The Philippine Star 08/09/2006
Share prices closed 0.46 percent lower yesterday after Philippine Long Distance Telephone Co. (PLDT) reported a weaker first half net profit, dealers said.
They said investors were also sidelined, awaiting signals from US monetary authorities, who will decide later in the day whether or not to end a two-year cycle of interest rate hikes.
The composite index ended down 10.88 points at the day’s low of 2,367.75. It touched a high of 2,382.19. The broader all-shares index retreated 3.49 points to 1,453.44.
Losers outnumbered gainers 57 to 45, and 43 stocks closed flat with 2.67 billion shares traded valued at P1.07 billion.
"The first-half (PLDT) net profit of P15.31 billion is still in line with our full-year forecast of P32.9 billion," said Nestor Aguila of DA Market Securities.
"I don’t think the weak second-quarter results should be a big issue given the strong growth in PLDT’s mobile subscriber base."
Elsewhere in the market, analysts said investors were tentative until the US Fed meeting is out of the way.
"Everyone is waiting for the Fed," said Jonathan Ravelas of Banco de Oro.
"Investors are speculating that the Fed may take a pause, but recent US economic data seem to be on the contrary, so there is an uncertain mode right now and investors prefer to stay out of the market for the meantime," he added.
Dealers also said the local market was also due for a correction after rising steadily in the past three sessions.
"Investors are taking a breather, digesting the earnings reports that have come out so far," said Mark Canizares of CitisecOnline.com.
PLDT closed down P25 to P2,080 after reporting a 7.8-percent drop in net profit to P6.73 billion for the three months to June due to increased depreciation costs and foreign exchange losses, although core earnings rose.
Parent Ayala Corp. rose P2.50 to P427.50 a day after reporting that its first-half net profit nearly doubled from a year ago on the back of increased contributions from units and lower debt financing expenses.
San Miguel A was steady at P65 while its B shares added 50 centavos to P73.
Investors headed for the sidelines ahead of the Federal Reserve meeting yesterday," said AB Capital Securities analyst Erwin Balita. "The market remains divided over whether the Fed will pause or raise US rates again. But if ever the Fed raises rates, chances are that would be the last of the series of rate hikes."
Ayala Land was the most actively traded stock, shedding 1.8 percent to P13.50 on heavy volume of 14.83 million shares traded. Analysts said the stock succumbed to profit-taking after rising 3.8 percent Monday. — AFP, AP
Wednesday, August 09, 2006
Market eases on PLDT's weaker first half income
PLDT profit falls 7% to P15.3B on forex losses, higher taxes
By Mary Ann Ll. Reyes
The Philippine Star 08/09/2006
Telecommunications giant Philippine Long Distance Telephone Co. (PLDT) reported a consolidated net income of P15.3 billion during the first half of 2006, seven percent lower than the P16.5 billion realized in the same period last year, due to additional depreciation expenses, foreign exchange losses, and a higher tax rate.
But the PLDT group core earnings (before the effects of forex gains, deferred tax assets, and additional depreciation) grew 11 percent to P15.2 billion from P13.7 billion in 2005.
PLDT chairman Manuel Pangilinan emphasized core earnings are a better gauge of the company’s performance as he expects this trend of increasing core earnings and declining reported net earnings to continue for the rest of the year, "although reported and recurring net income numbers will converge soon."
The growth in core earnings, he said, was achieved through the increased take-up of both wireless and fixed line data services, continued focus on containing cash costs, and a signi-ficant decline in interests costs.
"PLDT’s performance is a creditable one if you look at core earnings, because this was realized despite a challenging revenue environment," Pangilinan said.
Forex losses during the first half of 2006 reached P200 million compared to a P2.2-billion forex gain in the same period last year, even as Pangilinan added that last year, there were no significant accelerated depreciation charges compared to this year.
PLDT is sticking to its core earnings guidance number for the whole of 2006 of P32 billion, or an 11 percent growth compared to the restated core earnings of P29 billion in 2005. "But it’s difficult to predict what our reported net earnings will be for the year. There is no way to control how the forex rate will move," Pangilinan pointed out.
Second half core earnings are projected to be higher than those of the first semester period, as the company is expected to benefit largely from the robust growth in wireless subscriber numbers in the first half.
As a result of the core earnings growth, the PLDT board approved the declaration of an interim dividend of P50 per share, with record date of Aug. 21 and payment date of Sept. 21. The dividend declaration is based on a 60 percent payout of core earnings per share.PLDT expects to pay out a total of P9.1 billion of common dividends for this dividend declaration alone.
"The group’s excellent cash flow position and profits allow us to invest in future growth while continuing to attend to the needs of our various stakeholder," Pangilinan stressed.
PLDT officials also reported that consolidated service revenues rose by two percent to P60.6 billion. Group EBITDA (earnings before interests, taxes, depreciation and amortization) improved by seven percent to P40.4 billion while EBITDA margins rose to 67 percent as against 64 percent last year.
Consolidated capital expenditures increased to P12.4 billion as PLDT stepped up the upgrading and expansion of its fixed line and wireless networks. PLDT is currently upgrading about 200,000 fixed lines to the next generation network (NGN) while its wireless subsidiary Smart Communications has expanded its cellular network to support its ongoing initiatives and programs for 2G, wireless broadband and 3G. Total group capex for the year is expected to reach P20 billion, with capex as a percentage of service revenues remaining at 16 percent.
Meanwhile, the company reported that consolidated balance sheet continued to strengthen with net debt balance down by 35 percent to $1.3 billion (P70 billion).
In June 2006, PLDT’s other cellular subsidiary Pilipino Telephone Corp. (Piltel) voluntarily prepaid 45 percent of its outstanding debt or an aggregate amount of $176 million, representing excess cash flows from operations and was applied proportionally to prepay $56 million to third party creditors and $120 million to Smart, Piltel’s largest creditor. As of June 30, Piltel’s debt balance owed to third party creditors was $71 million.
Pangilinan projects that gross and net debt levels for the group will go down to $1.7 billion and $1.3 billion, respectively, even as he expects PLDT to be under-leveraged by end of next year when net debt drops to $1 billion.
Consolidated free cash flow remained strong at P17.4 billion despite increases in capex and working capital requirements.
Officials also reported that consolidated wireless service revenues rose to P38.6 billion for the first half of 2006, six percent more than last year’s P36.5 billion. Wireless EBITDA grew by eight percent to P25.8 billion compared with P23.9 billion for the first half of 2005 while EBITDA margins improved to 67 percent.
Smart and Piltel sustained their solid performances for the quarter, recording a four percent quarter-on-quarter growth in service revenues to P19.6 billion in the second quarter of the year. Smart’s EBITDA increased by eight percent in the second quarter to P13.4 billion, representing a 68 percent EBITDA margin.
Total cellular subscriber base for the first half of 2006 grew by over two million subscribers to 22.5 million. Smart recorded net additions of 980,000 subscribers while Talk N’ Text added about one million subscribers to end the first half of 2006 with 16.4 million and 6.1 million subscribers, respectively.
