Rising wages said eroding Asia’s competitiveness

May 7, 2019 | 12:30 am

RISING minimum wages across Northeast and Southeast Asia will “gradually” erode the competitiveness of economies in these regions, Fitch Solutions Group Ltd said in a May 3 note e-mailed to journalists on Monday.

Noting that “availability of large pools of low-cost labor has positioned East and Southeast Asia as the premier hub for labor-intensive business operations, particularly in manufacturing” — supporting rapid economic growth in countries like China, Malaysia and Thailand over the past five decades — the note said “the rapid region-wide increase in the minimum wage will undermine this global competitiveness.”

Fitch Solutions — affiliate of Fitch Ratings, Inc. — noted that these regions’ average minimum wage was just around 63% of the global average in 2015, “but it has risen to nearly 82% in 2019 and is projected to catch up with the global average or… overtake it by the end of the next 10-year period.”

Hence, “[f]rom a labor cost perspective, several East and South East Asian countries will lose their global competitiveness over the next decade due to the rapid rise in minimum wages across the region as businesses face increasingly higher costs of production.”

It added that “authorities in some countries, including Cambodia, Vietnam and the Philippines, are succumbing to worker and union demands in order to prevent possible outbreaks of social unrest that could cause political instability.” The Trade Union Congress of the Philippines — the country’s biggest trade group — on April 29 filed a fresh petition for an across-the-board wage increase for Metro Manila’s private sector workers amounting to P710, arguing that the P537 upper end of the capital’s P500-537 daily minimum wage, which resulted from a P25 increase that took effect on Nov. 22 last year, translates to a nominal take-home pay of P416.53 after government-mandated deductions and a real value of P354.80 when adjusted to inflation.

For American Chamber of Commerce of the Philippines, Inc. Senior Adviser John D. Forbes, Philippine labor costs have not risen “as fast as in some neighboring countries.”

“Minimum wages have gone up in line with inflation but peso depreciation has improved competitiveness of exported goods and services,” he said in a mobile phone message on Monday when asked for comment.

For European Chamber of Commerce of the Philippines President Nabil Francis, “[t]he Philippines remains an attractive investment destination” due to “its young, dynamic, English-literate work force.”

“In order to develop a more productive workforce that is regionally competitive, the country should prioritize the continued improvement of the quality of its working population,” he said in an e-mail. — Gillian M. Cortez

SM Prime Q1 profit grows 16%

May 7, 2019 | 12:10 am

More than half of SM Prime Holdings, Inc.’s revenues came from its shopping mall business. — *CATHY ROSE A. GARCIA*

SM PRIME Holdings, Inc. delivered a 16% profit increase in the January to March period, as its shopping mall, residential development, and commercial properties continued to see strong growth.

The Sy-led property developer said in a statement Monday that consolidated net income stood at P8.8 billion in the first quarter of 2019, higher than the P7.6 billion it posted in the same period a year ago.

Consolidated revenues also rose by 14% to P26.5 billion, driven by higher rental income and residential sales.

“SM Prime continues to benefit from the overall growth of the Philippine economy that boosts the household income of most families. We are optimistic that we will sustain this performance this year as we continuously expand our core businesses in developing provincial cities across the country,” SM Prime President Jeffrey C. Lim said in a statement.

The mall segment accounted for 56% of SM Prime’s consolidated revenues for the period at P15 billion, eight percent higher year on year. This was supported by an eight percent increase in mall rental revenues to P12.9 billion, thanks to the opening of new malls from 2017 to 2018. Same-mall sales growth was also steady at seven percent.

The spate of international and local blockbuster movies during the period boosted cinema and event ticket sales by five percent to P1.2 billion, while other mall revenue streams such as bowling and ice-skating also grew by eight percent to P881 million.

The residential business, primarily through SM Development Corp. (SMDC), contributed 35% of consolidated revenues at P9.2 billion, 23% higher from the same period a year ago. SMDC attributed the increase to the higher construction accomplishments of projects launched from 2015 to 2017, as well as revenue recognition for recently launched projects.

SMDC’s residential projects include Cheer Residences, Green 2 Residences, Hope Residences, Charm Residences, and Bloom Residences, among others. Reservation sales were up by 20% to P17.8 billion or equivalent to 4,585 units.

“The continued increase in sales take-up is due to strong demand fueled by international buyers, overseas Filipinos’ remittances, and rising disposable income of the emerging middle class,” the company said.

SMDC plans to unveil up to 20,000 residential units within the year, from a range of high-rise and mid-rise buildings as well as single-detached house and lot projects for the rest of the year.

The remaining nine percent of SM Prime’s revenues came from its other businesses consisting of offices, hotels, and convention centers. This segment grew its topline by 14% to P2.3 billion, from the operation of 11 office buildings covering 642,000 square meters in gross floor area, in addition to six hotels, four convention centers, and three trade halls.

