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Wednesday, May 28, 2014

GT Capital's insurance arm sees drop in 1Q premium income

AXA Philippines today announced its premium income in the first three months of year fell as the weakness of the single premium contracts weighed on the insurer.

AXA Philippines president and chief executive officer Rien Hermans told reporters that premium income dropped 26 percent year-on-year to P3.5 billion in the first quarter of 2014.

“The market volatility experienced in the second half of last year has made investors more cautious going into this year, especially those investing in single premiums,” Hermans said.

"It is not to be expected that we will still grow if the market is not growing. The market will be 30 percent less than what it was last year and we will be affected by that as well," he added.

Year-on-year, single premium contracts fell 43 percent to P2 billion at end-March, while renewal premium contracts jumped 34 percent to P925 million.

Hermans attributed the decline in single premiums to a high-base effect after money released from the special deposit accounts (SDAs) of the Bangko Sentral ng Pilipinas found its way to the market last year.

"We saw a peak last year [in terms of the single premium contracts]. I think it will sustain its normal growth curve. The level [for 2014] will be higher than 2012 but lower than 2013," he said.

First-year premiums jumped 19 percent year-on-year to P508 million, buoyed by AXA's health insurance products. Since January's launch of three new products – Health Exentials, Health Max and SME Employee Protexion – the health insurance segment has contributed sales amounting to P56.3 million, accounting for nearly a tenth of total first-year premiums for the quarter.

"With the rise in the incidence of critical illnesses such as heart disease, stroke and cancer and with the rising costs of healthcare, more Filipinos are beginning to understand how important it is to be financially prepared for the unlikely," Hermans said.

Despite a possible contraction in total premium income for the entire 2014, AXA Philippines is confident it can increase its market share of nearly 11 percent to over 12 percent by yearend.

"We are very bullish about our prospects in 2014. We have a lot of new innovations to look forward to in the next several months in terms of new products and funds as well as new distribution channels," Hermans said.

"This year, we will be expanding our business with PSBank, and we will be launching a new online sales portal for life insurance, the first of its kind in the country. Aside from this, we will also be introducing new funds that will give customers access to global markets," he said.

"With all these initiatives, along with several others, we look forward to a strong year ahead of us," he added.

AXA is also set to launch other technological innovations beginning the second half of the year. These include AXA iON, a secure platform that allows consumers to purchase insurance online; myAXA Partner, a portal where consumers can select an AXA financial partner to meet and discuss their needs; and the second phase of myAXA Biz, a cloud-based digital sales tool.

AXA Philippines is the life insurance unit of George Ty-owned GT Capital Holdings Inc, whereas Philippine Savings Bank is the thrift arm of Metropolitan Bank and Trust Co, which Ty also controls.

- Interaksyon

First Holdings raising P7B war chest for acquisitions

First Philippine Holdings Corp (FPH) is tapping the financial markets to beef up its war chest for investments and acquisitions.

In a disclosure to the Philippine Stock Exchange, the Lopez-led firm said its board of directors cleared the issuance of up to P7 billion in preferred shares or fixed-rate corporate notes or a combination of both. The fund-raising would be done in one or more tranches.

Sought for comment, the holding firm said it has started the sale of P1.5 billion worth of preferred shares with the option to upsize it up to P3 billion. The offer period ends tomorrow.

FPH is selling up to six million preferred shares at P500 per share. The shares, with a par value of P100 each, are cumulative, non-voting, non-participating and non-convertible.

Net proceeds of the issuance will bankroll investments and acquisitions at the parent level or through its subsidiaries.

BDO Capital & Investment Corp was tapped to act as the sole arranger.

FPH's earnings dropped 42 percent to P1.03 billion in the first quarter from P1.79 billion a year ago on higher finance costs, expenses and foreign exchange losses.

FPH has interests in power generation, manufacturing, and real estate development, among others. It has a 3.95 percent interest in Manila Electric Co (Meralco). is the online news portal of TV5, which like Meralco is chaired by Manuel V. Pangilinan.

Meralco signs 25-year deal to distribute power within Cavite ecozone

The country's biggest power retailer has signed a 25-year deal to distribute electricity within the Cavite Ecozone (CEZ).

In a disclosure to the Philippine Stock Exchange, Manila Electric Co (Meralco) said it entered into a concession agreement, effective until May 2039, with the Philippine Export Processing Zone Authority (PEZA) for the operations and maintenance of the power distribution facilities in CEZ.

PEZA is the agency tasked to promote investments, assist, register, grant incentives to foreign investors in export-oriented manufacturing and service facilities operating inside economic zones.

In the first quarter, Meralco earned a P4.1 billion, which is about the same level as last year.The flat growth was blamed on soft electricity consumption due to consumers' growing access to energy efficient lighting and appliances.

Concerns on electricity prices also had an impact on consumption, the utility's executives said.

- Interaksyon

Tuesday, May 27, 2014

EDC to invest in 220-MW plant in Indonesia

Energy Development Corp (EDC) is set to seal a joint-venture deal for a geothermal project in Indonesia in the second half of the year.

On the sidelines of the company's annual stockholders meeting, First Philippine Holdings Corp chief financial officer Francis Giles B. Puno said the Lopez-led firm is investing in a 220-megawatt power plant in the Southeast Asian nation.

EDC is a unit of First Gen Corp, which is owned by FPH.

Total investment cost for the entire project is over a billion dollars, with EDC's share pegged at "roughly $200 million," Puno said.

The Lopez-led company will take a minority stake in and management control of the power plants. Eventually, the company may secure majority control of the project.

FPH chairman Frederico Lopez said there are opportunities in the power generation space in Indonesia because the sector is just opening up.

"That's what we can provide as value-added. With our experience in geothermal, we can come into a country like Indonesia where there are lots of geothermal opportunities," Puno said.

Last year, EDC inked an agreement with Alterra Power Corp of Canada, giving it a 70-percent stake in four of the latter’s geothermal concessions in South American countries.

These prospects are the Mariposa geothermal project in Chile; and the Tutupaca Norte, Loriscota and Crucero geothermal projects in Peru.

"The opportunity to start investing heavily and getting back our return will be ahead in Indonesia compared to Latin America," Puno said.

Although EDC is the world's largest integrated geothermal energy company with its portfolio of steam fields and power plants, the company's operations are solely based in the Philippines.

- Interaksyon

Megaworld to expand Eastwood City

Megaworld Corp is beefing up its first cyber park in the Philippines with the expansion of Eastwood City, capitalizing on the robust demand for office and commercial spaces in the township in Libis, Quezon City.

In a briefing, Megaworld senior vice president Jericho P. Go said the holding firm for the real estate businesses of Alliance Global Group Inc is adding 1.5 hectares to Eastwood City with the acquisition of a property located on the eastern part of the township along Eastwood Palmtree Avenue beside the Eastwood Le Grand Tower 3.

The acquisition will bring the total land area of Eastwood City to 18.5 hectares from the existing 17 hectares.

Megaworld is lining up at least three high-rise towers that will combine residential, office and commercial components in a cluster. This marks the first time that the real estate developer will develop a mixed-use tower offering a "city within a building" outside two projects in Cebu.

The first phase of the expansion over a four-year period will accommodate around 100,000 square meters of office spaces, generating direct and indirect employment for 200,000 people.

"The advantage of Eastwood City particularly on the BPO side is there is pent up demand for 30,000 to 50,000 square meters of office space. They are just waiting for that building to be right there," Go said.

The expansion area will also accommodate 600 residential units and 9,000 square meters of commercial space with all towers having leasable commercial spaces at the ground levels.

After the acquisition of the 1.5-hectare property, Megaworld is scouting for more land to expand its township, said Harold C. Geronimo, head of the company’s communications group.

In the last 15 years, Megaworld has transformed the former textile mill into Eastwood City, its pioneering "live-work-play" mixed-use township that gave birth to the booming business outsourcing industry, one of the drivers of the Philippine economy, said Geronimo.

Today, Eastwood City is home to about 60,000 IT and BPO workers in 59 companies, making it the biggest cyberpark in the Philippines in terms of workforce. It is also home to around 25,000 residents and about 500 commercial and retail partners.

Eastwood already has 10 office buildings, 19 residential condominium towers, three lifestyle malls with an average daily foot traffic of 100,000 and the Eastwood Richmonde Hotel.

Profit-taking pulls down PH stock market below 6,800-mark anew

The Philippine composite index on Monday slipped below the 6,800-mark anew as investors locked in gains ahead of the release later this week of the country's first-quarter economic growth data.

At the Philippine Stock Exchange, the benchmark index gave up 20.91 points, or 0.31 percent, to close at 6,790.42, extending its decline for the second consecutive session. Except for the marginal gain of the industrial counter, the other indices finished in the red led by the mining and oil, which shed 0.71 percent.

Decliners beat advancers, 97 to 69, while 51 issues were unchanged. Value turnover hit P7.22 billion, as 950.86 million shares changed hands.

The most actively traded stocks were Metrobank, Universal Robina, DoubleDragon, PLDT and Emperador. The top gainers were Jackstones, Liberty Flour and Keppel Holdings, while the biggest losers were Imperial Resources B, Bogo Medellin, and Roxas & Co.

"We encountered profit-taking today in the absence of fresh leads to buoy the local market," said Freya Natividad, investment analyst at Papa Securities.

