Philippine Business News: June 2009

Monday, June 29, 2009

050907: Shares close firmer on Dow's gains; PLDT earnings disappoint

May 08, 2007
Updated 14:48:17 (Mla time)
Rocel Felix
Xinhua Financial News Service

(UPDATE) MANILA, Philippines -- Share prices closed slightly higher, helped by another record close for the Dow Jones industrials overnight, but Philippine Long Distance Telephone Co. (PLDT) retreated after reporting flat first quarter earnings, dealers said.

Higher expenses and tax payments offset better revenues at the country's largest telecommunications firm, causing its net profit to slip to P8.575 billion for the three months to March from P8.581 billion in the same period last year.

However, its core income, which strips out the impact of foreign exchange and derivative gains, was 11 percent higher at P8.4 billion, compared to core earnings of P7.6 billion a year earlier.

Dealers said some investors also exercised restraint ahead of the May 14 midterm congressional polls.

The 30-company composite index edged up 4.06 points or 0.12 percent to settle at 3,333.95, after moving between 3,329.89 and 3.357.88.

The broader all-share index rose 9.55 points to 2,121.04.

Gainers beat losers 60 to 44, while 57 stocks were unchanged.

A total of 2.6 billion shares worth P4.7 billion were traded.

Dealers said the composite index managed to breach the 3,325 resistance level as some investors took their cue from the Dow's bull run. The Dow Jones Industrial Average crossed 13,300 for the first time on Monday, securing its 20th record close since the start of the year.

"We have to confirm in the next few sessions if that level could hold. If it does, the next resistance would be 3,400," said Gomer Tan, an analyst at Regina Capital Development Corp.

Tan said while market sentiment was generally bullish, investors remained guarded ahead of next Monday's congressional elections.

"If the political exercise is peaceful though, the market will likely go up since a credit rating upgrade (for the Philippines) is expected after the polls," added Tan.

Most international credit rating firms have put their review of the country's credit ratings on hold, opting to wait for the results of the elections.

However, other dealers said expectations of strong first quarter corporate earnings are outweighing election jitters.

"Investors are responding more to positive earnings. Except for one senatorial candidate calling for a repeal of the expanded value-added tax law, there is no economic platform being sounded off as anti-market," said Jose Vistan Jr., head of research at AB Capital Securities.

Top-traded PLDT shed P15 or 0.58 percent to P2,550.00 after the release of its flat quarterly earnings, reflecting market's disappointment.

But PLDT chairman Manuel Pangilinan said the company expects its core profit for the full year to come in at P33 billion, the top end of its guidance.

He said PLDT, controlled by Hong Kong-listed First Pacific Co. Ltd. with a 29 percent stake, also remains committed to distributing 70 percent of its core profit this year to its shareholders, half of which will be declared in August.

Despite flat profits, "PLDT's revenue is still higher, and it is expected to continue growing as the company expands its related business and as it looks for new revenue stream," said Ron Rodrigo, an analyst with Unicapital Securities.

PLDT rival Globe Telecom Inc. gained P45 or 3.61 percent to P1,290.

Other advancers include SM Investments Corp., which rose P7.50 or 2.07 percent to P370 and unit, mall operator SM Prime Holdings Inc., which inched up P0.25 or 2.17 percent to P11.75.

Property developer Ayala Land Inc. climbed P0.25 or 1.39 percent to P18.25 while Megaworld Corp. fell P0.05 or 1.41 percent to P3.50.

Food and beverage conglomerate San Miguel Corp.'s A-shares were steady at P64.50, while its B-shares closed up P1.50 or 2.04 percent at P75. The company will announce its first quarter results later Tuesday.

http://services.inquirer.net/express/07/05/08/html_output/xmlhtml/20070508-64745-xml.html

050907: PLDT profit flat in first quarter,sees high-end of '07 core

May 08, 2007
Updated 11:06:45 (Mla time)

Reuters

MANILA, Philippines -- Philippine Long Distance Telephone Co. (PLDT), the country's largest listed company, said on Tuesday its first quarter profit was flat year on year, helped by sustained wireless phone growth and rising data services revenue.

PLDT, the country's most valuable listed company with a market value of $10 billion, said its core earnings, which strips out currency and derivative gains, was up 11 percent to 8.4 billion pesos ($177 million) in the quarter from the same period last year.