Cellular penetration rate was placed at 40 percent, with the country having 34 to 35 million wireless subscribers nationwide. "The market is reaching a maturing stage and the double-digit growths in subscriber numbers may no longer be there although we are optimistic that we can still hit a penetration rate of 50 percent in two to three years," PLDT president and CEO Napoleon Nazareno said.
Smart also had 58,000 wireless broadband subscribers as of the end-June 2006 under its Smart Bro wireless broadband service.
"We have been segmenting our market into smaller slices through our various SMS and voice call packages. This ability to offer attractive unlimited packages that give real value to our subscribers has enabled us to effectively defend our leadership position. These are exciting times as we begin the process of transforming Smart from a cellular company into a multi-service wireless communications company," said Nazareno.
PLDT also announced that its fixed line service revenues decreased one percent to P24.1 billion in the first half of 2006 from P24.2 billion last year as the increase in data revenues, from both corporate data services and residential DSL, was offset by declines in revenues of local exchange and ILD (international long distance) services. The peso has appreciated year-on-year by five percent, which impacted the dollar-linked revenues arising from the local exchange and ILD businesses.
PLDT DSL (digital subscriber line) continued its strong growth as broadband subscribers reached 109,000 while PLDT WeRoam had 6,600 subscribers as of the end of June 2006. Subscribers using Vibe dial-up Internet service also grew by 43,000 in the first six months of 2006 to 425,000. PLDT DSL and Vibe contributed P1.7 billion in revenues, up 43 percent from last year.
EBITDA for the fixed line group rose four percent to P14.2 billion while EBITDA margins improved to 59 percent compared with 56 percent for the same period last year.
Additional depreciation expenses of P3.9 billion were taken up in the first six months of 2006 due to a change in the estimated useful lives of certain fixed assets as the migration to NGN progresses, officials emphasized.
"The ongoing upgrade to NGN is expected to result in a simpler network architecture of fewer network elements but with a greater capability to provide data services at lower costs. The completion of the NGN upgrade will result in immediate reduction in power consumption and insurance costs as well as opportunities to do space rationalization," Nazareno pointed out.
He also noted that with the cellular industry moving past its rapid-growth phase, the need to shift into broadband and data services has become increasingly apparent. "Management understands the complexities and challenges of the changing market environment and we will manage new technologies in the context of our subscribers’s needs," Nazareno said.
For his part, Pangilinan pointed out that the mobile industry on 2G will continue to grow but not as spectacular, although still single-digit growth rates. But double-digit growth rates are expected to be realized from the data and broadband Internet business.
He expects the data side of the business as well as information and communications technology (ICT) to be the main drivers in terms of revenue growth. Out of the P61 billion in service revenues realized by the group, about 43 percent were realized from data compared to only 39 percent last year. "By next year, half of our revenues will be data-driven and by 2008, data will be exceeding voice," he added.
Consolidated data revenue increased by 12 percent during the Jan. to June 2006 period to P26.1 billion, offsetting a five percent decline in traditional voice revenues.
Pangilinan added: "Over the medium term, our goals are to continue achieving growth in our core businesses while establishing new revenue streams from recent investments, principally SPi. Our strong cash flows provide us with this "triple play" ability - new investments, sustained capital expenditures and increasing dividend yields. In this way, we address shareholder needs both for the present and for the longer term."
He added that this year will be a year to lay the foundation for earnings growth in 2007 and onwards.
He revealed that PLDT will expand its coverage and enhance its broadband and data capabilities through the NGN upgrade and roll out of multi-purpose cellular network elements. A large part of the P12.4 billion capex in the first half went to the ongoing upgrade of about 200,000 lines to NGN and the expansion of the DFON network and it is estimated that about P20 billion more will be invested for NGN over the next two years. As for 3G, Smart has invested $60 million so far, and any new investments will depend on how the public will respond to the new service.
Nazareno for his part disclosed that the Smart network now has the biggest text messaging capacity in the world, capable of handling over one billion text messages a day.
Meanwhile, ICT arm ePLDT reported service revenues of P1.8 billion for the first six months of 2006, a 36 percent increase from P1.3 billion realized in the same period last year, mainly driven by the continued growth in the call center business (ePLDT Ventus).
ePLDT recently acquired SPi Technologies, the second largest pure-play business process outsourcing (BPO) company and the ninth largest independent BPO service provider in the world.
ePLDT president and CEO Ray Espinosa revealed that they are exploring the acquisition, through SPi, of a US-based medical transcription company with a revenue base of about $20 million, to further SPi’s goal of becoming a significant player in the growing health care outsourcing industry.
http://www.philstar.com/philstar/news200608090701.htm
PLDT's buy rating maintained--Citigroup
INQ7 MONEY - BREAKING NEWS
August 09, 2006
Updated 11:22:56 (Mla time)
Cecille Yap
Xinhua Financial News Service
CITIGROUP said it has kept its buy rating on Philippine Long Distance Telephone Co (PLDT), looking past the year-on-year decline in the firm's second-quarter net profit to focus on its potential for further growth.
"We continue to view PLDT as an attractive capital management play in the next 12 months, and [in the] longer term as a growth play," Citibank analysts Karen Ang and Anan Ramachandran said in a note to clients.
The telecoms firm reported that its second-quarter net profit fell to 6.73 billion pesos from 7.30 billion the year earlier due to increased depreciation costs and foreign exchange losses, although core earnings rose.
First-half net income fell to 15.31 billion pesos from 16.52 billion in the same period last year.
Core profit -- which strips out the impact of foreign exchange gains or losses and derivative transactions --- rose to 7.64 billion pesos in the second quarter from 7.19 billion a year earlier. In the first half, it grew 11 percent year-on-year to 15.21 billion pesos.
PLDT is counting on its data and call center businesses to give its earnings a lift since revenue growth from its mobile phone business has started to taper off, officials said at a results briefing Tuesday.
Citigroup analysts said earnings contributions from PLDT's data and BPO businesses can no longer be ignored. They accounted for a combined 13 percent of PLDT's revenues in the second quarter, up from 10 percent a year ago and 7 percent in the same period in 2004. The contribution from these new businesses should further improve with the recent acquisition of BPO firm SPI Technologies, which PLDT said would raise call center revenues to 100 million dollars annually.
Citigroup expects PLDT to post core net profit this year of 32.6 billion pesos, slightly higher than PLDT management's guidance of 32 billion pesos. Core net profit last year stood at around 29 billion pesos.
At 10:50 am, PLDT was down 70 pesos or 3.37 percent at 2,010 pesos.
(1 dollar = 51.43 pesos)
http://services.inq7.net/express/06/08/09/html_output/xmlhtml/20060809-14305-xml.html
PLDT, SM Prime pace market's decline
PHILIPPINE stocks dropped on Tuesday, snapping a three-day climb.
Philippine Long Distance Telephone Co. (PLDT) fell after the nation’s largest phone company said second-quarter profit declined 8 percent on depreciation and foreign exchange loss.
“Oil prices are adding to the volatility in the market,” said Mark Canizares, an analyst at Citiseconline.com. “At the same time, investors are digesting the earnings results that are coming out.”
The Philippine Stock Exchange Index slid 10.88, or 0.5 percent, to 2,367.75 at the noon close in Manila, halting a three-day, 3-percent advance. The index rose as much as 0.2 percent earlier in the day.