Expectations of lower Philippine economic growth in the first three months of the year also weighed on sentiment, Natividad added.

Market consensus is that the Philippine economy will expand by 6.3 percent in the first quarter of 2014, outside the 6.5 percent to 7.5 percent full-year growth target of the government. The official GDP data will be out on Thursday.

"We expect the market to consolidate as investors position themselves in anticipation of GDP results," said Gab Aguila, equity analyst at DA Market Securities.

Local equities defied the rally in Asian markets, which hit a one-year high on the back of a positive performance on Wall Street and a victory for billionaire Petro Poroshenko in Ukraine's presidential election.

Last Friday, the S&P 500 hit a fresh high after an increase in home sales boosted confidence in the US economy.

The S&P 500 rose 0.42 percent to 1,900.53, while the Dow Jones Industrial Average gained 63.19 points, or 0.4 percent, to 16,606.27. The Nasdaq Composite Index rose 31.47 points, or 0.76 percent, to 4,185.81.

- Interaksyon

Thursday, May 22, 2014

DoubleDragon unit acquires Cebu property for new mall

DoubleDragon Properties Corp has acquired a commercial property north of Cebu's capital for a new shopping mall.

In a disclosure to the Philippine Stock Exchange, DoubleDragon said subsidiary CityMall Commercial Centers Inc has acquired a 10,251-square meter prime commercial corner lot right across the Consolacion Public Market.

"The company intends to build another CityMall in this prime commercial property which is targeted to start construction by July this year," DoubleDragon said.

DoubleDragon is a 50-50 joint venture between Injap Investments Inc and Honeystar Holdings Corp. Jollibee founder Tony Tan Caktiong owns Honeystar, while Mang Inasal founder Edgar "Injap" Sia II owns Injap Investments.

DoubleDragon targets to open five CityMalls this year and another 20 by the following year.

As of March 31, the first CityMall in Roxas City that is expected to be completed by December is already 93 percent leased out. Two other CityMalls are set to start construction in Zamboanga by the second quarter.

The CityMalls will have floor areas of approximately 5,000-10,000 square meters and will rise in prime locations nationwide, mostly in the Visayas and Mindanao.

The malls will house the fast-food brands under the Jollibee Foods Corp umbrella, such as Jollibee, Mang Inasal, Chowking, Greenwich, Red Ribbon and Highlands Coffee.

DoubleDragon closed the first quarter with a profit of P21.1 million, up from last year's P9.8 million. Revenues climbed to P172.5 million from the P71.3 million in 2013.

Real estate sales prop up Century Properties' Jan-Mar net income

Strong sales propped up Century Properties Group' first-quarter profit.

In a financial report, the property company of former ambassador Jose EB Antonio said its net income rose three percent to P513.06 million in the January to March period from P500.56 million in the same three months of last year.
The company attributed the increase to the growth in real estate sales, which accounted for bulk of its revenues of P2.85 billion, up 10 percent from P2.60 billion in 2013.

Revenues from real estate sales reached P2.39 billion, an eight percent increase from P2.21 billion the previous year.

"Such growth is attributable to a continued increase in project sales, as well as healthy collection statistics across all its residential segments," Century Properties said.

Collections were derived from completion of the Knightsbridge Residences project in Century City and turnover of its Rio, Santorini, St. Tropez towers at the Azure Residences.
There have, likewise, been increased construction accomplishments in Century City in Makati, Acqua Private Residences in Mandaluyong, and the Residences at Commonwealth in Quezon City.

Century Properties also disclosed that revenues from its property management arm, Century Properties Management Inc (CPMI), increased 11 percent at P71.70 million from P64.50 million the prior year.

CMPI is the largest independent property manager in the country today, with 49 buildings totaling 2.6 million square meters under management. Notable projects under management include the Asian Development Bank, Makati Medical Center, and Pacific Star Building.
The company said pre-sales amounted to P5.3 billion, of which 69 percent consisted of affordable projects or units priced below P3.6 million.

Another 22 percent comprised middle income projects or units priced between P3.7 million and P7.2 million, and nine percent were luxury projects or units priced above P7.3 million.

Sales from the luxury segment include sales generated from the company’s latest project called Century Spire, a 60-story residential and office tower. The architecture was designed by Daniel Libeskind, the master plan architect for the reconstruction of the Ground Zero in New York City.

Armani/Casa Interior Design Studio will do interiors for the amenities and common areas. Century Spire’s groundbreaking will be held on May 28 at Century City, with Daniel Libeskind and the Armani/Casa team in attendance.

In addition to Century Spire, the company will soon launch a sixth tower at its Acqua project, as well as a residential tower at its Pampanga site, which will be called Azure North. The launch of Azure North will be Century Properties’ first project outside of Metro Manila.

Aside from its residential business, Century Properties has been focused on building its investment portfolio for recurring income, the first of which was the recently opened Century City Mall. 
The mall has a net leasable area of 17,000 square meters and is 99 percent leased and 100 percent reserved. Of the 110 retail outlets, 80 will be open by the end of May.

Other projects in the pipeline include Centuria Medical Makati, which will be completed at the end of the year; Forbes Media Tower and Century Spire, which will complete the premium office block in Century City; an office building in Bonifacio Global City to be completed by 2017; and Acqua 6 at its Acqua development.

The company expects roughly 110,000 square meters of gross floor area from the said projects.

PH stock market rebounds near 6,800-mark

The Philippine Stock Exchange index (PSEi) made a strong comeback a day after it plummeted, weighed down by negative news overseas and investor concerns about the market's high valuations.

At the noon break, the PSEi was up 37.52 points, or 0.56 percent, at 6,799.90. It shot back to the 6,800-mark in early trading before paring gains.

All sub-indices were in the green, with the industrials counter climbing 0.87 percent to lead the market's rebound.

The most actively traded stocks were BDO, Puregold, Ayala, PLDT and LT Group. Top gainers were Da Vinci Capital, Central Azucarera and Oriental Petroleum, while the biggest losers were ATN Holdings, Ever-Gotesco and South China Resources.

According to BDO chief market strategist Jonathan Ravels, support exists at the 6,750 level, adding that if this holds, the market could re-test the 6,900-mark.

Monday, May 19, 2014

US stocks: Wall Street opens lower on growth concerns

NEW YORK - U.S. stocks opened lower on Monday, on the heels of back-to-back weekly declines for the S&P 500 as investors grew cautious over stock valuations with indexes near record levels amid mixed economic data.

The Dow Jones industrial average .DJI fell 36.34 points, or 0.22 percent, to 16,454.97, the S&P 500 .SPX lost 3.61 points, or 0.19 percent, to 1,874.25 and the Nasdaq Composite .IXIC dropped 7.96 points, or 0.19 percent, to 4,082.63.   Reuters

Aboitiz Group eyes power, food ventures abroad

The Aboitiz Group plans to bring its power generation and food businesses outside the Philippines.

In a press briefing today, Aboitiz Equity Ventures Inc (AEV) president Erramon Aboitiz said unit Aboitiz Power Corp is looking at Papua New Guinea and Indonesia for expansion.

"We're looking at different sources. We are looking at geothermal, hydro," Aboitiz said.

The conglomerate is looking at buying into or rehabilitating an operating asset instead of building a power plant from scratch, he said.

“PNG, they have a plant that they are bidding out. I don't know what's happening there right now. We're looking at Indonesia. We are talking to some partners. But so far, we don't have anything firm,” Aboitiz said.

AboitizPower is among the three biggest players in the local power generation space along with the Lopezes and San Miguel Corp.

For its part, Pilmico Foods Corp president Sabin Aboitiz said the food unit of AEV is also eyeing acquisitions as a template for expansion, capitalizing on the opportunities presented by the Asean economic integration.

"We want to expand our markets and not only rely on the Philippines. The flour in Asean is tax-free. They are coming to the country and we need to be able to go to their markets to be able to balance it," he said.

Pilmico completed its first flour shipment to Vietnam last December. It is also opening an office in Indonesia by end-May or early June, after which it will also make its foray to Thailand.

AEV suffered a 29 percent year-on-year decline in earnings to P4.9 billion in the first quarter of the year, dragged by the weakness of its power and banking units.

For this year, AEV is allocating P88 billion for its capital expenditures, higher than the budgeted capex of P59 billion in 2013.

AboitizPower will account for P80 billion of the total spending. It will be earmarked for greenfield and brownfield projects that will increase its power generation capacity by 2,000 megawatts over the next five years.

Makati court junks Century Properties' bid to stop termination of Okada casino deal

Century Properties Group Inc lost a court battle against Japanese billionaire Kazuo Okada over their agreement for an integrated resort project in Entertainment City.

In a disclosure to the Philippine Stock Exchange, the property company of former ambassador Jose EB Antonio said the Regional Trial Court of Makati issued an order denying and dismissing Century Properties' petition for interim measures of protection against the Okada group.

"We are still seeking the advice of our legal counsel and studying our legal options," Century Properties said in a statement when asked to comment on the court order.

In a statement posted on its website, Okada-led Universal Entertainment Corp said the court junked Century Properties' petition for "lack of merit."

In March, the Philippine property firm obtained a court order preventing the Okada group from terminating their investment agreement for the $2-billion Manila Bay Resorts project. Last month, the real estate company secured a 20-day extension of the court ruling that will expire on May 13.