The company, partly owned by Hong Kong's First Pacific Co. Ltd. and Japan's NTT group, said it had net income of P8.58 billion in the first quarter, the same level as a year earlier.

Analysts forecast PLDT's net profit at P34.99 billion this year, nearly flat from P35.1 billion in 2006, according to Reuters Estimates.

PLDT said core earnings in the year would come in at the high end of a projected P32-33 billion.

The company, Asia's tenth largest mobile phone operator, is trying to diversify its broadband and data services to fuel growth as its historically profitable mobile phone business faces a maturing domestic market.

PLDT is expected to benefit from higher mobile phone usage in the second quarter in the run-up to the May congressional polls.

Shares of PLDT slid 0.39 percent to P2,555 after the company's results announcement while the main index climbed 0.45 percent.

http://services.inquirer.net/express/07/05/08/html_output/xmlhtml/20070508-64714-xml.html

050907: Cebu Holdings profit rises 52%

May 08, 2007
Updated 10:08:18 (Mla time)

Xinhua Financial News Service

MANILA, Philippines -- Cebu Holdings Inc., a property developer which is 47.2 percent owned by Ayala Land Inc., said its net profit in the first quarter rose 52 percent year-on-year to P112.4 million on the back of increased sales.

Revenue jumped 89 percent to P486.8 million for the three months to March, driven mainly by the improved performance of its Ayala shopping center in Cebu province in central Philippines, the company said in notes accompanying its results.

Ayala Land is expected to announce its first-quarter results on Wednesday.

http://services.inquirer.net/express/07/05/08/html_output/xmlhtml/20070508-64705-xml.html

050907: PLDT says 1Q net income little changed at P8.6B

By Lenie Lectura

Reporter

THE Philippine Long Distance Telephone Co. (PLDT), the nation’s largest company by market value, posted a net income of P8.6 billion in the first quarter of the year, little changed from a year earlier.

Tax payments and retirement of a portion of PLDT’s outstanding debts, helped trim the companies income.

Core net income grew 11 percent to P8.4 billion from previous year’s P7.6 billion.

Chairman Manuel V. Pangilinan said the PLDT group is on track to meet the top end of the company’s earlier profit forecast for the year.

“The PLDT group’s core income of P8.4 billion in the first quarter bodes well for the rest of 2007,” Pangilinan said during the presentation of the company’s first quarter results.

Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) reached P20.4 billion, up 3 percent from last year’s P19.9 billion. This translated into a consolidated EBITDA margin of 62 percent of service revenues.

Cash flows remained strong at P17.5 billion. From January to March, the PLDT group reduced its debt by $85 million. Net debt balance at the end of March stood at $1.1 billion.

PLDT treasurer Annabel Chua said the company may refinance debts maturing over the next few months.

The company’s consolidated service revenues rose 10 percent year-on-year to P33 billion as wireless service revenues grew 10 percent to P20.8 billion.

The increase is attributed to the combined impact of a 12-percent growth in cellular data, an eight-percent improvement in cellular voice revenues and the 245-percent increase in wireless broadband revenues.

As of end-March, the PLDT group’s total cellular subscriber base went up by 1.3 million to 25.5 million.

PLDT’s two wholly-owned mobile- phone subsidiaries—Smart Communications and Pilipino Telephone, added another 500,000 subscribers last month. This brought their combined subscriber base to over 26 million at the end of April.

“We see a continuing trend of the first quarter results as our wireless business continues to be ahead of expectations.

We expect an improvement in the second quarter,” Pangilinan said.

“Our bright spot is the data business, both corporate and retail, and this is why we are committed to rolling out the NGN, which will allow us to further spur growth of our data business and at the same time, facilitate more efficient networks and processes that will eventually enable us to improve the cost stricture of our business,” said PLDT president Napoleon Nazareno.

PLDT has rolled out 230,000 NGN lines to date.

The group’s broadband subscribers reached 327,000 and total revenue contribution from broadband and Internet services have surged 46 percent to P1.6 billion in the first three months.

On the other hand, PLDT’s fixed line business remain under pressure as its local exchange and international long distance businesses continue to suffer from the foreign exchange rate.

Fixed line service revenues declined by three percent to P11.8 billion. Had the peso not appreciated by five percent in the first three months of the year, revenues would have declined only by one percent.