Crude oil for September delivery rose as high as $77.30 a barrel Monday, the highest intraday price since July 17, on concern a pipeline closure in Alaska would disrupt supply for months. It recently traded at $76.72. Oil is 20-percent higher than a year ago.
SM Prime, the nation’s largest shopping mall operator, lost 30 centavos, or 3.7 percent, to P7.90. ALI, the nation’s third-largest shopping mall operator, fell 25 centavos, or 1.8 percent, to P13.50.
PLDT dropped P25, or 1.2 percent, to P2,080, snapping a three-day, 5-percent jump. The company said second-quarter profit fell to P6.7 billion from P3.7 billion a year ago.
Pilipino Telephone Corp. (Piltel), a unit of PLDT, dropped 5 centavos, or 1.4 percent, to P3.65, its lowest in nine sessions. Second-quarter profit slid 5 percent to P2.26 billion on higher costs from a debt payment, the company said Monday after the market closed.
Shares valued at P1.08 billion changed hands, 42-percent less than the six-month daily average. Losers beat gainers, 45 to 57, with 43 stocks unchanged.
Ayala Corp. added P2.50, or 0.6 percent, to P427.50, after climbing 1.8 percent Monday. Second-quarter profit tripled on higher earnings at its property, phone and banking units and gains from sales of shares in those ventures, the company said Monday after trading closed. Profit in the three months ended June 30 rose to P4.17 billion.
Corro-Coat Inc. surged 70 centavos, or 49 percent, to P2.12, its biggest ever jump. The shares rose 13 percent Monday after the paint maker said it would buy Chemrez Inc., Asia’s largest producer of biodiesel made from coconuts, in a share swap.
Global Equities Inc., a maker and distributor of absorbent cotton and personal care products, surged 9 centavos, or 28 percent, to 41 centavos, its highest close since January 26, 2001.
The shares rose on speculation the company will expand into outsourced business services including call centers, according to Citiseconline.com’s Canizares. “The speculation has made it a very volatile stock.”
Robinsons Land Corp., a builder of shopping malls, offices and homes, rose P1, or 8.9 percent, to P12.25, its biggest gain since February 15. The builder said Monday profit for the nine-months ended June 30 grew 21 percent to P1.23 billion on higher sales.
“The market is paying notice because of its earnings,” said Manny Cruz, head of research at Belson Securities Corp. in Manila. “The results give the impression that Robinsons is proceeding well with its property projects.”
http://www.businessmirror.com.ph/comp02.php
Tele/videoconferencing
The Corporate Corner
Jesus Enrique G. Martinez
corporate_corner@yahoo.com
TECHNOLOGICAL advances have made “telecommuting” and “virtual office” buzzwords in present business environments. The Securities and Exchange Commission (SEC) has recognized that it must respond to the exigencies of the times and the technological developments of the 21st century (SEC Opinion dated 09 August 2001).
The SEC issued Memo Circular No. 15-01 dated November 20, 2001 prescribing the guidelines for the conduct of teleconferencing and videoconferencing (that is, conferences or meetings through an electronic medium, with the participants not physically present and may be located at different local or international places) of the Board of Directors.
The Secretary of the meeting is responsible for ensuring that the integrity of the meeting via tele/videoconferencing is adequately safeguarded. Thus, technically sufficient tele/videoconference equipment and facilities should be used. The Secretary records the proceedings and prepares the minutes of the meeting. The Secretary also stores for safekeeping and marks the tape recording/s and other electronic recording mechanism to form part of the records of the corporation.
It is also the Secretary, who sends out the notices of the meeting to all directors in accordance with the manner of giving notice as stated in the corporate bylaws. The notice shall include (a) an inquiry on whether the director will attend physically or through tele/videoconferencing; (b) the contact number/s of the Secretary and office staff whom the director may call to notify and state whether he shall be physically present or attend through tele/videoconferencing; (c) the agenda of the meeting; and (d) all documents to be discussed in the meeting, including attachments, numbered and duly marked by the Secretary in such a way that all the directors, physically or electronically present, can easily follow, refer to the documents and participate in the meeting.
If the director chooses tele/videoconferencing, he shall give notice of at least five days prior to the scheduled meeting to the Secretary. The latter shall be informed of his contact number/s. In the same way, the Secretary shall inform the director concerned of the contact number/s he will call to join the meeting. The Secretary shall keep the records of the details, and on the date of the scheduled meeting, confirm and note such details as part of the minutes of the meeting. In the absence of an arrangement, it is presumed that the director would physically attend the Board meeting.
At the start of the scheduled meeting, a roll call shall be made by the Secretary. Every director and participant shall state, for the record, his full name and location. Those attending through tele/videoconferencing shall confirm that he or she can completely and clearly hear the others who can likewise clearly hear him at the end of the line. He shall also state whether he has received the agenda and all the materials for the meeting, and specify the type of device used.
Thereafter, the Secretary shall confirm and note the contact numbers being used by the directors and participants not physically present. After the roll call, the Secretary may certify the existence of a quorum.
All participants shall identify themselves for the record, before speaking and must clearly hear and/or see each other in the course of the meeting. If a person fails to identify himself, the Secretary shall quickly state the identity of the last speaker. If the person speaking is not physically present and the Secretary is not certain of the identity of the speaker, the Secretary must inquire to elicit a confirmation or correction. If a motion is objected to and there is a need to vote and divide the Board, the Secretary should call the roll and note the vote of each director who should identify himself.
If a statement of a director/participant in the meeting via tele/videoconferencing is interrupted or garbled, the Secretary shall request for a repeat or reiteration, and if need be, the Secretary shall repeat what he heard the director/participant was saying for confirmation or correction.
The Secretary shall then require all the directors who attended the meeting, whether personally or through tele/videoconferencing, to sign the minutes of the meeting to dispel all doubts on matters taken up during the meeting.
Thus the SEC has modified its previous opinion requiring “actual presence” of directors or trustees during board meetings. The SEC takes its basis from and in accordance with Section 16 of the Electronic Commerce Act (R.A. 8792), which provides in part that “no contract shall be denied validity or enforceability on the sole ground that it is in the form of an electronic data message or electronic document or that any or all of the elements required under existing laws for the formation of contracts is expressed, demonstrated or proved by means of electronic documents.” The SEC is likewise of the opinion that the intended benefits of the above-referenced law may be made to apply to Section 25 of the Corporation Code, which conversely requires the presence of the directors in board meetings (SEC Opinion dated 09 August 2001).
Robinsons Land posts higher profits in Q3 of fiscal year
Thursday, August 08, 2006
ROBINSONS Land Corp. (RLC), the property development arm of the Gokongwei’s JG Summit Holdings Inc., said net profit went up by a fifth for the third quarter of fiscal year 2006.
In a regulatory filing, the company said net income for the three quarters of fiscal year 2006 rose 20 percent to P1.23 billion from last year’s P1.025 billion.
RLC attributed the increase in profits to the rising revenue, which grew 27 percent to P4.832 billion from P3.79 billion in the same period last year.
The company’s four core business units contributed to the revenue, of which, the largest contributor remains to be the commercial centers division, accounting to 49 percent of the total gross revenues.