The initial court order required the Okada group to produce all documents and information that Century Properties will need to complete its due diligence, extend the due diligence and closing periods, and refrain from dealing with any other party for the development of a five-hectare portion of the property.

The Okada group stopped negotiations with Century Properties after privately held First Paramount Holdings 888 withdrew from the agreement.

The agreement would have given Century Properties and First Paramount a combined 60 percent stake in Eagle 1, which holds the 44-hectare property on which the Manila Bay Resorts would rise. Eagle 1 is owned by Tiger Resort Leisure & Entertainment Inc, a unit of Universal Entertainment.

Century Properties had claimed the pullout of First Paramount should not have rendered the deal ineffective because provisions under the investment agreement provide alternative measures to exhaust all reasonable means to close the deal.

Despite the dispute with Century Properties, Manila Bay Resorts is on track to open in the third quarter of 2015, Tiger Resort had said.

The Okada group has long been in search for a local partner to partly address issues on foreign ownership of land. Earlier negotiations with Robinsons Land Corp of the Gokongwei family and Empire East Land Holdings Inc of billionaire Andrew Tan fell through.

- Interaksyon

DA Market Securities signs up for PSE online trading platform

DA Market Securities has signed up to use the online trading platform of the Philippine Stock Exchange (PSE).

In a briefing, DA Market chairman Nestor Aguila said today’s launch of iTRADE, powered by the bourse's PSETradex, will allow the brokerage to diversify its client base, which comprises mostly high net-worth individuals in Pampanga.

"Online is inherent to any stock brokerage firm in the future. Without it, you can't expand your client base," Aguila said.

With the rollout of iTRADE, DA Market is eyeing to grow its client base to 20,000 in the next three years, or a tenth of the population of Pampanga, as it attracts the younger population with investible funds of roughly P100,000, Aguila said.

DA Market hopes to capitalize on Bank of Florida’s network of 15 branches to boost its brokerage business. The group is also into education and property development.

DA Market is the fifth brokerage to sign up for the bourse's online facility after Optimum Securities, Maybank ATR Kim Eng (MATRKE) Securities Inc, Coherco Securities and BA Securities.

It took a while for DA Market to go online because the brokerage had to beef up its research capabilities, Aguiluz said.

About 10 brokers are beta-testing and are expected to introduce their PSETradex-powered sites within the year, PSE president Hans B. Sicat said.

The exchange offers PSETradex to brokerages that want to provide a web-based trading platform to their clients without having to develop proprietary facilities. This online solution will allow clients of brokers to post their orders online and directly access market data electronically.

The PSE has tapped Malaysian securities trading solutions provider N2N Connect Berhad for the local online trading platform.

SM open to partnering with San Miguel for alternative to NAIA

Henry Sy's listed holding firm is open to partnering with San Miguel Corp (SMC) for a proposed $10-billion international airport south of Manila.

"We can talk," SM Investments Corp chief financial officer Jose Sio told reporters Monday during the listing of the conglomerate's P15-billion fixed-rate retail bonds at the Philippine Dealing and Exchange Corp.

Last week, SMC president Ramon S. Ang named Filipino conglomerates such as the SM and Ayala groups as possible partners for the airport project. He said the diversified conglomerate was willing to go through bidding for the development.

Sio said there are no discussions with San Miguel, but a possible tie-up with the diversified conglomerate will be good "not [only] for business" but "for country” as well.

"That’s what we need for our country to grow in the next stage, we have to improve our infrastructure. That is very important," he said.

Last week, Ang presented to the government a proposal to construct an international airport that will be located along the Manila-Cavite Coastal Road at the waterfront reclamation project covering the cities of Paranaque and Las Pinas.

The proposed airport, which would be pursued as a build-operate-transfer (BOT) project, would be located on newly reclaimed land reaching 1,600 hectares. Once built, the new airport can accommodate all international and domestic operations at the Ninoy Aquino International Airport (NAIA).

The new airport is near Manila Bay where the SM group, through SM Land Inc, and the Pasay City government are planning a P54.5-billion reclamation project. The Philippine Reclamation Authority is bidding out the right to reclaim the project.

“We’re laying the ground work for the next stage of Philippine economic growth. After the upgrade, we expect we will enter the second stage of development,” Sio said.

SM is in the business of retail, mall operations and development, financial services, residential and property development, hotel and convention centers, and gaming. Aside from its core businesses, the group also has interests in mining, infrastructure, and geothermal energy.

SM suffered a 16-percent drop in earnings to P6.23 billion in the first quarter from P7.42 billion a year ago in the absence of hefty trading gains.

Despite the weakness in the first three months of the year, the conglomerate will end the year with a single-digit increase in net profit, as BDO posts higher interest income and significant loan growth, Sio said in a previous interview.
- Interaksyon

Saturday, May 17, 2014

Lucio Co holding firm raises P5B warchest

The holding firm of businessman Lucio Co completed its maiden debt issuance, the proceeds of which will be used to finance strategic acquisitions.

In a disclosure to the Philippine Stock Exchange, Cosco Capital Inc said it signed a P5 billion notes facility agreement with a syndicate of institutional lenders composed of banks and insurance companies.

The issuance of seven- and 10-year notes was 2.5 times oversubscribed.

First Metro Investment Corp, the investment banking arm of the Metrobank group, acted as sole arranger and book runner for the transaction.

"This notes issuance is indeed a clear confirmation of the financial community's trust and confidence in Cosco. We congratulate First Metro for successfully arranging the deal," said Leonardo Dayao, Cosco president.

Formerly Alcord Gold Resources Inc, Cosco became the holding firm for Co's consumer-focused businesses after a P74.81-billion share-swap transaction. It has interests in retail through Puregold Price Club Inc, liquor distribution, real estate, oil storage and mining.

Early this month, Cosco completed the acquisition of Office Warehouse Inc, marking its maiden foray into non-food specialty retail.

In March, Cosco acquired NE Pacific Shopping Centers Corp, the owner of NE Pacific Mall, the largest commercial area in Nueva Ecija.

PNB's earnings fall by more than half in 1Q

Philippine National Bank's (PNB) profit in the first quarter fell by 54 percent, dragged down by the lower trading and investment gains during the period.

In a report to the Philippine Stock Exchange (PSE), the banking arm of the Lucio Tan Group (LTG) said its net income from January to March this year reached P1.3 billion, P1.5 billion lower than the P2.8 billion posted the same period last year.

Net interest income jumped 138 percent to P4.5 billion from P2.6 billion the year before while net service fees and commission income was flat at P600 million.

Trading and investment income dropped 88 percent to P237 million from P3.2 billion in the first quarter of 2013, causing the total operating income to decrease by 13 percent to P6.6 billion from P7.6 billion previously.

Financial markets during the quarter were volatile, owing to the flight of foreign capital as the US Federal Reserve's withdrawal of economic stimulus.

Expenses went up by 17 percent to P4.8 billion from 4.1 billion last year as compensation and fringe benefits, occupancy and equipment-related costs incrased.

The bank'ss assets at end-March dipped to P611.9 billion from P6.2 billion while return on equity dropped to 6.3 percent from 18.4 percent due to the lower net income of the merged PNB-Allied Banking Corp.

Non-performing loans (NPL) slid lower to P10.3 billion at end-March 2014 from 10.7 billion in December 2013 while its NPL ratio was 1.3 percent.

San Miguel willing to undergo bidding for new airport project

San Miguel Corp (SMC) is willing to go through bidding for its proposed $10 billion international airport in the south of Manila.

"The idea is that the government will bid out the project. We just presented our proposal. I cannot ask the government na bigyan ako ng right of first refusal. That's not good. So what we presented is a good idea. A good project and I don't want people to say that we have the advantage over anybody. Kaya okay sa akin na magpatawag siya ng bidding para magkaroon ng equal chance, equal opportunity to build this airport," SMC president Ramon S. Ang told reporters on Thursday night.

Ang said SMC is open to partner with Filipino companies such as the SM and Ayala groups, for the construction of the international airport.

"Cebu Pacific can also build a low-cost terminal there. Maraming puwedeng maging partner and we are open to anybody," he said.

On Wednesday, SMC submitted to the government a proposal to construct an international airport that will be located along the Manila-Cavite Coastal Road at the waterfront reclamation project covering the cities of Paranaque and Las Pinas.

The proposed airport, which would be pursued as a build-operate-transfer (BOT) project, would be located on newly reclaimed land reaching 1,600 hectares and would be separated from adjacent areas by drainage channel.

The airport layout plan is based on an international and domestic passenger handling capacity of 75 million passengers per year, with scalability to cater to more than 100 million a year.

Separate passenger terminal facilities are planned for full-service and low-cost airlines. The terminals will have up to 164 contact gates serviced by protected passenger boarding bridges and walkways.

Once built, the new airport can accommodate all international and domestic operations at the Ninoy Aquino International Airport (NAIA). International and domestic operations will be co-located allowing for more convenient international-domestic connect times.

The new airport would be only 11 minutes away from the Makati Central Business District via a new Airport Expressway rail service, allowing it better access than airports in Bangkok, Hong Kong, Singapore and Kuala Lumpur.

The proposed Airport Expressway would be 15-kilometers long, providing quick access to Fort Bonifacio, Ortigas and Eastwood as well as an alternative route to the Makati.