“Our traditional fixed services remain challenging but we are extremely positive about our wireline and wireless broadband businesses which continue to demonstrate robust subscriber take up. Both will continue to grow in importance to our overall business in terms of profit contribution and growth,” Pangilinan said.

Meanwhile, the company plans to acquire other phone firms and a business process outsourcing (BPO) company to expand growth in the outsourcing and telecommunications businesses.

Pangilinan said that the PLDT group is earmarking $100 million to acquire a BPO firm and ‘several hundred millions of pesos’ to acquire one or two small phone companies that are members of the Philippine Association of Private Telephone Companies.

He did not name the companies that PLDT is planning to buy.

“We are not too keen on start-up investments because it will take years to realize profits. There should be a short-time horizon for profit… It must provide value to our business whether directly or indirectly. That is why we are quite careful in looking at the cost of the investment and the returns as well,” Pangilinan said.

The budget for the planned acquisitions is separate from the programmed capital expenditures set between P20 to P22 billion allotted this year.

“During the course of the year, we will continue to look at investment areas that can provide ways to expand growth. In the event such opportunities do not arise or when they do, prove unattractive, we will consider the option of returning additional cash to our shareholders in the most efficient manner possible,” Pangilinan said.

PLDT is also eyeing to increase regular dividend payouts to 70 percent of core earnings.

“We remain committed to our previous guidance of an increased dividend payout of 70 percent, half of which we anticipate to declare when we announce our first half results in August,” Pangilinan said.

http://www.businessmirror.com.ph/05092007/companies04.html

050807: SM Prime Q1 profit P1.5B

May 08, 2007
Updated 14:27:48 (Mla time)

Xinhua Financial News Service

MANILA, Philippines -- Shopping mall operator SM Prime Holdings Inc.'s net profit in the first quarter was 11 percent higher than a year before at P1.5 billion, boosted by higher rental revenue, the company said.

SM Prime said its first-quarter gross revenue had grown by 24 percent to P3.6 billion with the opening last year of five new malls.

Rents for space in its malls accounted for 83 percent of revenue in the first quarter. These rents increased 26 percent to 3.0 billion pesos because the newly opened malls have an occupancy rate of 97 percent.

The company's operating expenses were 1.6 billion pesos and its operating income grew by 17 percent to P2 billion.

SM Prime president Hans Sy said in a written statement: "SM Prime will continue to reap the benefits of its continued expansion this year."

New malls that the company expects to open this year include SM City Taytay and SM Supercenter in Muntinlupa, while SM Mall of Asia and SM City in Pampanga will be expanded.

SM Prime is a subsidiary of holding company SM Investments Corp.

http://services.inquirer.net/express/07/05/08/html_output/xmlhtml/20070508-64769-xml.html

050807: San Miguel profit doubled on Coke sale in Q1

May 08, 2007
Updated 15:44:07 (Mla time)

Reuters

MANILA, Philippines -- San Miguel Corp., Southeast Asia's largest food and beverage group, said on Tuesday first-quarter net income doubled after it sold its stake in a soft drinks and bottler unit to Coca-Cola.

The Philippines' second-largest listed group had said on Monday it wanted to venture into mining, power, infrastructure and the utility sector in the Philippines to boost growth in its saturated and volatile home market.

San Miguel reported net income of P4.33 billion ($92 million) in the first quarter.

Analysts expect the company to post full-year net income of P11.19 billion this year, up 5.6 percent from P10.6 billion in 2006, according to Reuters Estimates.

Shares of San Miguel, partly owned by conglomerate SM Investments Corp. and Japan's Kirin Brewery Co. Ltd., closed up 2.04 percent while the main index inched up 0.12 percent.

http://services.inquirer.net/express/07/05/08/html_output/xmlhtml/20070508-64775-xml.html

050907: Holcim bullish, sees 13% hike in cement demand on govt drive

By Dennis D. Estopace

Reporter

NORZAGARAY, Bulacan—Cement manufacturer Holcim Philippines Inc. is rolling out a new product—Holcim Wallright, a cement mortar, as it steadily becomes bullish over the future of construction, which it expects to rise in the next several months after a steady decline in demand for cement since seven years ago.

“We expect a 13-percent increase in demand for cement as soon as government restarts its infrastructure program after the elections,” said senior vice president Francis C. Felizardo on Tuesday.