Revenues from commercial centers amounted to P2.352 billion boosted by increase in rental income of Robinsons Place Manila, Robinsons Place Pioneer and Robinsons Place Angeles and the redeveloped Robinsons Place Novaliches.
Its high rise buildings division, on the other hand, posted a 79 percent growth in revenues to P1.454 billion from P813.9 million last year.
Rental income from the company’s office buildings also recorded a positive net income of P234.44 million compared to P164.15 million over the same period last year.
The company’s housing and land development division, reported revenues amounting to P368.81 million from P329.71 million due to higher project completion of ongoing projects.
RLC’s earnings before interest, taxes, depreciation and amortization rose 22 percent to P2.673 billion from last year’s P2.190 billion.
The company’s hotel division and real estate revenue amounted to P657.86 million and P1.697 billion, respectively.
As of June, the company’s total assets stood at P32.391 billion while stockholders’ equity was at P14.023 billion. Cash dividends paid during the period amounted to P735 million.
--Darwin G. Amojelar
http://www.manilatimes.net/national/2006/aug/08/yehey/business/20060808bus9.html
ICTSI profit expands 26% to P852M
By Zinnia B. Dela Peña
The Philippine Star 08/08/2006
Port operator International Container Terminal Services Inc. (ICTSI) said its net profit grew 26 percent in the first half of the year to P852 million from P677 million the previous year, mainly driven by strong operations overseas.
In the second quarter, ICTSI registered a net income of P477 million on revenues of P2.84 billion compared with P2.6 billion in revenues and P411 million profit in the same period a year earlier.
ICTSI said foreign operations accounted for 39 percent of the second quarter’s consolidated net income.
Enrique K. Razon, ICTSI chairman and chief executive officer, said the company delivered solid results for the quarter, although container handling volumes in Manila "continue to lag behind the levels we experienced in the first half of 2005."
"We are excited about the new terminal opportunities in Makassar, Indonesia and Tartous, Syria, and remain focused on executing the company’s proven international growth strategy," Razon added.
ICTSI handled consolidated volume of 458,370 twenty foot equivalent units (TEUs) during the second quarter, slightly lower compared to the 465,301 TEUs handled in the second quarter of 2005. For the six months ended June 2006, total TEUs handled were 917,773 compared to 908,674 TEUs in 2005.
Domestic operations accounted for 302,704 TEUs handled, or 66 percent of consolidated volumes, for the quarter in review. This is a six percent decline over the volumes handled in last year’s second quarter, as the weak volume trend of the first quarter this year continued to prevail over the Manila operations.
The decline, however, was offset by the seven percent growth of foreign operations to 155,666 TEUs, mainly from the company’s new operations in Madagascar.
Foreign container volume now accounts for 34 percent of total as compared with 31 percent in the second quarter last year.
Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) improved by four percent to P993 million in the second quarter of 2006, from P958 million in the first quarter of 2005.
For the six months ended June 2006, EBITDA totaled P1.91 billion or an increase of 12 percent from the year earlier figure.
In the second quarter, ICTSI invested P242 million to continue to expand the handling capacity and improve the operating efficiency of the company’s operations in Manila, Poland, Brazil and Madagascar. In May, ICTSI through subsidiary ICTSI Far East Ltd., acquired for $5.6 million 95 percent of PT Makassar Terminal Services (MTS), operator in Makassar Port Container Terminal in South Sulawesi, Indonesia.
To date, the company has invested a total of P946 million in capital expenditures and new acquisition.
ICTSI is widely acknowledged as a leading global developer, manager and operator of container terminals in the 50,000 to 1.5 million TEU/year range. ICTSI has an experience record that spans six continents and continues to pursue container terminal opportunities around the world.
COA: P7.1-B OWWA fund intact
By Marvin Sy
The Philippine Star 08/08/2006
The Commission on Audit (COA) has certified that P7.1 billion of the Overseas Workers Welfare Administration (OWWA) funds are still intact, most of it held in two government banks.
In the second hearing conducted by the Senate on the evacuation efforts of the government for the Filipinos in Lebanon yesterday, OWWA resident auditor Gemiliano Maloles testified that as of June 30, 2006, P3.2 billion of the OWWA funds are in the Land Bank of the Philippines (LBP), another P3.2 billion in the Development Bank of the Philippines (DBP) and P703 million in various banks.
The COA’s disclosure confirmed the earlier statement of OWWA administrator Marianito Roque during a press briefing at Malacañang that the funds are intact in the DBP and LBP.
The accounting of the OWWA funds was the primary issue of the Senate inquiry following reports that the money has been dissipated.
These allegations came about during the evacuation of Filipinos in Lebanon, which was criticized because of its slow pace and complaints from Ambassador Al Francis Bichara that no funds were being forwarded to the Philippine embassy in Lebanon.
What remained unclear was whether the funds could be used for the repatriation of all overseas Filipino workers (OFWs) in Lebanon.
Sen. Ralph Recto said there is a legal issue involved because the funds came from contributions by documented Filipino workers — those that went through official channels of overseas employment such as the OWWA and Philippine Overseas Employment Administration.
With a significant number of Filipinos working in Lebanon being undocumented, there is a question whether OWWA funds could be used for their benefit.
"The OWWA has funds so why are they being so parsimonious in helping OFWs (overseas Filipino workers) now?" Sen. Joker Arroyo asked.
Maloles said the funds can be taken out of the banks at any time but this would be considered a pre-termination of the accounts and as such, the OWWA would not be able to get the full amount it expects.
Former OWWA administrator and current Commission on Human Rights commissioner Wilhelm Soriano cited his experience in the past when Filipinos had to be repatriated from the Middle East and Singapore.
He said the "triggering" term is "Filipinos in distress," so once OWWA receives a call from the concerned authority to assist all those affected, the agency immediately advances funds to the areas concerned to facilitate evacuation of Filipinos to locations where they could be repatriated to the Philippines.
| Stop Senate probe |
Malacañang, on the other hand, is seeking to stop the "ill-timed" Senate inquiry and instead called for cooperation to evacuate all Filipinos from Lebanon.
None of the six executive branch officials attended the hearing to which they were summoned. Executive Secretary Eduardo Ermita said the Senate committee failed to give them the list of proposed legislation to justify the inquiry. Under the Supreme Court ruling on Executive Order 464, the President or executive secretary may invoke executive privilege based on the advance questions and opt to allow officials to speak to Congress in an executive session.
Ermita said officials invited to the Senate hearing, particularly from the OWWA, were not allowed to attend and instead were told to make bare their records through various media.
He said the status of funds and how they were being disbursed could be reported directly to the people.
"We hope they will suspend (the investigation) until after the evacuation of the OFWs is done. We don’t want this to be an obstacle in the ongoing evacuation operations," Ermita said.
The Senate inquiry may be well-meaning but ill-timed, he said.
Ermita said it would be best to show unity during this time of crisis, which some senators also acknowledged.
Presidential chief of staff Michael Defensor said there was no point for government officials to politicize the issue of evacuation and pin down one another when many OFWs’ lives should be saved.