The main airport access can be via C5 and East-West direction, directly connecting the proposed new airport to Fort Bonifacio, Ortigas and Eastwood. This route would also lead to Makati via Kalayaan Road.

SMC has a 49 percent stake in Philippine Airlines Inc (PAL), which the food-and-beverage conglomerate acquired from tycoon Lucio Tan, who still holds the remaining 51 percent of the flag carrier.

Thursday, May 15, 2014

Jollibee 1Q net income up a fifth as sales hit 5-year high

Jollibee Foods Corp (JFC) bucked cost pressures to push earnings by a fifth, as organic sales growth accelerated to a five-year high in the first three months of the year.

In a disclosure to the Philippine Stock Exchange, the homegrown fast food giant said its attributable profit rose 20.50 percent to P1.08 billion in the January to March period from P895 million in the same three months of last year.

System-wide retail sales, a measure of all sales to consumers from company-owned and franchised stores, jumped 14.6 percent, the highest quarterly organic sales growth in five years, to P27.31 billion from P23.84 billion in 2013.

The Philippine business posted a 12.3 percent expansion in system wide sales on the back of a double-digit growth of Greenwich, Red Ribbon and Mang Inasal, coupled with higher same-store sales due to increased volume and consumer visits. The Jollibee group also raised selling prices to cover the increase in cost of raw materials.

Compared to domestic operations, JFC’s international business expanded at a faster pace of 24.3 percent with Southeast Asia and the Middle East business growing by 39.1 percent, China by 22.3 percent, and the US by 19.5 percent.

Same-store sales of foreign businesses remained strong with Vietnam, Hong Kong and Saudi Arabia chalking up double-digit growth rates and China and the US improving by five percent and six percent, respectively.

Operating income climbed 17.7 percent despite cost pressures from higher commodity prices. As a result, JFC raised prices in the latter part of 2013 and the first quarter of 2014 but they were not sufficient to recover the increase in cost of raw materials.

"JFC will take the necessary steps to sustain healthy profit margins including implementing cost improvement and price adjustments in the balance of 2014 and in the quarters ahead," the listed company said.

The Jollibee group opened 55 new stores across its various brands in the first quarter, 42 in the Philippines and 13 overseas.

JFC operates the largest food service network in the Philippines with 2,217 stores at end-March, comprising the flagship Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal and Burger King. It was operating 588 stores abroad, including Yonghe King, Hong Zhuang Yuan and San Pin Wang, bringing its store network to 2,805 stores worldwide.

JFC has a 50 percent interest in joint ventures for Highlands Coffee (Vietnam, Philippines) at 77, Pho 24 (Vietnam, Indonesia, Philippines, Hong Kong, Macau and Japan) at 58 and 12 Sabu (China) at 12.

PS Bank ends Tier 2 note offer early on high demand

The thrift lending arm of Metropolitan Bank and Trust Co said it has ended the offer period for its Tier 2 notes two days early on the back of "overwhelming" demand from investors.

In a disclosure to the Philippine Stock Exchange, Philippine Savings Bank said it has decided to advance the end of the offer period to May 14, 2014 from the original May 16, 2014.

Launched on May 9, the Basel III-complliant unsecured subordinated notes were priced at 5.5 percent per annum, which would be issued on May 23. The notes were issued a rating of PRS Aaa by Philratings.

Proceeds of the IOU sale would be used to strengthen PS Bank's capital base and allow it to expand its operations, the lender told the bourse.

ING Bank served as arranger and selling agent for this transaction while Multinational Investment Bancorporation acted as selling agent and market maker. PSBank and First Metro Investment Corp were the limited selling agents, Philppine Depository and Trust Corp served as registrar and paying agent while Development Bank of the Philippines was the trustee.

PSBank has kept its non-performing loan (NPL) ratio low at 0.24 percent while its NPL coverage ratio is in excess of 100 percent. It is also more than adequately capitalized, with a capital adequacy ratio (CAR) of 16.3 percent as of end-March 2014, well above the regulatory minimum of 10 percent.

ICTSI says Q1 profits up 29% on sale of non-core asset in Cebu

International Container Terminal Services Inc. (ICTSI) on Wednesday said net income reached $52.4 million in the first quarter, up 29 percent from $40.7 million a year earlier.

The bottom line mainly reflected a non-recurring gain from the sale of a non-core asset in Cebu, the company said in a disclosure to the Philippine Stock Exchange.

In January, ICTSI sold its interest in Cebu International Container Terminal Inc. to Cebu Asian Rim Property and Development Corp. and Hong Kong Land (Philippines) BV for $13.2 million.

“The higher net income attributable to equity holders was mainly due to the one-time gain on sale of a non-core asset,” the disclosure read.

Net income would have been up by only 6 percent to $45.1 million without the sales proceed from Cebu International Container Terminal Inc.

The transaction helped to offset the higher interest on concession rights from the new contract of Operadora de Puerto Cortés S.A. de C.V. (OPC) in Honduras, and the depreciation, amortization and start-up expenses from the new terminals Contecon Manzanillo S.A. de C.V. in Mexico and OPC.

Port operations revenues rose 19 percent to $248.9 million from $209.3 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 6 percent to $103.6 million from $97.5 million.

Consolidated volume totaled 1.757 million twenty-foot equivalent units (TEUs), up 17 percent from 1.496 million TEU, reflecting better international and domestic trade and the latest business from new terminal operations in Mexico and Honduras, without which the first quarter volume would have grown by 1 percent.

The terminal operations in Manila, Brazil, Poland, Ecuador, Madagascar, China and Pakistan accounted for 71 percent of the consolidated volume in January to March, said ICTSI.

“The increase in revenues was mainly due to higher storage revenues and ancillary services, favorable volume mix, tariff rate increases in certain terminals, new and renegotiated contracts with shipping lines and forwarders, and the revenue contribution from the new terminals in Manzanillo, Mexico and Puerto Cortes, Honduras,” the company said.

Cash operating expenses went up 28 percent to $108.2 million from $84.6 million, taking into account the operating expenses of new terminals in Mexico and Honduras.

Higher costs of manpower as volume increased and higher salary rates as mandated by governments in certain terminals also raised expenses.

Expenses were also incurred after the rent rebate program for ICTSI Oregon ceased starting January 2014.
Business development in pursuit of port projects also translated to additional expenses.

The company used $64 million or 21 percent of its capital expenditures in the first quarter. The full-year capex was $310 million, including allotments for new container terminals in Mexico and Argentina and the development of terminals in Honduras and Democratic Republic of Congo.
ICTSI also invested $11.4 million for the development of SPIA, a joint venture project with PSA International Pte Ltd. (PSA) in Buenaventura, Colombia.

- GMA News

Foreign buying lifts PH stock market to highest so far this year

The Philippine benchmark index on Wednesday settled at record levels for the year, driven by strong foreign buying and the record performance of US equities overnight.

At the Philippine Stock Exchange, the composite index advanced 27.63 points, or 0.40 percent, to close at 6,880.44, its highest finish since closing at 7,021.95 on May 31, 2013, or near levels before former Federal Reserve chairman Ben Bernanke hinted that the US central bank may unwind its massive stimulus program.

The bellwether PSEi peaked at 6,906.63 in early trading until pockets of profit-taking kicked in. Foreign investors went into buying territory with net purchases worth P2.86 billion.

Profit-taking was felt in the mining and oil, as well as financial counters, which shed one percent and 0.75 percent, respectively. The property index gained 0.77 percent, the industrial index added 71 points and the services index rose 0.32 percent to drive the market higher.

There were two decliners for every advancer, while 51 issues were unchanged. Value turnover improved to P14.05 billion from yesterday's P9.70 billion, as 2.34 billion shares changed hands.

Most actively traded stocks were Metrobank, Ayala Land, Alliance Global, Emperador and PLDT. The top gainers were Pancake House, Globalport and DoubleDragon, while the biggest losers were Da Vinci Capital, Berjaya Philippines and Bright Kindle Resources.

"The momentum of last week’s breach of the 6,800 mark continues to flow with the PSEi testing the 6,900 psychological resistance inside the first hour off the opening bell. Even as value activity still favor index-component counters, we are seeing the stirrings of flows into off-index, including what may be considered third tier issues," said Jun Calaycay of Accord Capital Equities Corp.

Calaycay noted that market debutants DoubleDragon and Century Pacific as well as Cyber Bay and 8990 Holdings have entered the Top 20 by value turnover, suggesting growing concerns over valuation vis-a-vis current price levels for blue chips and some second-line issues.

Overnight, US equities barely moved after retail sales rose by the biggest since March 2010. The S&P 500 added less than one point to 1,897.45, closing for a second consecutive time at record levels. The Dow Jones Industrial Average rallied for a fifth straight session, rising 19.97 points, or 0.1 percent, to 16,715.44.

- Interakyson

EDC spending $12.5M in Chilean geothermal project this year

Energy Development Corp (EDC) will drill additional wells in the Mariposa geothermal prospect in Chile within the next two years.

Richard B. Tantoco, EDC president and chief operating officer, today told reporters that the company continues to invest in needed infrastructure for the Mariposa project.

This year, the company will spend $12.5 million for roads, drilling pads and the water supply system in the 104,000-hectare geothermal concession 250 kilometers south of Santiago City.

