Philippines News: FREE

Get an edge on the Philippine Stock Market in this comprehensive tool for Filipinos and foreign investors.
Get it on Google Play

Thursday, November 27, 2014

3Q14 GDP growth disappoints as government spending and agriculture drops

Government and agriculture down

3Q14 GDP growth reached 5.3%, below consensus forecast of 6.4%. Weak spending from the government was largely responsible for the below expected GDP growth. During 3Q14, government spending dropped by 2.6%, sustaining the weakness displayed during the first half. For the first nine months of the year, government spending fell by 0.1%. Weakness of agriculture also dragged GDP growth. During 3Q14, agriculture spending fell 2.7%. On the positive side, consumer spending remained resilient while exports continued to grow. Consumer spending increased by 5.2% during 3Q14, after growing by 5.8% in 1Q14 and 5.3% in 2Q14. Exports rose by 9.8% during 3Q14, after increasing by 12.6% in 1Q14 and 10.3% in 2Q14. Capital formation also rebounded, rising by 3.6% in 3Q14, after falling by 2.4% in 2Q14. Growth was driven by the rebound of the construction as construction spending of the private sector increased by 15.7%, offsetting the 6.2% drop in construction spending of the public sector. By industrial origin, the manufacturing industry also remains strong with 3Q14 growth reaching 7.2%.

Maintaining positive long term growth outlook

Despite the disappointing 3Q14 GDP growth number, we maintain our positive longer term view of the economy. As discussed earlier, the weak 3Q14 GDP growth number was largely due to weaker government spending. Unlike in the past, this was not due to the weakness of government finances but rather delays in disbursement of funds. The said problem is easier to address in our opinion. Outside of the government, other drivers of economic growth remained strong. Consumer spending remained resilient, exports continued to pick up, while investment spending rebounded. The manufacturing and construction sectors also continued to grow significantly
- COL Financial

Monday, November 24, 2014

Ayala sees completion of Daang Hari-SLEX toll road no later than March next year

The Aquino administration's first public private partnership (PPP) project is set to open in the first quarter of next year.

In a briefing today, AC Infrastructure Holdings Inc president Noel Kintanar said construction of the Muntinlupa Cavite Expressway (MCX), formerly known as Daang Hari-SLEX Connection Road is scheduled for completion in the next three to four months.

The road will connect Muntinlupa City to Cavite through Bacoor. As of November, construction was over 60 percent complete.

Kintanar said the toll for the four-kilometer, four-lane road would be set at P17 for Class 1 vehicles, and P34 for Class 2 vehicles. Daily vehicle traffic at the toll road is expected to reach 50,000.

MCX would relieve traffic congestion along the Daang Hari Road and Commerce Avenue, giving commuters from the Cavite towns of Molino and Bacoor faster and easier access to the South Luzon Expressway.

The first PPP venture that the Aquino administration bid out, the Daang Hari-SLEX Link was supposed to have been completed in the third quarter of this year but the private contractor moved its timetable because of delays in securing a right of way with South Luzon Tollways Corp (SLTC). Controlled by San Miguel Corp, SLTC operates SLEX.

Both parties agreed on the interconnection only in December last year.

Ayala-owned AC Infrastructure bagged the project linking Cavite to Metro Manila through SLEX in December 2011.

The conglomrate invested around P2.2 billion in the project, which it will operate and maintain for 30 years.

The road will provide southern Metro Manila with a high-standard highway within a 200-kilometer radius of the Philippine capital and will serve as an alternative route to Cavite, decongesting traffic in some parts of the province and Las Pinas and Muntinlupa, specifically the Alabang-Zapote Road and Commerce Avenue.

- Interaksyon

Thursday, November 20, 2014

SM Prime to open 5 new malls next year

SM Prime Holdings Inc. (SMPH), the umbrella property firm of the SM Group, will continue growing its empire of malls with the planned opening of four to five new branches next year.

Jeffrey C. Lim, chief finance officer of SM Prime, said four of the five malls would be situated in the country, while one would open in China.

“We’re opening four or five, including Tianjin,” Lim said in an interview on the sidelines of yesterday’s ING Finex CFO of the Year Awards.

For the local sites, Lim cited Cebu and Cabanatuan as sure locations for the upcoming malls along with the planned expansion of its mall in Bulacan.

“Given the size that we have now, the new malls would increase our gross floor area (GFA) by another eight percent,” he said.

Over the long term, SM Prime earlier said it intends grow its malls to 85 (74 in the Philippines and 11 in China) with a GFA of 6.95 million square meters (sqm) in 2018.