Sen. Miriam Defensor Santiago, however, said since the power of Congress to hold inquiries in aid of legislation covers the formulation of future laws or a new legislative policy, under the Senate Rules of Procedure it is enough that the invited officials are given information on the subject of the hearing.
| Common ground |
Trying a new tack in its latest effort at reconciling with its critics, Malacañang invited the opposition yesterday to work with the administration on "common grounds," including the current evacuation crisis in Lebanon.
Defensor said the new approach is better than directly seeking immediate reconciliation with President Arroyo’s political opponents.
Among the common issues where both sides can work together are the ongoing crisis in Lebanon, the imminent eruption of Mt. Mayon in Albay, and the passage of urgent legislation in Congress, including the proposed P46-billion supplemental budget, he said.
"These are the common grounds where we can start helping each other with and I’m sure the opposition will welcome this, helping and supporting one another and hopefully from here, we can push the agenda of peace and reconciliation," Defensor said at the launch of the Kapihan ng Bayan forum in Quezon City.
He denied that the latest overture for reconciliation had something to do with the start of the committee deliberations on the impeachment complaints against Mrs. Arroyo.
He described the first step as a "confidence-building" measure wherein both sides agree on prioritizing the interests of the people.
"We can’t immediately talk about reconciliation but we’re sure there are policies of government that they (opposition) can support," Defensor said. "In the past, we’re doing something positive, the opposition remained silent or quiet but I hope now they can also be proactively supporting us in this effort."
Mrs. Arroyo in her State of the Nation Address last month said that her administration can easily confront its political opponents but she would rather that both sides work together for the country.
After it was established that the OWWA funds were intact, the Senate went on to ask how the funds were used in the past.
It has been reported that P530 million of OWWA funds were transferred to the government-owned Philippine Health Insurance Corporation (Philhealth) just before the national elections in May 2004.
This became the basis for the filing of a plunder case against Mrs. Arroyo and a number of other officials involved in the Philhealth program.
The Arroyo administration was accused of using the Philhealth program to campaign for the candidacy of Mrs. Arroyo.
Recto defended the use of the OWWA funds for this purpose since the OFWs were provided with a better healthcare program than what they previously had and at a discounted premium rate.
Connie Regalado of Migrante, an organization focused on the interests of migrant workers, said that the transfer of OWWA funds to Philhealth was illegal because it is a trust fund and transfer was done without proper consultation with the migrant workers.
| OWWA funds used for project |
Another issue that came up during the inquiry was the P500 million investment made by OWWA in the Smokey Mountain Development and Reclamation Project in 1995.
This use of the OWWA fund raised several questions because it was a project undertaken by the private sector.
Maloles disclosed that the OWWA disbursed P500 million for the project for investment in Smokey Mountain Project Participation Certificates (SMPPC).
OWWA said the transaction was aboveboard since the SMPPCs have been established as government securities by the Office of the Government Corporate Counsel.
According to OWWA, the certificates are insured and fully guaranteed by the Home Guaranty Corp. on its full par value of P500 million so in case of default or non-payment, HGC’s guarantee payment will be in the form of 3-year debenture bonds with an interest rate of 8.5 percent per annum tax-free.
Former OWWA administrator Soriano explained that the investment in the bonds was deemed "financially sound."
With the 8.5 percent interest rate carried by the SMPPCs, Maloles pointed out that OWWA’s P500-million initial investment ballooned to almost P1 billion.
Maloles said the principal amount was returned to the OWWA and only the accrued interest of close to P500 million remains unpaid by the HGC.
The Smokey Mountain project was a joint venture between the National Housing Authority as the landowner and the R-II Builders of businessman Reghis Romero as the developer.
It was one of the flagship projects of the government and carried three components — the provision of decent housing for Smokey Mountains residents; the clearing of the Smokey Mountain dumpsite and development of the 21.2 hectares land area into a residential and livelihood and commercial complex for the benefit of the area residents; and the reclamation of land from the adjoining Manila bay with an area of 79 hectares and its development into a residential, industrial and port-related business center.
Recto said that there is a gray area in the use of the OWWA funds for this project because it was for a "private purpose."
Senator Santiago urged the committee of Estrada to expand the scope of its inquiry to include the Smokey Mountain project, which she claimed was tainted with corruption.
She said she wants former President Fidel Ramos to be subpoenaed to testify on the issue because the project was initiated during his term.
Romero is also widely believed to have close connections with Ramos.
Estrada said he is open to expanding the scope of the inquiry to cover the Smokey Mountain project.
He also claimed that he has documents to prove that R-II Builders no longer has the capability to pay OWWA the P500 million in interest because it lost money on the project.
| Justify supplemental budget |
Senate President Manuel Villar said the Senate still has to scrutinize the P500-million supplemental budget recently passed by the House of Representatives to be used as standby fund for the repatriation of Filipinos stranded in Lebanon.
He added that the Palace should explain the need for this supplemental budget and ensure that the standby fund will be used for this purpose.
Sen. Franklin Drilon said the Senate will be briefed by Budget Secretary Rolando Andaya over the proposed supplemental budget.
"We will have a caucus on Wednesday at 1 p.m., where we have invited Secretary Andaya and the secretaries whose budgets will be increased by the supplemental budget to brief the senators," Drilon said.
"Subsequently, we will call a committee hearing the moment we receive the approved supplemental budget by the House. But pending receipt, we will have a briefing," he said.
The Senate has yet to receive the version approved by the House.
Drilon said the Senate would like to be assured by the national treasury that there is money available to support the supplemental budget and items included are part of "mandatory appropriations."
He said the Senate is likely to approve provisions on the internal revenue allotment, salary increase of firemen and jail guards, and teachers’ salaries.
| OFWs arrive by air, sea |
Another batch of 450 OFWs will arrive today on board an Orient Thai Airways flight chartered by the International Organization for Migration (IOM).
It will be the third flight chartered by IOM to help the Philippines evacuate its nationals from Lebanon since Israeli forces started bombing Beirut last month.
Before the war, OFWS — both documented and undocumented — working in Lebanon were pegged at 30,000. So far, the government has repatriated around 3,000 OFWs.
The Manila International Airport Authority has allotted two gates at the Ninoy Aquino International Airport Terminal 1 arrival area to accommodate the large number of repatriated OFWs.
In a related development, Vice President Noli de Castro ordered yesterday the activation within this week of sea routes to evacuate Filipinos still in Lebanon.
The Philippine Coast Guard said it will use a five-day operation plan to evacuate OFWs by sea but this plan needs the cooperation of the Israeli military, which could grant safe passage for evacuees.
Coast Guard spokesman Lt. Cmdr. Joseph Coyme said the search and rescue ferries BRP Pampanga and BRP Batangas will leave the country tomorrow and arrive at Beirut port on Aug. 25.
He said the "most logical route in terms of safety and efficiency" is to use the ferries to shuttle the OFWs from Beirut port to Tartus port in Syria.
Coyme said with four hours’ travel time between the two ports and each ferry accommodating up to 1,000 passengers in a one-way trip, they could evacuate 6,000 Filipinos to Syria per day.
He said that apart from Tartus port, they are also keeping other options open: Limassol in Cyprus, Mirsin in Turkey, and Port Said in Egypt. From these ports, OFWs can be safely transported to the nearest airport.