The amount is on top of the $2.5 million the company has spent since signing up last year to develop the geothermal prospect.

Tantoco said EDC will ramp up investments in the project in the next two years for additional infrastructure and drilling activities.

"In 2015 and 2016 we expect to spend another $46 million in drilling three wells and building associated facilities like camps, etc. These efforts support EDC's goal of having the Mariposa project become one of the pioneering geothermal plants in Chile," he added.

EDC acquired a 70 percent stake in the Mariposa project from Alterra Power Corp of Canada in 2013 in line with the Philippine company's thrust to establish a beachhead abroad.

Although the Lopez-led firm is the world's largest integrated geothermal energy company with its portfolio of steam fields and power plants, the company's operations are solely based in the Philippines.

- Interaksyon

SMB, Spanish affiliate forge deal to fortify San Miguel brand worldwide

San Miguel Brewery Inc (SMB) has forged a partnership with Spain's leading brewer to strengthen the global footprint of the San Miguel brand.

In a statement, SMB said San Miguel Brewing International Ltd signed a cooperation agreement with Mahou San Miguel (MSM) to jointly explore new markets and expand the reach of San Miguel.

Outside of the core and original Philippine market, the combined international sales of the two brewers make San Miguel one of the top 10 international premium beer brands. It is being enjoyed in 60 countries across five continents.

“MSM and SMB share a long and storied history. Leveraging on the strength and depth of our category as well as presence in our respective markets can do a lot for ramping up San Miguel as a global flagship brand,” said San Miguel Corp (SMC) president and chief operating officer Ramon S. Ang, who also chairs SMB.

In 1953, San Miguel Philippines granted to San Miguel Spain the branding rights for Europe and Mediterranean Africa, paving the way for the establishment of a new Spanish brewing affiliate in 1957. Since then, the two companies have -- independently although also in parallel -- developed a positioning for San Miguel as a pioneering and international brand.

"This alliance is much more than a business partnership," said MSM chairman Javier Lopez del Hierro.

"It has been an emotional journey to the origins of San Miguel, and is a unique opportunity to release the brand´s enormous potential, promoting a common positioning across the globe. An initiative which will help transform our international business, for which the San Miguel Brand already represents 90% of our sales outside of Spain," he added.

- Interaksyon

Tuesday, May 13, 2014

Lucio Co holding firm cleared to raise P5B in debt

The holding firm of businessman Lucio Co was cleared to raise P5 billion from the sale of debt papers.

In a disclosure to the Philippine Stock Exchange, Cosco Capital Inc said it would sell seven-year corporate notes worth P4 billion and 10-year debt worth P1 billion.

The interest rates of the debt papers will be determined on Wednesday.

Cosco has interests in retail through Puregold Price Club Inc, real estate, liquor distribution and oil storage. It is venturing into non-food specialty retail through mergers and acquisitions as well as organic growth.

Formerly known as Alcorn Gold Resources Inc, Cosco became the holding firm for Co's businesses after a P74.81-billion share-swap transaction.

Globe enjoys 350 pct surge in 1Q profit on non-recurring gain

Globe Telecom on Tuesday reported a 350 percent increase in net income in the first quarter of this year as the Ayala-led telco accelerated last year the depreciation of new equipment brought about by its network upgrade.

In a statement, Globe said its net income reached P2.9 billion in the January to March period from P656 million in the same three months of last year.

Globe attributed the sharp increase to the "significant decrease in depreciation charges, as the bulk of the accelerated depreciation charges, which are related to assets to be replaced in Globe’s network and IT modernization programs, have been incurred in 2013. "

In 2012, Globe embarked on a $790 million network modernization and IT system upgrade.

To date, over 90 percent of the network is already on 4G HSPA+, providing faster mobile browsing experience for Globe’s subscribers.

To support the requirements of its subscribers for 2G, 3G and 4G services, Globe has a total of 22,813 base stations, including over 8,400 4G base stations.

Globe’s core net income, which excludes the impact of these non-recurring accelerated depreciation charges, improved from P3.1 billion to P3.4 billion in the first quarter of the year.

Consolidated service revenues amounted to P23.2 billion, nine percent higher than the P21.4 billion last year.

Globe said the revenue gains were driven by strong contribution across all business segments given the growth in both mobile and broadband customer bases, the sustained demand for data connectivity and the introduction of market-relevant promotions during the quarter.

“We are pleased with our performance in the first quarter, as top-line growth momentum was sustained. We have also seen encouraging improvements in mobile browsing in terms of activity and number of users as a result of the successful Free Facebook promotion and we hope to see continuous growth in mobile internet adoption among our customers moving forward,” Ernest Cu, Globe president and chief executive said.

“Given these results, we remain confident in sustaining the growth throughout the year as Globe moves closer to the completion of our network and IT transformation programs. Looking ahead, Globe will continue with our commitment in providing more exciting promotions and innovative offers in order to create a wonderful world for our valued customers and shareholders,” he added.

Mobile revenues improved by eight percent to P18.5 billion in the first quarter from P17.1 billion a year earlier. Globe's mobile subscriber base reached 40.7 million at the end of the first quarter this year, from 35.1 million a year ago.

Broadband revenues amounted to P2.8 billion, up from P2.5 billion in the same period last year.
Its broadband subscribers stood at 2.19 million, up 26 percent from last year's 1.74 million.

Ayala net income up 22 pct, as one-time gain offsets BPI weakness

The Philippines' oldest conglomerate registered higher earnings in the first quarter of the year driven by its core businesses and extraordinary gains, offsetting the weakness of its banking unit.

In a disclosure to the Philippine Stock Exchange, Ayala Corp (AC) said its net income climbed 22 percent to P5.5 billion in the January to March period from P4.5 billion in the same three months of 2013.

AC attributed the growth to the favorable performance of its real estate, telecommunication, water and international businesses as well as a P1.8-billion capital gain from the sale of Stream Global Services Inc, one of its investee companies, under the conglomerate's business process outsourcing (BPO) unit.

The Ayala group's profit would have increased by 24 percent year-on-year without the capital gains during the period, the impact of Bank of the Philippine Island's exceptional trading gains of P5.7 billion and Globe Telecom’s accelerated depreciation last year.

“We are glad to see the strong momentum continue across our core businesses as well as the improving profitability of our international businesses,” said AC president and chief operating officer Fernando Zobel de Ayala.

“We are confident this momentum will continue for the rest of the year as the fundamental drivers of domestic economy remain firmly in place. This will continue to underpin demand for our real estate products, banking, telecom and water services," he said.

Most of Ayala’s core businesses posted a double-digit expansion in earnings year-on-year in the first quarter. Their contribution to the conglomerate’s equity earnings jumped by a fifth year-on-year to P6.9 billion at end-March.

Higher-margin additives prop up DNL's earnings

D&L Industries' earnings climbed by a fifth in the first three months of the year as the food additive company sold more of its higher-margin specialty products.

In a briefing, D&L chief financial officer Alvin Lao said the firm’s earnings increased to P377 million in the January to March period from P314 million last year.

D&L had set a target of growing profit in the mid- to high-teens for the entire 2014. Earnings for the three-month period account for 29 percent of last year’s income.

Consolidated revenues went up by 34 percent to P3.10 billion this year from P2.32 billion in 2013 due to the recovery in commodity prices and sustained double-digit volume gains.

D&L has enjoyed sequential topline growth of five percent in the past four consecutive quarters on the back of increasing volume, shifting product mix and rising commodity prices.

High-margin specialty products continued to drive revenues, accounting for 64 percent of overall sales, while the share of the low-margin commodity business was at 36 percent.

D&L saw margin compression during the period as increases in commodity prices outpaced growth in volumes. As a result, overall gross profit margin dropped to 18.4 percent from last year's 19.2 percent and overall net income margin eased to 12.2 percent from 13.6 percent.

"We do hope and expect [gross profit] margins for rest of the year will start to go up as we sell less of commodity products," Lao said, adding that D&L targets to end the year at 20 percent, consistent with its plan to improve margins by one percent every year until 2018.

D&L Industries is engaged in product customization and specialization for the food, plastics, and aerosol industries. The company’s principal business activities include manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use.

- Interksyon

PSEi climbs back to 11-month high following Wall Street rally

The Philippine composite index on Tuesday climbed to an 11-month high after US equity gauges rose to record levels.

At the Philippine Stock Exchange, the benchmark index advanced 41.47 points, or 0.61 percent, to close at 6,852.81, its highest finish since closing at 6,875.60 on June 10, 2013. Except for the financials sub-index, the other counters finished in the green as the mining & oil and holding firm counters gained at least a percent each.

Advancers beat decliners, 126 to 61, while 38 issues were unchanged. Value turnover improved to P9.70 billion from yesterday's P8.02 billion, as 1.80 billion shares changed hands.

Most actively traded stocks were Puregold, PLDT, Ayala Land, Alliance Global and Metrobank. Top gainers were Pancake House, Bankard and Berjaya, while the biggest losers were Chemphil, Discovery World and ATN Holdings A.

"The emotional pendulum swung back to positive after the Dow hit a fresh record reflecting a resurgence of confidence on the world’s largest economy. Activity in the market picked up behind news of acquisitions while expectations China’s leaders will keep an accommodative stance amid weak economic numbers provided added lift," said Jun Calaycay of Accord Capital Equities Corp.