SM Prime recently opened SM Center Angono in Rizal, its 50th mall in the Philippines.

SM Prime built its very first mall in 1983 on North EDSA and opened it two years after, starting with a GFA of only 125,000 sqm.

Among its 50 malls in the Philippines, three are included on the world’s 10 largest malls, one of which includes SM North EDSA.

The other two are SM Megamall and SM Mall of Asia. Together, these three malls have a combined GFA of 1.4 million sqm.

“We are committed to continue our expansion towards the provincial areas which remains our strategic direction in the Philippines. In almost 30 years, SM Malls have become an important element in every community. We will also continue to expand and improve the look and feel of our existing malls to keep them current and exciting for our customers,” SM Prime president Hans T. Sy said earlier in a statement.

- ABS-CBN News

Max's snags SEC approval of maiden share sale

The Securities and Exchange Commission (SEC) has cleared the share sale of Max's Group Inc, its first fundraising in the stock market since taking over Pancake House Inc.

In a text message, SEC commission secretary Gerard Lukban said the corporate regulator approved the P4.6-billion equity offering of the homegrown casual dining restaurant operator in a meeting today.

Documents from the SEC show Max's will sell 300.14 million shares at P15.33 apiece or 155.93 million shares at P29.50 each. However, the listed firm recently announced the reduction in the maximum price of its share sale to P21.75 per share.

BPI Capital Corp was tapped as bookrunner, issue manager and lead underwriter for the transaction.

Net proceeds from the primary component of the offering will fund the expansion of stores and commissaries, working capital and other general corporate purposes. Proceeds from the secondary share sale will be used to settle a portion of the debt incurred to pay for the acquisition of a controlling interest in Pancake House.

Max’s completed the takeover of Pancake House in February, acquiring 89.95 percent of the listed firm's outstanding capital stock to become the biggest player in the local casual dining restaurant category with an aggregate market share of 28.3 percent in terms of sales value for 2013.

In August, the SEC approved the capital stock hike of Pancake House, allowing the Max's Group of Companies to fold all its restaurant business under the listed firm. It now owns Max's Restaurant, Max's Corner Bakery, Krispy Kreme, Jamba Juice, Pancake House, Dencio's, Kabisera ng Dencio's, Teriyaki Boy, Sizzlin' Pepper Steak, Le Coeur De France, The Chicken Rice Shop, Singkit, Maple and Yellow Cab.

Brands under Pancake House suffered losses of P31.36 million in the first nine months of the year, a reversal of the net income of P116.11 million a year ago, as the Max's Group streamlined operations following its takeover early this year.

- Interaksyon

Thursday, November 13, 2014

Jollibee allots P9.1 billion for 2015 capex

Jollibee Foods Corp. (JFC) posted a 15 percent increase in its profit for the third quarter of the year on the back of higher revenues and improved operating margin.

JFC, the country's largest food service company, said its net income attributable to equity holders of the parent jumped to P1.17 billion for the third quarter of 2014 from the P1.02 billion posted in the same period last year.

Revenues reached P22 billion in the period, 11.6 percent higher than the P19.8 billion recorded last year.

Its operating margin improved to 6.4 percent this year from the 6.1 percent last year.

From January to September, JFC's net income attributable to equity holders of the parent surged 16.5 percent to P3.6 billion from the P3.1 billion in the same period in 2013.

JFC saw a 12 percent increase in its system wide sales, a measure of all sales to consumers, both from company-owned stores and franchised stores, as its Philippine business grew by 13 percent and the foreign business by 9.6 percent.

“The growth was driven by a 7 percent to 8 percent same store sales growth and a 5.7 percent growth in store network,” the company said in a disclosure to the stock exchange.

Same store sales growth refers to sales from restaurants that were already open for at least 15 months, excluding sales growth from new store opening.

For the first nine months of the year, JFC's sales rose by 13.6 percent consisting of a 13.4 percent domestic growth rate and a 14.5 percent growth abroad.

JFC operates the largest food service network in Philippines. The Jollibee Group opened 148 new stores in the first nine months of the year, of which 114 were in the Philippines and 34 were in foreign operations.

As of end-September, the JFC Group has 2,258 stores nationwide under the brands Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, and Burger King. It has a total of 2,849 stores worldwide.

2015 capex

JFC said its board of directors approved a capital expenditure budget of P9.1 billion for 2015, 42 percent higher than the estimated P6.3 billion spending this year.

The firm said that P6.7 billion of the amount will be spent for its operations in the Philippines, P1.7 billion for China and the balance for the US and Southeast Asia and the Middle East.