After the Coast Guard completes its mission in Lebanon, which is expected to take 50 days, the ships could be utilized to ferry hundreds of undocumented Filipinos in Saudi Arabia waiting for deportation back to Manila.
Meanwhile, officials of Cebu Pacific Airways clarified they were still mulling over the possibility of sending the airline’s new Airbus A319 on a mercy mission to help repatriate OFWs in Lebanon.
The new aircraft, which seats 150 passengers, is about to be delivered to Manila this weekend from Hamburg, Germany.
Cebu Pacific corporate communications manager Marjorie Valiente said the plan, unilaterally announced by Malacañang yesterday, has not yet been given the go-signal by their top management.
She said that if they can secure the necessary permits and clearances, "then we will go ahead with the plan."
Philippine Airlines vice president for corporate communications Rolando Estabillo said PAL has sent two of its aircraft on government-chartered flights to repatriate OFWs and the airline is ready to accommodate future government requests to help bring OFWs back to Manila. — With Aurea Calica, Paolo Romero, Christina Mendez, Rainier Ronda, Mayen Jaymalin, Edu Punay, and Rainier Allan Ronda
http://www.philstar.com/philstar/News200608080401.htm
PLDT earnings results (TABLE)
INQ7 MONEY - BREAKING NEWS
August 08, 2006
Updated 12:18:23 (Mla time)
Xinhua Financial News Service
Philippine Long Distance Telephone Co.'s second quarter to June results (annualized):
Service revenues - 30.66 billion pesos vs 30.27 billion
Non-service revenues - 674 million pesos vs 607 million
Other income - 206 million pesos vs 119 million
Expenses - 24.19 billion pesos vs 21.67 billion
Core net profit - 7.64 billion pesos vs 7.19 billion
Net profit - 6.73 billion pesos vs 7.30 billion
Earnings per share - 36.28 pesos vs 40.51
First half to June results:
Service revenues - 60.64 billion pesos vs 59.54 billion
Non-service revenues - 1.38 billion pesos vs 1.42 billion
Other income - 338 million pesos vs 173 million
Expenses - 43.74 billion pesos vs 39.10 billion
Core net profit - 15.21 billion pesos vs 13.69 billion
Net profit - 15.31 billion pesos vs 16.52 billion
Earnings per share - 83.02 pesos vs 92.44
Core profit strips out the impact of foreign exchange gains or losses and derivative transactions.
http://services.inq7.net/express/06/08/08/html_output/xmlhtml/20060808-14118-xml.html
PLDT earnings fall 7.8% in first half
INQ7 MONEY - BREAKING NEWS
August 08, 2006
Updated 12:09:55 (Mla time)
Erik de la Cruz
XFN-Asia
(2ND UPDATE) PHILIPPINE Long Distance Telephone Co. (PLDT), the country's largest telecommunications firm, said its second-quarter net profit fell 7.8 percent due to increased depreciation costs and foreign exchange losses, although core earnings rose.
Net profit for the three months to June came in at 6.73 billion pesos compared to 7.30 billion a year earlier. This brought first-half net income to 15.31 billion pesos from 16.52 billion in the same period last year.
"The decline is attributed to additional depreciation expenses, foreign exchange losses and a higher statutory tax rate -- which were partly mitigated by lower interest expense due to lower net debt balances," PLDT said in a statement.
Core profit, which strips out the impact of foreign exchange gains or losses and derivative transactions, rose to 7.64 billion pesos in the second quarter from 7.19 billion a year earlier.
Core profit in the first half of the year grew 11.1 percent year-on-year to 15.21 billion pesos
PLDT earlier said it added 1.57 million new mobile phone subscribers in the second quarter to bring its client base to 22.47 million at the end of June. Net subscriber additions in the first half of the year totaled 2.06 million.
PLDT provides mobile phone services through units Smart Communications Inc. and Pilipino Telephone Corp.
PLDT is controlled by Hong Kong-listed conglomerate First Pacific Co. Ltd., with NTT DoComo Inc. and NTT Communications of Japan holding a combined 14 percent stake.
At 11:48 am, PLDT shares lost 30 pesos or 1.43 percent at 2,075.
(One dollar = 51.40 pesos)
http://services.inq7.net/express/06/08/08/html_output/xmlhtml/20060808-14116-xml.html
Ayala Corp. shares rise after H1 profit doubles
INQ7 MONEY - BREAKING NEWS
August 08, 2006
Updated 09:57:51 (Mla time)
Xinhua Financial News Service
AYALA Corp. shares rose in early trade after the Philippines' largest conglomerate reported that its first-half net profit nearly doubled from a year ago as earnings from its subsidiaries rose and debt financing expenses were trimmed.
Ayala Corp. was up 5.00 pesos or 1.18 percent at 430.
The company reported after the market closed on Monday that its January to June net income jumped to 7.3 billion pesos from 3.7 billion a year earlier. Equity in net earnings from subsidiaries and affiliates grew six percent to 6.4 billion pesos.
The conglomerate also said it reduced interest expense by nine percent from a year ago as its debts declined to 38.5 billion pesos at end-June from 44.9 billion at end-2005. Debt mix also improved as the company shifted more of its US dollar-denominated debts into peso loans.
Ayala Corp has interests in property, banking, telecommunications, water utility and electronics.
(One dollar = 51.39 pesos)
http://services.inq7.net/express/06/08/08/html_output/xmlhtml/20060808-14081-xml.html
Ayala Corp. shows off muscle, profit up 96%
By Honey Madrilejos-Reyes
Reporter
HIGHER earnings from subsidiaries and affiliates, gains from share sales and lower financing expense fueled the 96-percent increase in the first-half net income of Ayala Corp. to P7.3 billion from P3.7 billion in the same period last year.
In a press statement, Ayala said equity in net earnings from subsidiaries and affiliates increased by 6 percent to P6.4 billion, but excluding one-time gains recorded in 2005, normalized growth would be 21 percent year-on-year.
Units Globe Telecom, Manila Water, and the Bank of the Philippine Islands (BPI) posted robust earnings growth during the period. Companies under AC Capital collectively contributed P1.6 billion in equity earnings, 8-percent lower year-on-year due to dilution gains in the first quarter of 2005. Excluding one-time gains, AC Capital’s contribution would be 63-percent higher compared to the previous year.
“The strong results during the period are reflective of the underlying positive signals in the broader economy, which has also been mirrored recently in renewed investor interest in the local equities market. We are encouraged by the relative stability of our economy and the continued strengthening of our government’s fiscal position,” said Ayala chairman and chief executive officer Jaime Augusto Zobel de Ayala.
The group’s property arm, Ayala Land Inc., posted consolidated profits of P1.9 billion, up 4-percent versus the first half of 2005. Excluding one-off transactions, net income would be up 38 percent year-on-year. Revenues grew across most business lines with revenues from residential development up 59 percent.
“Demand remained brisk across all residential products. Shopping-center revenues grew by 11 percent with increased gross leasable area and improved occupancy rates. The corporate business segment posted the highest revenue growth at 88 percent as a result of a sale of an office space. This was further enhanced by higher occupancy rates as well as the full contribution of its BPO buildings,” the group said.