Overnight, US equities rose to send benchmark indexes to record levels as investors picked up some of the stocks that were sold off in recent weeks. A number of deals also fuelled optimism on the world's largest economy.

The Standard & Poor’s 500 Index advanced 1 percent to a new record of 1,896.65, while The Dow Jones Industrial Average rose 112.13 points, or 0.7 percent, to 16,695.47, extending an all-time high. The Nasdaq Composite Index rallied 1.8 percent, its biggest gain since January, to cut its year-to-date decline to 0.8 percent this year.

- Interaksyon

Monday, May 12, 2014

Cebu Pacific to return 5 Airbuses to Tiger Airways Singapore by Q3

Budget airline Cebu Pacific will complete the return of five Airbus aircraft from newly-acquired Tiger Airways to their original owner Tiger Airways Singapore Pte Ltd.

Two of Tiger Airways' Airbus A319s have already been returned to the Singaporean airline while three more A320s will be returned by the third quarter of 2014, lawyer Jorenz Tañada, Cebu Pacific vice president for corporate affairs, said in a text message.

According to aviation market analysis firm Centre for Asia Pacific Aviation, "Cebu Pacific was unwilling to assume the Tigerair Philippines fleet of five A320 family aircraft as they are powered with different engines from Cebu Pacific’s A320 fleet."

Cebu Pacific spent $7 million to buy the 40 percent share of Tiger Airways Singapore Pte Ltd and $8 million for the 60 percent owned by Filipino businessmen in Tigerair Philippines, giving the budget airline 100-percent control when the purchase was completed on March 22.

It plans to rename Tiger to Go Air Inc.

Cebu Pacific currently operates more than 2,200 flights a week to 24 international and 33 Philippine destinations in its network while Tigerair Philippines operates 118 flights a week week to 11 domestic and international destinations.

The combined fleet is expected to allow Cebu Pacific to fly to high-growth markets like Australia, Myanmar, and India and allow Tigerair Philippines to fly more passengers to additional cities in Cebu Pacific’s network in the Philippines and North Asia\

 - GMA News

RFM says Q1 net income up 8.4% on higher sales, better margins

Higher sales and better margins helped food and beverage manufacturer RFM Corporation post an 8.4 percent rise in net profit to P167 million in the first quarter of the year.

Sales revenue slightly rose to P2.24 billion from P2.22 billion a year earlier, the company said in a disclosure to the Philippine Stock Exchange Monday.

RFM president and CEO Jose A. Concepcion III attributed the higher income to better margins in core businesses and higher sales from higher margin products.

“The lower commodity input costs and managed operating expenses this year helped in bringing our cost levels down," he said.

A double-digit growth was recorded in RFM's consumer brands, offsetting the weaker flour sales during the period, Concepcion said.

"The priority for us is to grow the branded side of our business and we are encouraged as well by the increasing consumer off-take readings for our Fiesta pasta, White King cake mixes and Selecta Milk," he said.

The off-take reports track the actual sales to consumers recorded in the company's major trade accounts.

"Revenues from our newly acquired Royal pasta have just started to be sold under RFM only in February, and sales level has so far been higher than levels posted last year by the previous owner," Concepcion said.

He said the second quarter started strong with a double-digit growth in the milk, ice cream and pasta groups in April.
"We remain bullish on a stronger 2014, banking on stronger consumer spending, and the market leadership and strength of our power brands Selecta, Fiesta and now also Royal," he added.

- GMA News

San Miguel Corp. reports Q1 net income down 49% on forex losses

First quarter net earnings of diversified conglomerate San Miguel Corporation declined by nearly half on foreign exchange losses.

In an e-mailed statement Monday, San Miguel said net income attributable to equity holders of the parent company was at P2.2 billion, down 49 percent from P4.2 billion a year earlier.

The company said it incurred P1.8 billion in foreign exchange losses, "a stark contrast from the P1 billion forex gains the company reported in the same period last year."

Without the forex losses, San Miguel would have registered a net income of P4 billion, up 23 percent.

Revenues rose 9 percent to P195 billion from P178.3 billion in the comparable period mainly due to the robust growth of the fuel and power units, as well improved contributions from core businesses.

Petron Corp.'s consolidated sales from of Philippine and Malaysian operations rose 12 percent to P125 billion.

Power unit SMC Global Power Holdings Corp. saw a 14 percent jump in revenues to P20 billion.

Beer unit San Miguel Brewery Inc. posted a slight uptick in revenues to P17.6 billion from P17.5 billion on improved volumes in February and March.

San Miguel Pure Foods Company Inc. saw a 5 percent increase in sales to P24.2 billion from P23 billion.

San Miguel Yamamura Packaging Corp. improved revenues by 1 percent to P5.6 billion from 5.5 billion.
Better volumes pushed liquor unit Ginebra San Miguel Inc.'s revenues 21 percent higher to P3.6 billion from P3.1 billion.

- GMA News

PH stock market retreats from 11-month high as overseas worries dampen sentiment

Philippine share prices on Monday retreated from an 11-month high, succumbing to profit taking following last week's rally and amid mounting concerns in Ukraine and Thailand.

At the Philippine Stock Exchange, the benchmark index dropped 35.92 points, or 0.53 percent, to close at 6,811.34, snapping a two-day climb. The services and mining & oil counters fell more than a percent each to drag the equities market lower.

Advancers however beat decliners, 89 to 86, while 46 were unchanged. Value turnover slowed to P8.02 billion from P11.89 billion last Friday, as 1.14 billion shares changed hands.

Most actively traded stocks were PLDT, Universal Robina, Ayala Land, DoubleDragon and Megaworld. Top gainers were Da Vinci Capital, Discovery World and Alliance Select, while the biggest losers were Megaworld, Primex and Roxas & Co.

"The bane of unfolding events overseas was just too much for short-term investors sitting on gains. While this does not change the over-all domestic picture on which we have hinged our 2014 outlook, the realities of investor sentiment being swayed could not be disregarded," said Jun Calaycay of Accord Capital Equities Corp.

Asian stocks were mixed today as investors balanced sentiment between gains on Wall Street and fears the Ukraine crisis could escalate into civil war. Rising tension in Thailand following the recent ouster of Prime Minister Yingluck Shinawatra also dampened sentiment.

The PSE index surged 1.55 percent last week after Standard & Poor's unexpectedly upgraded the Philippines’ credit rating by one notch with a stable outlook.

Branded consumer food business lifts Universal Robina's Oct-Mar earnings

The maker of C2 tea drink and Jack 'N Jill snack food registered a double-digit expansion in its profit in the first half of its 2014 fiscal year driven by its local branded consumer food business.

In a disclosure to the Philippine Stock Exchange, Universal Robina Corp (URC) said its earnings hit P6.22 billion in the October to March period, up 14.4 percent from P5.44 billion in the same six-month period in a year ago. URC's fiscal year ends in November of every year.

In its second quarter starting January, the Gokongwei-owned firm's net income rose six percent to P3.33 billion from P3.15 billion in the same three-month period the year before.

Earnings growth in the first semester was slower than the 42.2 percent jump in operating income in the same six-month period due to market valuation loss and decrease in net finance revenue after URC disposed all bond investments and a significant portion of equity investments last year.

During the six-month period, URC benefited from the tailwind of relaxed input prices, higher sales volume and increasing scale, which resulted in margin expansion of 310 basis points year-on-year.

Net sales advanced 13.87 percent to P23.04 billion in the second quarter, pushing the first-half figure by 13.5 percent to P45.74 billion from P40.32 billion in 2013.

Sales of the branded consumer foods group, excluding the packaging division, increased by a fifth to P37.39 billion in the first half from P30.94 billion a year ago. The domestic business expanded by more than a quarter to P25.622 billion from P20.23 billion previously, driven by the growth across all segments led by the beverage division, which managed to expand by 42.2 percent.

New product launches in Thailand and a recovery in Vietnam pushed the branded consumer food group's international sales by nearly a tenth to P11.77 billion from P10.71 billion in 2013.

Sales of the non-branded consumer foods group declined by 10.3 percent, dragged by lower sugar volumes as production were affected by the delay of the milling season and unusually wet weather.

Saturday, May 10, 2014

7-Eleven Malaysia seeks to raise $226M from IPO


7-Eleven Malaysia Holdings Bhd, Malaysia's biggest convenience store operator, is seeking to raise up to $226 million in an initial public offering, a term sheet of the IPO showed. Controlled by Malaysian billionaire Vincent Tan, the company, set an indicative price range of 1.33 ringgit to 1.38 ringgit per share. A customer patronizes a 7-Eleven store in Kuala Lumpur on Thursday, May 8. 

- GMA News

PLDT, three state firms' credit ratings lifted after S&P upgrades PH again

Four Philippine companies' ratings were lifted following the upgrade on the Philippines' credit status by Standard and Poor's Ratings Services' on Thursday.

Philippine Long Distance Telephone Co
Corporate credit
To: BBB+, stable outlook
From: BBB, stable outlook

"The rating on PLDT remains constrained by our 'BBB+' transfer and convertibility assessment on the Philippines," S&P said.