Felizardo, who heads sales, marketing and distribution, said the shrinkage in the market was 2 percent from the 1997 Asian financial crisis that bogged down government and private construction projects.

Now, they have seen a slight pick-up in demand from December last year and that as government goes into its planned spending spree on infrastructure, the demand would steadily go up. “That would be the second wind for the industry.”

Vice president for operations Ferdinand A. Pecson said that while they are optimistic about the market, Holcim management is still not keen on opening up its Line 1 for production. The company has two lines in its 20-hectare manufacturing base here operated by some 250 employees.

Line 2, Pecson said, runs at 67 percent of capacity producing between 18 million and 19 million tons of cement. The company’s other plants are in La Union, Davao and Misamis Oriental.

To ride the past years’ slump in demand, Felizardo said Holcim focused on producing new products mainly for the export market: Wallright, for plastering, and Excel, a better version of the company’s current Portland and Pozzolan types.

Felizardo added that since the company rolled out Excel in 2001, the brand contributed to its growing exports business. Last year, Holcim exported 873 kilotons of Portland and Excel while it sold locally 3,412 kilotons.

Competitor La Farge Cement Philippines Inc., according to Felizardo’s data, still dominated the domestic market at 3,691 kilotons sold but its exports were just 143 kilotons.

The exports market is still dominated, however, by Cemex Philippines Inc., posting foreign sales of 1,190 kilotons last year. It sold 2,399 kilotons in the domestic market.

Felizardo said Excel is also priced the same as its Portland type at between P173 to P175 for a 50-kilo bag retail, and P170 for wholesale at a minimum of 600 bags.

The cement companies had been reportedly asked by the Trade department to submit their pricing in view of allegations there is overpricing in cement.

http://www.businessmirror.com.ph/05092007/headlines04.html

050907: SMC's 1Q net income up 100%

Revenue boost comes largely from sale of STAKE IN coca-Cola Bottlers

By Honey Madrilejos-Reyes

Reporter

SOUTHEAST Asia’s largest food and beverage company San Miguel Corp. (SMC) booked a net profit of P4.33 billion for the first quarter of 2007, up 100 percent from P2.17 billion in the same period last year.

The higher net profit was boosted by a nonrecurring income the company booked from the sale of its stake in Coca- Cola Bottlers Phils. Inc. (CCBPI).

Excluding the revenue contribution from CCBPI, sales revenue of SMC reached P55.4 billion, up 7 percent in the same comparable period.

Consolidated operating income of P3.8 billion was 24-percent lower, trimmed by external factors continued to affect the performance of unit Ginebra San Miguel Inc., particularly the eight-percent increase in excise taxes implemented last January.

SMC’s packaging company also suffered from the cyclical downtrend for glass bottle requirements while National Foods Ltd., SMC’s dairy and juice subsidiary in Australia, absorbed cost increases as a consequence of the continent’s prolonged drought.

Meanwhile, domestic beer operations’ posted an operating income of P2.70 billion, up 13 percent in the same comparable period as domestic beer sales benefited from lower raw material and fuel prices. Revenue finished at P10.5 billion.

International beer operations, on the other hand, recorded higher volumes from January to March with corresponding sales revenue of $68.3 million.

SMC’s liquor unit Ginebra San Miguel Inc. reported a 7-percent rise in volumes from 2006 and revenue of P2.98 billion. Sales of major brands picked up during the quarter, with GSM Blue, Vino Kulafu and Gran Matador generating double-digit growths.

San Miguel Food Group posted consolidated sales revenue of P14.7 billion in the first period, practically at par with 2006. Improved efficiencies, lower raw material prices and fixed cost management helped carry operating income higher by seven percent at P540 million.

National Foods Ltd. of Australia generated revenue of AU$496 million, 12 -percent higher than last year’s with volume improvement achieved in all categories.

http://www.businessmirror.com.ph/05092007/companies01.html

050907: SMPH says net profit up at P1.5B

By Honey Madrilejos-Reyes

Reporter

MALL developer and operator SM Prime Holdings Inc. (SMPH) reported on Tuesday an 11-percent increase in net profit from January to March this year to P1.5 billion on the back of higher mall rentals boosted by its newly opened stores.