BPI, meanwhile, earned a consolidated net income of P4.6 billion in the first semester, 7-percent higher than previous year’s P4.3 billion. Revenues grew at the same pace, fuelled by a 15-percent growth in noninterest income derived from foreign exchange and securities trading gains, rental income, asset management and trust fees.
Popular wireless unit, Globe Telecom, recorded a consolidated net income of P5.8 billion as consolidated net service revenues grew 6 percent year-on-year. Various value-based promotions encouraged greater usage and traffic, resulting in healthy net wireless subscriber growth. Globe’s wireless subscribers grew by 12 percent in the first half to 13.9 million from the 12.4 million at the end of 2005.
Meanwhile, companies under AC Capital contributed strongly to group earnings accounting for 25-percent of equity earnings as of the first half of the year. This was largely driven by Manila Water and Integrated Microelectronics Inc. (IMI).
Manila Water earlier reported a net income of P1.2 billion in the first half, 25-percent higher than the same period last year.
The strong performance was a result of higher water sales and customer base and the continued improvement in operating efficiency. The company further reduced nonrevenue water to 30.2 percent as of the end of the first half of the year, pushing billed volume to 933 million liters a day, 8-percent higher than year-end 2005 level and the highest ever recorded.
IMI also contributed strongly to AC Capital’s earnings with first half net earnings’ reaching P996 million, 69-percent higher than first half 2005 earnings of P590 million. IMI group revenues more than doubled to P10.1 billion as a result of the acquisition of Speedy-Tech, better performance of existing businesses, additional revenues from new businesses and higher contribution of its Cebu operations.
Listed at the Philippine Stock Exchange, Ayala Corp.’s stock price at the end of Monday’s trading was P425, 1.8-percent higher than Friday’s close.
http://www.businessmirror.com.ph/comp01.php
Shares seen firmer ahead of key corporate results
INQ7 MONEY - BREAKING NEWS
August 07, 2006
Updated 08:23:55 (Mla time)
Cecille Yap
Xinhua Financial News Service
SHARE prices are expected to open firmer as investors continue to snap up shares of major companies in anticipation of good quarterly results announcements this week. However, profit-taking could cut gains, dealers said.
On Friday, the composite index ended up 5.05 points or 0.21 percent at 2,362.60.
The broader all-shares index gained 1.74 points to 1,452.29.
Gainers beat losers 59 to 32, while 59 stocks were unchanged.
Volume reached 5.12 billion shares worth 1.34 billion pesos.
"The market may sustain its gains from last week for a couple more days, but soon we should be entering into a corrective consolidation mode," AB Capital Securities told clients in a note.
"With most of the major big cap issues already at overbought levels, the market's near term bias is negative."
Conglomerate Ayala Corp. and its property unit Ayala Land Inc. are scheduled to announce their second-quarter results Monday. Philippine Long Distance Telephone Co. is set to report its April-June performance Tuesday.
AB Capital said that despite lingering worries over US interest rates and the tension in the Middle East, the market's focus had shifted to corporate earnings that it said had so far been good.
"The market may turn sour if the remaining profits reports don't come out within expectations. It also begs the question whether the troubles abroad are powerful enough to offset strong earnings. We believe that the overall economy is strong, reducing the likelihood that the market will have a major meltdown," the brokerage said.
(One dollar = 51.52 pesos)
http://services.inq7.net/express/06/08/07/html_output/xmlhtml/20060807-13867-xml.html
JG Summit, Universal Robina to sell shares in Robinsons Land
INQ7 MONEY - BREAKING NEWS
August 07, 2006
Updated 10:03:41 (Mla time)
Cecille Yap
Xinhua Financial News Service
HALF of the shares that will be sold during Robinsons Land Corp.'s proposed international and local offering will come from the property firm's major shareholders.
Robinsons Land said that of its proposed offering of up to 932.806 million common shares, about 482.806 million shares or 51.75 percent would be from parent JG Summit Holdings Inc. as well as affiliates Universal Robina Corp and JG Summit Capital Services Corp.
At Friday's closing price of 11.25 pesos, the property firm and its shareholders may raise around 10.5 billion pesos from the share sale, although the company has yet to fix the timetable for the offer.
Robinsons Land told the stock exchange that JG Summit has agreed to offer up to 9.708 million shares, Universal Robina as much as 410.471 million or its entire stake in the property firm and JG Summit Capital a total of 62.627 million shares.
Universal Robina in July increased its shares in Robinsons Land by acquiring 293.62 million shares from Express Holdings Inc. Before that, it had 116.852 million shares of Robinsons Land as of end-June, according to market data provider Technistock.
Robinsons Land earlier said the offer price of its shares would be based on the stock's weighted average price for the 10 trading days immediately preceding the pricing date, subject to a discount of up to 10 percent.
Robinsons president Lance Gokongwei has said the share sale would increase the company's free float to 40 percent from the current seven percent and boost trading liquidity in its shares.
(One dollar = 51.52 pesos)
http://services.inq7.net/express/06/08/07/html_output/xmlhtml/20060807-13872-xml.html
Robinsons Land's profit up by 20%
ROBINSONS Land Corp. (RLC), the listed real-estate arm of the Gokongwei-controlled JG Summit Holdings Inc., reported over the weekend a 20-percent increase in net profit from October 2005 to June this year to P1.23 billion, from P1.02 billion in the same period last fiscal year.
Revenues for the nine-month period also by grew 27 percent to P4.83 billion. From April to June 2006 alone, the company’s revenues were pegged at P1.486 billion.
The company’s fiscal year ends in September.
In a statement, RLC executive vice president and group general manager Frederick D. Go said all four core business units of the company grew, with the commercial centers division as the largest revenue contributor. Its buildings division accounted for the highest increase in profitability.
The commercial centers division contributed almost half of the company’s gross revenues. Shopping centers, led by flagship stores Robinsons Galleria and Robinsons Place Manila, recorded gross revenues of P2.35 billion. Recently opened mall Robinsons Place Pioneer and the redeveloped Robinsons Place Novaliches contributed to the rental growth. RLC said it would continue to focus its efforts on improving tenant mix, enhancing mall facilities, and intensifying marketing efforts.
The high-rise buildings division registered a 79-percent increase in revenues from P813.9 million to P1.45 billion this year.
“RLC is a preferred landlord among major international and domestic contact centers and BPO companies owing to the prime locations and superior technical design of its office buildings,” Go said.
The company is now the country’s biggest landlord of contact and business process centers. Enjoying almost full occupancy in all its office properties, which includes Robinsons Cybergate Center, RLC’s rental income rose a substantial 43 percent year on year.
Revenues of the housing division reached P368.81 million, with a 12-percent jump over last year’s P329.71 million. Robinsons Homes’ projects in Davao, Robinsons Highlands and Bloomfields lead the sales for this year.
The hotel division registered gross revenues of P657.86 million from October 2005 to June 2006, an 86-percent jump over the previous year’s P354.64 million, driven mainly by the recently opened Crowne Plaza Galleria Manila.