Its stand-alone credit for the country's biggest telecommunications firm remains 'a-' as it benefits from its leading position in the domestic market, good business diversity, strong cash flows, and modest debt level. However, the "intense competition" in the mature domestic cellular market and large dividend payouts of almost 100 percent temper these strengths, the ratings agency said.

Power Sector Asset & Liabilities Management Corp and National Power Corp
To: BBB, stable outlook
From: BBB-, stable outlook

S&P said the stand-alone credit profiles of PSALM and Napocor are "weak" and "heavily dependent on the support of the Philippine government." Thus in times of financial distress, the two utilities are "almost certain" to receive timely and sufficient government aid.

Development Bank of the Philippines
To: BBB, stable outlook, A-2
From: BBB-, stable outlook, A-3

The ratings on DBP were equalized by S&P with the sovereign credit ratings on the Philippines as it is almost certain that the government would come to the rescue of the state-run bank by providing timely and sufficient aid in time of financial distress.

- Interkasyon

Filinvest Land keeps capex at P20B, plans more projects in affordable, mid-income segments

The real estate company of the Gotianun family is rolling out more projects this year, underscoring its positive outlook on the property sector and the Philippine economy.

During its stockholders meeting on Friday, Filinvest Land Inc (FLI) president Josephine Gotianun-Yap said the company is launching 22 projects, mostly in the affordable and mid-income housing segments, worth a combined P17.5 billion.

“FLI is expanding our affordable brand, not just in the greater Metro Manila area but as well as other areas of Luzon, Visayas and Mindanao,” Yap said.

Last year, the listed firm unveiled 17 projects, comprising of six new mid-rise buildings (MRB) and 11 new phases in existing horizontal projects.

In the first quarter, FLI grew its profit between the 15-20 percent range on the back of consistent sales growth from its mid-rise projects and contribution from its rental and leased spaces, Yap said.

The real estate firm is keeping its capital expenditure budget flat at P20 billion this year. The office and retail leasing businesses account for nearly half of the capex, while the residential segment will receive 30 percent of the total. FLI will spend six percent of its budget to accumulate land.

FLI is building two mixed-use projects in Manila and Makati that will combine its prime investment property portfolio and urban residential product strategy.

Located in Chinatown near Tutuban complex, One Binondo will have residential units, office spaces, hotel, mall and plaza retail areas, and micro-retail stalls. Another development is 100 West in Buendia that will have residential, office and retail components.

To complement its residential business, FLI will expand its recurring business with the gross leasable area of its leasing assets expected to grow by 2.5 times to 870,000 square meters by 2018 from 346,000 square meters last year.

The property firm will build new commercial developments near transportation hubs in Cubao, Ortigas, Buendia, Mall of Asia Complex in Pasay City and Filinvest City.

FLI has a land bank of 2,356 hectares that can sustain 10 years worth of horizontal projects and four to five years worth of vertical developments.

FLI's net income rose 14 percent to P4 billion last year from P3.5 billion in 2012 on the back of a 16 percent growth in total revenues.

FLI is part of the Filinvest group, which is engaged in the business of financial services, hotels, sugar farming and milling, and power generation.

- Interaksyon

Purefoods eyes acquisition of add'l cargo ships to bring down logistics costs

San Miguel Pure Foods Co Inc may buy new Panamax vessels to reduce logistics costs, as it moves to improve efficiencies with the looming Asean economic integration.

On the sidelines of the company's stockholders meeting yesterday, San Miguel Corp (SMC) president Ramon S. Ang told reporters that SMC Shipping and Lighterage Corp is evaluating a plan to purchase six Panamax cargo vessels at a cost of $50 million each.

Each Panamax, which can handle 65,000-85,000 tons of payload, will generate annual savings of $10 million.

SMC Shipping is studying "if it makes sense to buy the Panamax kasi malaki talaga ang requirement ng Purefoods for feeds, soybean meal, cassava and flour," said Francisco Alejo III, the president of the food subsidiary.

Last year, Purefoods inaugurated a grains terminal in Mabini, Batangas that can accommodate the large Panamax vessels, allowing the company to enjoy lower freight costs and terminal fees.

The acquisition of new cargo vessels is part of Purefoods' move to improve efficiencies as tariff duties have come down to zero with Asean integration.

"In our case, we are now very competitive because we’ve seen how much tariff duties have come down. That’s why we’re improving our efficiencies to be competitive with the possible entry of foreign brands. So far, we're able to compete as a country," Alejo said.

Ang has issued marching orders for Purefoods to raise volumes by at least double digits and improve the market share of all its products, which are “either ranked number one or two” in the market.

"We are very optimistic about country growth because we feel there will be more consumption. We want to ride the momentum of the improvement in our economy because in many cases we have a very big market share so we're relying on increased consumption," Alejo said.

For its regional expansion, Purefoods is looking at possible acquisitions in Indonesia. It has sent people to evaluate opportunities in Cambodia, Vietnam and Myanmar.

SMC has no plans to sell shares in Purefoods, Ang said. Last year, the food company was considering selling more shares in 2014 to widen public ownership.

Purefoods expects the positive momentum seen in the first quarter of the year to be sustained for the rest of 2014, Alejo said.

Purefoods' net income rose by nearly a quarter to P870 million in the first three months of the year on improved efficiencies coupled with higher volumes and selling prices.

Consolidated revenues reached P24.2 billion in the first quarter, a five percent increase over the same period last year

Purefoods is part of SMC, which has interests in beverage, packaging, power generation, oil refining and retailing, mining, telecommunications, property development, air transportation and infrastructure.

- Interaksyon

Friday, May 9, 2014

Phoenix Petroleum to borrow P2B for expansion

Phoenix Petroleum Philippines Inc will borrow money to bankroll its expansion this year.

In a disclosure to the Philippine Stock Exchange, the fuel retailer said its board of directors approved the issuance of a short-term commercial papers (STCPs) of up to P2 billion to be listed at the Philippine Dealing & Exchange Corp.

The STCP issuance shall be jointly arranged by Multinational Investment Bancorp and AB Capital & Investment Corp.

Raymond T. Zorilla, Phoenix vice president for external affairs, said that proceeds from the loan will be used "for additional working capital for expansion projects."

Phoenix Petroleum is the country's fourth largest fuel retailer with its over 350 outlets, the bulk of which is located in Mindanao.

The company targets to put up 500 additional Phoenix pump outlets over the next five years.

DoubleDragon more than doubles first-quarter profit

DoubleDragon owners Tony Tan Caktiong (left) and Ed Sia (2nd from left) with PSE officials during stock market listing.

The real estate joint venture of the founders of Jollibee and Mang Inasal said earnings surged in the first three months of the year on higher revenues.

In a disclosure to the Philippine Stock Exchange, DoubleDragon Properties Corp chairman and chief executive Edgar "Injap" Sia II said the company expects profit to exceed its net income guidance of P340 million this year, a growth of at least 170 percent from the P126.63 million in 2013.

In the first quarter, DoubleDragon’s earnings surged 117 percent to P21.2 million from P9.8 million in the same period last year.

Consolidated revenues rose 142 percent to P172.50 million in the January to March period from P71.3 million in 2013.

Revenue from real estate sales, which accounts for majority of the consolidated revenues, jumped 139 percent to P170.7 million from P71.3 million previously on the strength of the property development sector.

"We expect continuous growth to be driven by current and near-term developments. DoubleDragon's latest offering, Dragon Shopping Center in Divisoria, is expected to contribute significantly to the net income target for the year," Sia added.

DoubleDragon will build its first mall in Metro Manila at hawkers’ haven Divisoria next month. The shopping center will be completed by September just in time for the Christmas holiday shopping rush.

Envisioned to become one of the country's biggest property developers by 2020, DoubleDragon is building a hundred community malls under the brand CityMalls, mostly in the Visayas and Mindanao.

The company targets to complete five CityMalls this year and will start laying the groundwork for the next 20 to be opened by 2015.

The company raised P1.16 billion from an initial public offering at the start of the year to finance the development of the first five CityMalls, acquisition of land and pre-development work for near-term projects and general working capital purposes.

The company is beefing up its portfolio to generate a net income of P1 billion by 2016 and P4.8 billion by 2020.

DoubleDragon is a 50-50 joint venture between Injap Investments Inc and Honeystar Holdings Corp. Jollibee founder Tony Tan Caktiong owns Honeystar, while Mang Inasal founder Edgar "Injap" Sia II owns Injap Investments.

- Interaksyon

BSP ready to unleash more tools to keep banks' real estate bets in check

Monetary authorities are still unperturbed by the rise in domestic banks' exposure to real estate, but they are ready to implement more measures to halt any formation of bubbles in the property market.

In a briefing on Thursday, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo the growth in the exposure of banks to the property sector to 22 percent of their total loan portfolio is not yet worrisome but is "something we need to monitor."

"This is not to say that there is a possibility of an asset bubble in the industry. What you look for is the pricing in terms of capital values, rentals, vacancy rates and occupancy rates of residential units and office space," Guinigundo said.

The central bank official said that so far, vacancy rates for office space have been dipping, which meant that there is still sufficient demand despite the continued construction of buildings within Makati and Ortigas business districts.

Moreover the present levels of capital values and other price indicators in real estate are still lower than what the industry saw in 1997.

In short, there is still no overstretched valuation in the industry, Guinigundo said.