Gross revenues, on the other hand, rose 24 percent to P3.6 billion while rental income from the malls, which accounted for 83 percent of total revenues, grew 26 percent to P3.0 billion.

The company opened five malls last year led by the region’s third-largest shopping site The Mall of Asia, along with SM City Sta. Rosa, SM City Clark, SM Supercenter Pasig and SM City Lipa. SM North Edsa was also expanded with The Block.

“Expect more to come from us as we carry out our goal of bringing more SM malls to provincial communities and expand some of our existing malls that have naturally grown and evolved with its markets,” said company president Hans Sy in a statement.

Last month, the Sy-controlled SMPH said it was spending P35 billion in the next five years to fund the construction of 35 new malls throughout the country and expansion of existing ones.

This year alone, SMPH is spending P7 billion for the building of three new malls and expansion of four malls located in Cebu, Pampanga, Fairview and SM Mall of Asia.

“The five-year capex does not include yet the land acquisitions,” Sy emphasized.

Jeffrey Lim, SMPH’s executive vice president, said the P35-billion capex would be equally financed by borrowings and internally generated cash.

This year, SMPH would continue its expansion programs geared toward areas outside of Metro Manila.

“We are building three new malls in Bacolod, Taytay and Muntinlupa. We are also expanding four of our existing malls, including the SM Mall of Asia,” Sy said.

Considered as the second-largest mall in the region, SM Mall of Asia is being expanded to accommodate a Science Museum and Planetarium. The new additions, according to Sy, would seat on a 3,000 square meter lot and is up for completion by the end of the year. SMPH has set aside P250 million for the new features.

Next year, the company is preparing another P7 billion to fund new malls to be constructed in Tarlac; Naga City , Bicol; Calamba, Laguna; Baliwag, Bulacan; and Marikina City .

SMPH remains the major income contributor of SM Investments Corp., the holding company controlled by the country’s wealthiest man Henry Sy.

http://www.businessmirror.com.ph/05092007/companies02.html

050907: SMC to list separately beer division, packaging unit

By Honey Madrilejos-Reyes

Reporter

THE board of San Miguel Corp. (SMC) approved on Tuesday plans to list separately the company’s domestic beer operations and packaging business at the stock exchange.

For the beer operations, part of the plan is to spin-off of San Miguel Beer Domestic and the forming of a strategic partnership with Japan’s Kirin Brewery Co. Ltd. San Miguel Beer Domestic would then become a wholly-owned subsidiary of SMC while Kirin, a strategic investor of SMC since 2002, would own a 20-percent stake in the beer company.

“We are looking to unlock the potential and underlying value of the entire San Miguel Group. This is something we have been looking at for some time now and with this spin-off, we reach another milestone in our long-range plan to transform San Miguel into a more disciplined, high-performing company,” said president and chief operating officer Ramon S. Ang in a statement.

As for the packaging business, SMC said it has signed on April 27 an agreement with long-time joint venture partner Nihon Yamamura Glass for a 35-percent equity infusion in the business.

“An IPO would generate for each business much needed equity and allow it to grow faster and partner more effectively with other world class players like Kirin and Nihon Yamamura Glass,” Ang added.

The board also approved an increase in the company’s authorized capital from 4.5 billion to 7.5 billion shares, equivalent to P37.5 billion at par value to fund the group’s planned acquisitions and expansion into other businesses as well as pay down debts and finance possible share buy-back.

The move would allow SMC to issue 1.5 billion preferred shares as part of the capital raising exercise. Two years ago, SMC sought a waiver for the shareholders’ preemptive rights on the “issuance of any class of preferred shares related to equity-linked or other securities, for property needed for corporate purposes.”

On Monday, the BusinessMirror reported that SMC was planning to make investments in new businesses, including power generation/transmission, mining, water and infrastructure.

The company said, though, it would still need to do further studies and feasibility analysis to pinpoint the key opportunities in the proposed new businesses.

“The board decided it was timely to actively consider developing new engines of growth to further increase the gains realized from nurturing its current core businesses,” SMC said.

The group’s product portfolio includes beer, hard liquor, carbonated and noncarbonated nonalcoholic beverages, processes and packaged food products, meat, poultry, dairy products and various packaging products.

http://www.businessmirror.com.ph/05092007/companies03.html

Sunday, June 28, 2009

050807: Shares close firmer on Dow's gains; PLDT earnings disappoint