from continuing operations (including minority interests) for Q1 2026 was PHP 9.4 billion, down 17% from PHP 11.3 billion a year earlier. Attributable to parent shareholders, it was PHP 5.5 billion, down 27% from PHP 7.6 billion.

The cause is net FX losses of PHP 2.1 billion versus a gain of PHP 13 million a year earlier, due to the Philippine peso's depreciation against the dollar and yen. In addition, financing costs rose 24% to PHP 4.4 billion, driven by interest on debt absorbed from the discontinued petrochemical business and new aircraft deliveries.

Losses from discontinued petrochemicals narrowed, supporting overall net income

Net loss from discontinued operations narrowed to PHP 346 million from PHP 3.3 billion a year earlier, as the JGSOC petrochemical plant fully ceased operations in Q3 2025. As a result, total net income attributable to parent shareholders rose 19% to PHP 5.2 billion.

However, this growth does not reflect improvement in the core business: excluding discontinued operations, profit fell 27%. The company continues to incur preservation costs for the plant, although it cut operating expenses by PHP 681 million.

Leverage: net debt to EBITDA for the last 12 months is 2.46x

At the end of Q1 2026, JG Summit's net debt stood at PHP 250.3 billion, up PHP 16.7 billion from the previous reporting date, but down PHP 9.3 billion over the last 12 months. Net debt to EBITDA for the last 12 months is 2.46x.

The company notes its gearing ratio is 0.73, well below the 2.0 covenant. However, rising interest expenses and FX losses pressure earnings, and the debt increase in Q1 is related to seasonal working capital needs and capex.

Capex in Q1 2026 was PHP 9.1 billion, operating cash flow was PHP 20.5 billion

In Q1 2026, JG Summit's operating cash flow was PHP 20.5 billion, significantly higher than PHP 12.7 billion a year earlier. Capital expenditures were PHP 9.1 billion, up from PHP 5.1 billion in Q1 2025, but still below operating cash flow.

Free cash flow (operating cash flow minus capex) is positive at about PHP 11.3 billion. The company allocated funds to acquire aircraft for CEB, develop RLC properties, and expand URC capacity. Net cash from financing activities was PHP 2.3 billion, including a partial sale of RCR shares.

Trailing 12-month dividend yield is 2.18%, below the key rate

Over the last 12 months, JG Summit paid dividends equivalent to 2.18% of current market capitalization. This is below typical risk-free yields, making the stock less attractive for income-oriented investors.

The company has not disclosed its payout policy for the current year. Given that net income from continuing operations declined and leverage remains moderate, dividends in 2026 could be maintained or slightly reduced. Key risks are continued FX losses and higher interest expenses, which reduce the base for payouts.

Valuation on the latest reported figures

Bottom line

Strengths of the report include revenue and EBITDA growth, margin expansion, and positive free cash flow. However, net income from continuing operations fell 27% due to FX losses and higher interest expenses, outweighing operational improvements. At EV/EBITDA of 3.94x and 15% downside on the portal's model, the share looks rather unattractive. A revision of the verdict would require peso stabilization and lower leverage.