“The 2015 capital expenditures will be mostly for the store openings in the Philippines and foreign operations, store renovations in the Philippines and abroad, investments in commissary construction and commissary capacity increase in the Philippines,” JFC said.

It added that the investments will be financed by its cash reserves and cash expected to be generated from next year's operations.

- ABS-CBN News

Growth in Metro Manila leads increase in Manila Water's nine-month income

Higher billed volumes at its Metro Manila concession pushed up Manila Water Co Inc's earnings in the first nine months of the year.

In a financial report, Manila Water said its net income increased by 7 percent to P4.6 billion in the January to September period from P4.3 billion in the same nine months of last year.

The increase was driven largely by operating revenues growing by about the same level to P12.2 billion from P11.5 billion in 2013.

The bulk of Manila Water's operating revenues comprises water bills, which account for 79 percent of the total. The rest comes from environmental and sewer charges, connection fees, and management contracts.

The improved operating revenue was brought about by a 3.5 percent growth in the billed volume at the east zone concession of state-run Metropolitan Waterworks and Sewerage System.

The Ayala-led company derived 88 percent of its earnings from the MWSS concession.

Besides growth from its Metro Manila and Rizal operations, contribution from the utility's other domestic subsidiaries rose 48 percent year-on-year to P1 billion.

Likewise, Manila Water's subsidiaries in Vietnam --Thu Duc Water and Kenh Dong Water, together with Saigon Water Infrastructure -- contributed P263 million in earnings, up 27 percent from the previous year.

Manila Water aims to spend P5 billion this year for the rehabilitation and construction of facilities to improve water and sewer services in its MWSS concession area.

- Interaksyon

Tuesday, November 11, 2014

Filinvest Land profit jumps 19 pct in Jan-Sept

Gotianun family-led residential developer Filinvest Land Inc. (FLI) reported its 9-month consolidated net income rose 19 percent to P2.89 billion.

In a statement, FLI said its revenues grew by 27 percent to P11.82 billion from January to September, on the back of continued growth in its residential business and office leasing operations.

Real estate revenues jumped 31 percent in the 9-month period to P9.16 billion, driven by strong sales in its horizontal housing projects and medium-rise building projects under the "Oasis" brand and high-rise buildings such as "Studio Zen."

Revenues from rental assets increased 10 percent to P1.65 billion in the January to September period. This after FLI recognized additional revenues from its new office buildings “Filinvest One” and “Plaz@ E” at Northgate Cyberzone located in Filinvest City, Alabang.

"We believe that the rental business will provide the stability of revenue streams. This is why a significant amount of our capex will be earmarked for investment properties. We are targeting to increase our gross leasable area to about 995,000 square meters within five years, which is almost 3 times our current office and retail space inventory," FLI CEO and President Josephine Gotianun Yap said.

FLI said it is on track to launch P17.5 billion worth of residential projects this year. Among the projects launched so far is 100 West, a mixed-use development high-rise tower along Sen. Gil Puyat Avenue in Makati.

"We are confident of sustained growth for the company as we continue to launch new residential projects and execute our plans to increase offices as well as retail spaces in key locations nationwide," Gotianun Yap said.

- ABS-CBN News

Lower trading gains pull down Metrobank's nine-month profit

Nine-month profit at the country's second largest lender fell by a third from a year ago.

In a disclosure to the Philippine Stock Exchange, George Ty-owned Metropolitan Bank & Trust Co reported earnings of P15.534 billion in the January to September period, down 31 percent from the P22.713 billion in the same nine months of last year.

For the third quarter alone, net income however rose 73 percent to P4.728 billion this year from P2.725 billion last year.

Lifting third-quarter results was net interest income of P11.656 billion, a 12 percent increase from last year's P10.322 billion. Net interest income largely emanates from the bank's gains from its lending business less the cost of money lent out.

For the first nine months, net interest income rose by 23 percent to P34.015 billion this year from P27.595 billion in 2013.

The bank's loans and receivables portfolio increased by 14 percent to P697.3 billion at end-September this year from P611 billion at end-December last year. The increase was funded by a 9 percent uptick in low-cost deposits to P1.106 trillion from P1.016 trillion over the same period.

Metrobank said loan demand was strong among its commercial clients, including the middle market and SMEs. Despite the increase in lending, the bank's consolidated non-performing loan ratio of 1.12 percent at end-September was below the 1.39 percent last year.

“The robust core income growth reflects positively on our strategy. Our thrust is to maximize returns from traditional revenue sources while prudently managing balance sheet growth," said Metrobank president Fabian Dee.