To know where the property sector is going one must look at domestic credit because it "fuels any undue exposure of banks to real estate," he said, adding that the ratio of credit to gross domestic product (GDP) with the long-term trend is still below the threshold level of 2 percent.

Earlier, the BSP said it would order banks to undergo property stress test as property loans and investments rose 6.8 percent to P900 billion in the second quarter of 2013.
Of the total amount of bank credit, P708 billion are composed of property loans, which now make up 18 percent of the total loan portfolio of commercial banks as of March 2014. On average, loan growth to property sector hit 21.2 percent year-on-year in the past 15 months to March 2014.

“Real estate exposure historically has been the trigger of problems in many banking systems. It’s quite natural for regulators including BSP to be particularly wary of this. We’re implementing a risk-based type supervision,” BSP Deputy Governor Nestor Espenilla told Bloomberg.

More measures on the way

Aside from the stress-test to ensure that banks are kept in their proper place, macroprudential measures are already put in place, including the maximum exposure to real estate, loan-to-value and single borrowers' limit. Guinigundo said all of these tools would moderate the kind of credit going into the real estate sector.

"Moving forward, the Monetary Board can always consider additional macroprudential measures, if and when necessary," he added.

Earlier, Jones Lang LaSalle said there might be a slight oversupply of residential units towards the end of the year as six-year-old projects have already been finished.

Again, this is no cause for worry, Guinigundo said, as the market has its own mechanism to correct itself "but the banks have to rethink their credit standards."

- Interaksyon

MEGAWORLD CORPROATION (MEG): Offers to acquire AGI’s stake in GERI

MEG to acquire GERI stake from AGI. MEG has agreed to purchase the 49.20% stake of Alliance Global Inc. (AGI) in Global-Estate Resorts (GERI) for a total purchase price of Php10.43 Bil or Php1.93 per share. After the acquisition, MEG will own 74.96% of GERI and will initiate a mandatory tender offer for the remaining GERI shares held by minority shareholders at Php1.93 per share.

Financing not a problem. MEG will pay for the transaction in cash as it has Php31.75 Bil in cash and cash equivalents as of end FY13. MEG may temporarily have to borrow around Php7 Bil but this should not be a problem for the company. MEG has expressed plans to sell its 8.99% stake in RWM which is valued at Php13.82 Bil based on the current market price of RWM. The sale of this would put MEG back in net cash position.

Consolidation complete.The acquisition will complete the consolidation of all real estate businesses of AGI under MEG, enabling MEG to capitalize on growth opportunities of the property market. We have no changes in our fair value estimate for MEG at this point but we believe this will be NAV accretive to MEG as the company is in a better position to unlock the value of GERI’s landbank through future developments.

Reiterate BUY on MEG. We reiterate our BUY rating on MEG with a fair value estimate of Php5.48.

- Col Financial

Thursday, May 8, 2014

Metro Pacific eyes parent firm's stake in Thai tollway operator

Metro Pacific Investments Corp (MPIC) plans to acquire the stake of parent firm First Pacific Co Ltd in a Thai toll road operator.

In a briefing, MPIC chief financial officer David Nicol said the company will purchase First Pacific's 22 percent stake in Don Muang Tollway Public Co Ltd (DMT).

"We're looking at the idea at the moment," Nicol said.

In November, Hong Kong-based First Pacific and MPIC formed a 75-25 joint venture -- FPM Infrastructure Holdings Ltd -- which acquired a 29.45 percent stake in DMT valued at $100 million. This was the joint venture's maiden investment.

MPIC is also keen on buying the shares owned by Thailand's Ministry of Finance to wrest control of the toll road operator.

“We will in due course negotiate with the Ministry of Finance to acquire the 25 percent stake and we still aspire to do that. It's been difficult in Bangkok lately and we're waiting for that to calm down before we engage in discussions," Nicol said.

Working under a 27-year concession ending in 2034, DMT operates a 21.9-kilometer six-lane elevated toll road stretching from Din Daeng in central Bangkok past Don Muang Airport and on to the National Monument in the north of the capital.

Traffic on the toll road has increased since budget airlines began relocating to the airport in October 2012. In the first nine months of 2013, traffic averaged 77,000 vehicles per day on the original toll road.

Expansion is seen as a result of population and economic growth in Bangkok and the full reopening of Don Muang Airport’s Terminal 2 in 2016 as budget airlines continue relocating there.

MPIC has interests in power generation, water distribution, healthcare and tollway operations, the last through unit Metro Pacific Tollways Corp.

- Interaksyon

PSEi rebounds on Wall Street gains, Q1 earnings

racking gains overnight on Wall Street and first quarter earnings from home-grown companies, Philippine share prices rebounded Thursday.
The bellwether PSEi was up 32.56 points or 0.48 percent to 6,781.07 as of 10:27 a.m. The broader All Shares index advanced by 18.23 points or 0.45 percent to 4,083.46.
"We followed the Dow and S&P, which were up last night," Elizabeth Abadillo, analyst at Angping & Associates Securities Inc., told GMA New Online.
Overnight, the Dow Jones industrial average and the Standard & Poor's 500 Index were up as the Federal Reserve signaled a policy that continues to support the world's biggest economy, Reuters reported.
Also keeping the market buoyant are corporate earnings, Abadillo said.
"The market is showing some strength, and may breach the 6,800 level," she said.

Profit-taking pares gains, PSEi marginally higher at noon break

Share prices on the Philippine Stock Exchange were marginally higher at the noon recess Thursday as investors resumed to take profits after the market opened on a strong note.
The main PSEi was up 6.43 points or 0.09 percent to 6,754.94 at the break. The broader All Shares index was up 7.81 points or 0.19 percent to 4,073.04.
AB Capital Securities Inc. research head Jose Vistan told GMA New Online momentum on the sell side picked up towards the end of morning trade.
"Coming from weakness in the past two days, investors took the opportunity to lighten up positions further," he said.
Earlier in the session, trading was fueled by US Federal Reserve chief Janet Yellen's dovish policy statement that an accommodative stance would have to continue as the US economy still needed some help, Vistan said. "This fueled global markets, including us."
Overnight, the Dow Jones Industrial average and the Standard & Poor's 500 Index registered gains, Reuters reported.

- GMA News

Tuesday, May 6, 2014

PLDT says back on growth path, as 1Q earnings climb 2 pct

Philippine Long Distance Telephone Co (PLDT) on Tuesday said its net income rose in the first quarter, signaling the company’s return to its growth path this year.

The country's largest telecom company reported a net income of P9.4 billion in the January to March period, up two percent from P9.2 billion in the same three months of last year.

Excluding foreign exchange transactions and other non-recurring items, core profit hit P9.8 billion, also up two percent from P9.6 billion in 2013.

PLDT said the first-quarter profit growth was due mainly to higher service revenues and equity share in earnings of subsidiaries.

“The structural shift in our revenue mix continues, wherein growing revenues from our data businesses replace those from our legacy businesses such as NLD, and fixed and wireless international voice," Manuel V. Pangilinan, PLDT chairman said. NLD refers to the national long distance voice service.

Consolidated revenue climbed three percent to P41.2 billion from P39.9 billion last year.

Pangilinan attributed the growth in service revenues to the 22 percent rise in broadband and data revenues, which more than made up for the two percent decline in legacy revenues and a similar drop in combined local exchange carrier, cellular domestic voice and SMS revenues.

Total broadband, data and internet revenues climbed 24 percent year-on-year to P7.6 billion, with its share to total revenue at 18 percent.

The PLDT Group’s combined broadband subscriber base stood at 3.6 million at end-March. Smart Communications brought in two million, while Sun Cellular had 548,000. PLDT's fixed broadband subscribers contributed another million.

Wireless service revenues increased two percent year-on-year to P28.9 billion, buoyed by the continued rise in both non-SMS data and cellular voice revenues.

The PLDT Group’s total cellular subscriber base hit 70.5 million at the end of the first quarter. Of the total, Smart had 25.9 million under its mainstream Smart brands, value brand Talk ‘N Text ended with 29.5 million, and Sun Cellular, 15.1 million.

"Our revenue mix remains dynamic. Our task is to manage the interplay among our businesses by pushing those sectors which are growing and stable, while maximizing the long tail of our legacy segments. Given the company’s performance in the first quarter of 2014 and the outlook for the rest of the year, I can say that PLDT is firmly back on the growth path, and on track to meet our core net income guidance of P39.5 billion for the full year,” Pangilinan said.

Napoleon L. Nazareno, president and chief executive of PLDT and Smart, said the company continues to invest in its network to provide “quality of experience to our customers.”

"As part of our vision of ‘broadbanding the nation’, we are deploying the latest digital, all-IP technologies that will enable us to deliver products and services that respond to various speed and volume requirements to our subscribers. Moreover, we are building up scale in order to achieve efficiencies that will lower the cost of providing our services and help strengthen the international competitiveness of the country,” Nazareno said.

For this year, PLDT's capital expenditures would be in the range of P31-32 billion or about 18-20 percent of service revenues.

Capex in the first quarter alone amounted to P2.2 billion compared with P3.1 billion in the same period last year.

On-going network initiatives include expanding 3G and 4G/LTE coverage, increasing the group’s fiber footprint which now stands at nearly 85,000 kilometers, continued integration of the Smart and Sun networks, as well as projects to enhance the group’s multimedia capabilities.

- Interaksyon