As of June 30, 2006, RLC’s total assets stood at P32.391 billion, while stockholders equity was at P14.023 billion. ---Honey Madrilejos-Reyes
http://www.businessmirror.com.ph/comp03.php
SM Prime Q2 net profit P1.3B vs P1.2B
INQ7 MONEY - BREAKING NEWS
August 04, 2006
Updated 10:39:09 (Mla time)
Xinhua Financial News Service
(2ND UPDATE) Shopping mall operator SM Prime Holdings Inc reported that second-quarter net profit rose 9 percent from a year earlier to 1.3 billion pesos on the back of double-digit growth in rental revenues after the company opened new malls.
In the first half of the year, net profit grew to 2.6 billion pesos from 2.4 billion in the same period last year, the company said in a statement.
SM Prime vice-president Jeffrey Lim said the company is confident of meeting its target of growing full-year net profit by 7-8 percent to 5.3-5.4 billion pesos.
"We will meet that target. Usually, the second half is stronger than the first," Lim told XFN-Asia.
SM Prime said gross sales grew 19 percent in the first quarter to 3.2 billion pesos from 2.7 billion a year earlier as rental revenues improved to 2.7 billion pesos from 2.2 billion following the opening of six new malls, including the country's biggest -- Mall of Asia -- which began operating in May.
SM Prime said it is scheduled to open two more malls this year, which will increase its total gross floor area to 3.6 million square meters by year-end.
The company's performance during the April-June quarter was also boosted by sales of cinema tickets which rose 21 percent to 395 million pesos thanks to more blockbuster films.
For the first half of the year, operating income jumped 20 percent from 3 billion pesos a year ago as revenues grew 17 percent to 6.1 billion. SM Prime did not provide the first-half operating profit figure.
At 10:27 am, SM Prime was flat at 8.10 pesos.
(1 dollar = 51.66 pesos)
http://services.inq7.net/express/06/08/04/html_output/xmlhtml/20060804-13441-xml.html
Shares close higher on inflation data
INQ7 MONEY - BREAKING NEWS
August 04, 2006
Updated 14:55:18 (Mla time)
Cecille Yap
Xinhua Financial News Service
(UPDATE) SHARE prices closed higher for the second straight session, lifted by hopes that the central bank may decide to keep its benchmark interest rates steady in the medium-term after inflation fell to a two-year low last month, dealers said.
Buying of blue chip companies set to report second quarter earnings next week also continued, helping the main index into positive territory, although the extent of buying was less than in recent days as some counters are now seen close to being over valued, they said
The composite index ended up 5.05 points or 0.21 percent at 2,362.60, after trading between 2,356.60 and 2,372.20.
It ended 1.4 percent percent higher for the week.
The broader all-shares index gained 1.74 points to 1,452.29.
Gainers beat losers 59 to 32, while 59 stocks were unchanged.
Volume reached 5.12 billion shares worth 1.34 billion pesos.
The National Statistics Office reported before the market opened that year-on-year inflation eased to 6.4 percent last month from 6.7 percent in June, coming in at the lower end of the central bank's projected range of 6.3-7.0 percent.
It was the lowest annual inflation rate since June 2004 when it stood at 5.4 percent.
"The possibility of domestic interest rates rising has declined after recent data point to a decelerating trend in inflation. This should be good for the economy as a whole and for companies who have huge debts, or those who plan to borrow for expansion," Accord Capital Equities analyst Lawrence de Leon said.
Central bank governor Amando Tetangco said the tamer inflation data would allow the monetary authority to keep interest rates on hold. However, he said upside risks such as oil prices, remained, and would continue to be closely monitored.
The Philippine central bank has kept its overnight borrowing rate at 7.50 percent and overnight lending rate at 9.75 percent since October last year despite continuing monetary tightening in the US and elsewhere in the world. They were raised by a total of 75 basis points in 2005.
DBS in a note to clients said the central bank will likely keep its key rates steady for the rest of the year and may even cut the same in the first quarter amid easing inflation.
Trading this week has been volatile with the main index swinging to an 11-week high on Monday before succumbing to two days of profit-taking and then bouncing back in the last two sessions of the week.
Dealers said the market may post further gains early next week.
"We will likely see follow-through buying next week as the market pushes forward to the 2,400 resistance mark," de Leon said.
Top-traded Philippine Long Distance Telephone Co rose 30 pesos or 1.45 percent to 2,095 pesos on 86,540 shares ahead of its second-quarter earnings report on August 8.
Conglomerate Ayala Corp and unit Ayala Land Inc succumbed to profit-taking after rising ahead of their earnings reports next week.
SM Prime Holdings Inc gained 0.10 peso or 1.23 percent to 8.20 pesos after the mall operator reported a 9-percent rise in its second-quarter net profit on the back of a double-digit rise in rental revenues.
Manila Electric Co rose after President Gloria Macapagal-Arroyo said electricity rates within its franchise will drop by an average of 0.52 peso per kilowatthour after the distributor bought more of its requirements from the wholesale electricity spot market which opened in late June. Lower rates may lead to higher consumption, dealers said.
Meralco A, restricted to local investors, gained 0.25 peso to close at 15.75 pesos. Meralco B, which foreigners can buy, was up 0.25 peso at 25.
Globe Telecom Inc advanced 10 pesos to 1,020. An official of the company said recently that the firm's net profit in 2006 will likely exceed last year's earnings of 10.3 billion pesos given its strong first-half performance.
(1 dollar = 51.58 pesos)
http://services.inq7.net/express/06/08/04/html_output/xmlhtml/20060804-13484-xml.html
Hotel, convention center to rise at SM Mall of Asia
By Roderick T. dela Cruz
A new hotel and a convention center will soon rise at the sprawling SM Mall of Asia complex in Pasay City to cater to both international and domestic visitors.
Tourism Secretary Ace Durano said the construction of the two tourist facilities along Roxas Boulevard would help accommodate the influx of international tourists to the country.
The Mall of Asia complex, which sits on 19.5 hectares of reclaimed land in what is called “Bay City,” is envisioned to be the next tourist attraction in Metro Manila.
Durano said the SM Group had relayed its plans to construct a deluxe hotel and a convention center in Bay City that would make the Mall of Asia a complete tourist center.
He said the country needed more hotels and convention centers to achieve its target of attracting three-million tourists in 2006 and 5 million tourists by 2010. Some 2.6-million foreign guests visited the country in 2005.
The tourism chief said more than 2,000 staff and employees of Amway China, one of the world’s largest direct sales companies, were arriving this month for both business and leisure.
Durano said the Amway employees would come in four batches, each composed of 500 individuals, and would stay in Manila, Cebu and Boracay.
Other foreign companies, he said, had also indicated their plans to hold seminars in the country, but the problem was the lack of hotel rooms that meet the standard of foreign tourists.
The tourism chief said nine out of 10 foreign tourists in the country preferred to stay at deluxe hotels, but only 15 percent of all 16,000 hotel rooms in the country met their standards.
He said the construction of a hotel at the Bay City and another deluxe resort hotel in Cebu by a Korean company would help ease the problem.
Phil BXT, a Korean real estate developer, has committed to invest P3 billion for the construction of a 616-room resort hotel, a retirement village and a golf course in Mactan Island, Cebu.
http://www.manilastandardtoday.com/?page=business03_aug03_2006