Non-interest income, which includes gains from trading and fee-based income, climbed by nearly a third to P5.420 billion in the third quarter of this year from P4.128 billion in the same three months of last year.

Year-to-date, non-interest income rof P19.030 billion was still behind P32.722 billion a year ago when banks enjoyed strong trading gains.

“We remain optimistic about the prospects of the domestic economy. We are continuously building our capabilities, and we will accelerate our expansion into new growth areas, increase sales coverage and strengthen client relationships to ensure sustainable profitability and capital efficiency," Dee said.

Metrobank opened 31 local branches this year to bring the total to 887, still the largest in the industry.

- Interaksyon

Thursday, November 6, 2014

Community mall developer DoubleDragon's Jul-Sep bottom line balloons

DoubleDragon Properties Corp stayed on course to hit its income target for the year on the back of solid earnings in the third quarter.

In a disclosure to the Philippine Stock Exchange, the real estate joint venture of the founders of fast food giants Jollibee and Mang Inasal said it pocketed P253.8 million in the July to September period, significantly higher than the P15.5 million registered in the same period last year.

Quarter-on-quarter, DoubleDragon's profit quadrupled from the P63.1 million booked in the April to June period. Nine-month earnings ballooned to P337.8 million from P28.9 million a year ago.

While net income at end-September only accounts for 64 percent of the full-year target, DoubleDragon said it is on track to reach its P525-million earnings guidance for the entire 2014 as "sizable" revenues from existing and new businesses are expected to be recognized in the fourth quarter of the year.

"The company has maintained a strong market demand for its various projects and our whole team remains thankful for the continued support of everyone," DoubleDragon chairman Edgar "Injap" Sia II.

In addition, the property company noted that it is gaining momentum in executing its commercial and office projects in Metro Manila as well as community malls in key areas around the country.

So far, DoubleDragon has secured 13 sites for its CityMall chain, putting its subsidiary CityMall Commercial Centers Inc on track to meet the target of operating 25 community malls by end-2015, and 100 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 Sia II owns Injap Investments.

The company is beefing up its portfolio of developmental and recurring income-generating projects to generate a net income of P1 billion by 2016 and P4.8 billion by 2020, making it one of the biggest players in the local real estate scene.

- Interaksyon

Wednesday, November 5, 2014

Phoenix Semiconductor prices IPO below the ceiling

The local arm of one of Samsung's South Korean suppliers has set the price of its initial public offering (IPO) below the ceiling.

In a letter to the Philippine Stock Exchange, BDO Capital and Investments Corp president Ed Francisco said Phoenix Semiconductor Philippines Corp pegged the final offer price at P3.15 per share, allowing the company to raise P1.02 billion from the maiden share sale.

Including the oversubscription option, gross proceeds from the IPO will increase to P1.45 billion.

'We did not price at the maximum so there is an upside for investors," Francisco said. BDO Capital is the sole issue manager and lead underwriter of the offering.

The final offer price is equivalent to a price-earnings (PE) ratio of 9.5 times 2014 earnings, a source said. PE is a valuation tool that measures how much an investor is paying for every peso in earnings generated by a company.

Phoenix Semiconductor chief finance officer Kim Dong Joo had projected a growth of at least 10 percent in earnings this year from $4.24 million in 2013 on the back of a 16 percent expansion in revenues from $209.68 million last year.

The company is selling 459.39 million shares, including the 134.63 million shares to cover the oversubscription option. It will have a market capitalization of P6.82 billion after the offering.

The offer period will run from November 10 to 21. The shares will be listed on the Main Board of the PSE on December 1.

Net proceeds from the primary offer will be used to fund Phoenix Semiconductor's expansion program through the acquisition of machines, building improvement and the construction of a new facility within its 15-hectare area at the Clark Freeport Zone in Pampanga.

The expansion program will enable the company to serve new clients. At present, Phoenix Semiconductor serves only Samsung Electronics Co Ltd and its customers.

Phoenix Semiconductor is a unit of STS Semiconductor & Telecommunications Co Ltd. STS is 28.10 percent owned by Seoul-based Bokwang Co Ltd, which has businesses in leisure, retail, advertising and culture, financial services and manufacturing.

- Interaksyon

Tuesday, November 4, 2014

AboitizPower, Norwegian partner begin rehab of reservoir in northern Philippines

The joint venture of Aboitiz Power Corp and Statkraft Norfund Power Invest AS of Norway has broken ground for a new hydropower project in the provinces of Ifugao and Isabela.

In a disclosure to the Philippine Stock Exchange, AboitizPower said unit SN Aboitiz Power-Magat Inc (SNAP-Magat) and the National Irrigation Administration have commenced with the improvement of the latter's Maris Reservoir located between the said provinces.

The project aims to increase the storage capacity of the Maris Reservoir, which is used to irrigate nearby farmlands, and use the same for power generation subject to release protocols.

Emmanuel V. Rubio, SNAP president, earlier said the company aims to draw an additional 7 megawatts (MW) from the Maris Reservoir project, which is estimated to cost between $2.5 million and $3.5 million per MW to put up.

Work is scheduled to begin in January for completion by first quarter of 2016.

The Mariz Reservoir project would optimize releases from SNAP-Magat's 380-megawatt (MW) Magat hydropower plant.

Besides the project, the joint venture also plans to expand the Magat plant by another 115 MW once given the go signal by regulators.

The proposed expansion involves the use of the Magat Dam's provision for two additional penstocks or water intake gates; and the installation of a pump storage to generate additional electricity.

- Interaksyon

Listed shell company acquires a third of Marcventures

Bright Kindle Resources & Investments Inc was cleared to buy a third of nickel miner Marcventures Holdings Inc.

In a disclosure to the Philippine Stock Exchange, Bright Kindle, formerly Bankard Inc, said its board of directors approved the acquisition of 600 million shares in Marcventures, representing 32.94 percent of the miner's total issued and outstanding capital.

Bright Kindle and Marcventures have some common directors, including their chairman Cesar C. Zalamea and president Isidro C. Alcantara Jr, who was authorized to determine the price as well as the terms and conditions of the acquisition. Shares in the nickel miner fell 0.16 percent to close at P6.10 per share.

The transaction is up for shareholders' approval in a special meeting next month.

A group of investors led by RYM Business Management Corp took over shell company Bankard from the Yuchengco-owned Rizal Commercial Banking Corp (RCBC) and its subsidiary RCBC Capital Corp in a transaction coursed through Philippine Business Bank’s (PBB) Trust and Investment Center.

According to Marcventures’ latest regulatory filing, the trust unit of Alfredo Yao’s PBB owns 600 million shares in the listed firm.

After transferring all of its assets and liabilities including its credit card business to RCBC, Bankard changed its name to Bright Kindle Resources and Investments Inc and primary purpose to that of an investment holding firm.

Last month, Marcventures’ wholly-owned unit Marcventures Mining and Development Corp (MMDC) received a clearance from the Mines and Geosciences Bureaus (MGB) to resume its mining operations in Surigao del Sur.

In April, the MGB ordered MMDC to shut down operations for mining outside its approved area. MMDC holds a mineral production sharing agreement for a 4,799- hectare tenement located in Cantilan, Surigao del Sur.

- Interaksyon

Saturday, November 1, 2014

These 4 Philippine property stocks are worth buying now

Maybank ATR Kim Eng (ATRKE) has maintained an overweight rating on the property sector after the Bangko Sentral ng Pilipinas (BSP) brushed aside concerns of a real estate bubble.

"We think the latest statements by Governor Tetangco should help alleviate concerns not only about a property bubble but also that the central bank is acting to slow property lending..." Maybank ATRKE said in a research note.

Maybank ATRKE was referring to the recent remarks made by BSP Governor Amando Tetangco that there was no clear evidence of a bubble in the real estate sector, although prices or valuations in some segments have risen too fast.

"This confirms our view that last week's revised credit risk rules are neutral for the property sector as it introduces no new regulations for property lending," it added.

In recent days, the central bank unveiled a string of measures aimed at strengthening the local financial system, including capping the maximum loan value for mortgages at 60 percent. Previously, only universal and commercial banks were required to observe this cap, whereas other lenders could lend as much as 80 percent, thus requiring the borrower to put in the remaining 20 percent as equity.

Maybank ATRKE's top picks in the sector are Ayala Land Inc for its “brisk execution in residential sales and recurring income build-up," SM Prime Holdings Inc for its "leadership in retail and opportunistic stance on residential real estate,” and Megaworld Corp for its “top position in office space development and bigger land bank."

Maybank ATRKE also picked Filinvest Land Inc because its "price multiples have not yet caught up with more aggressive plans to build up its recurring revenue base."

"Share prices of these companies have only slightly recovered after the selloff with the confusion on [real estate mortgage] collateral value and [loan-to-value] ratio limit. We continue to view this as an opportunity to accumulate," it added.

- Interaksyon