SM Prime has further expanded its hospitality portfolio with the opening of Park Inn by Radisson-Iloilo on April 2. It is also scheduled to open Park Inn by Radisson-North Edsa in the second half of the year. — Arra B. Francia

Data drives Globe profit higher in 1st qtr

May 7, 2019 | 12:09 am

By Denise A. Valdez, Reporter

EARNINGS of Globe Telecom, Inc. rose 44% in the first quarter, on strong revenues from sustained increase in data usage by mobile and home broadband subscribers.

The Ayala-led telco said in a regulatory filing Monday its attributable net income stood at P6.7 billion in the January to March period, up from P4.7 billion in the same period last year. Core net income, which excludes forex, mark-to-market gains/losses and non-recurring items, also grew 40% to P6.7 billion.

Total revenues increased 10% to P40.6 billion, driven by the 44% jump in mobile data revenues to P16.5 billion. This segment now accounts for 61% of the company’s gross service revenues, rising from 47% last year.

Globe’s home broadband service contributed P5.2 billion to the company’s total revenues, or 21% higher from the same period last year, while corporate data added P3.1 billion or an increase of 16% from last year.

“We continue to see that data continues to be the main driver of growth. Mobile business grew 11% year on year, bolstered by the 44% increase in mobile data revenues,” Globe Chief Commercial Officer Alberto M. de Larrazabal said in a media briefing at the company’s headquarters in Bonifacio Global City.

The growth in the company’s data-related services was able to outpace the revenue decline in other services. Revenues from mobile SMS slid 22% to P4.2 billion, while mobile voice revenues slumped by 15% to P6.3 billion. Total revenues from Globe’s mobile services still ended 11% higher at P27 billion.

“With the pervasive reach of data and Internet of things, we see its effects not just on the rapid acceleration of mobile data revenues, but also in lower mobile voice and SMS services, both posting double digit declines,” Mr. De Larrazabal said.

Fixed line voice revenues also fell 8% to P710 million.

Mobile subscribers of Globe reached 83.5 million by the end of March, while home broadband subscribers hit 1.7 million during the same period.

The company’s total costs and expenses were flat at P30.7 billion. Capital expenditure for the period was at around P8.8 billion, 68% of which were spent for data-related services.

Considering Globe’s positive financial performance in the first quarter, Mr. De Larrazabal said future revenue increase may be muted.

“We always aim to execute to the extent that we can. We are always looking for ways to improve the margins of what we do… [A] more tempered outlook is probably the more appropriate way to go at this point,” he said.

Globe is allotting P63 billion for its capital expenditures this year to support the growth of its data business. It is scheduled to launch next month its fifth generation (5G) network for the home, which Mr. De Larrazabal said may target corporate and household customers.

HyalRoute Group to invest $1-2 billion in PHL venture

May 7, 2019 | 12:08 am

By Denise A. Valdez, Reporter

THE Department of Information and Communications Technology (DICT) signed a deal with the local subsidiary of Singapore-based HyalRoute Group last week to roll out a fiber optic cable network in the country.

In a statement on Monday, the DICT said it inked on May 2 the memorandum of agreement (MoA) with Philippine Fiber Optic Cable Network Ltd., Inc. (PFOCN), a subsidiary of HyalRoute. HyalRoute is described as a leading provider of shared communication fiber network in emerging Asia.

The DICT said PFOCN’s investment in the fiber optic cable network is valued at between $1 billion to $2 billion, which will be staggered between 2019 to 2028.

Under the agreement, PFOCN will install fiber optic network cables that may be utilized for DICT’s Free WiFi project and National Broadband Program. For its part, the government will assist the company in securing permits and licenses for its rollout.

“PFOCN will invest in rolling out fiber optics cable nationwide, which they will then lease or rent out to telcos, ISPs (internet service providers), cable TV operators, from backbone, middle mile and last mile (fiber to the home). Preferential rates will be available to the government for its Free WiFi and National Broadband Program,” DICT Acting Secretary Eliseo M. Rio, Jr. said in a text message.

He noted having PFOCN in the country will address the need to extend the fiber optic network to rural areas. which local telcos are unable to do at the moment because of its “non-viability.”

“If telcos and other players will just rent for the use of Fiber Optic cable laid down by a common provider, it becomes viable to telcos and other players to just rent and the provider can recover its ROI (return on investment) from these rentals. It will also greatly help in the government’s rollout of its Free WiFi Project and the National Broadband Program,” Mr. Rio added.

The rollout of PFOCN in the country will be spread across phases starting this year through 2028.

HyalRoute Chairman Huang Xinglong was quoted in the DICT statement as saying: “We believe this investment project will greatly improve the status of communication infrastructure, particularly fiber network, while improving broadband penetration rate and speed to meet the needs of the general public.”

Metro Manila office supply rises; Taguig still has highest rent rates

May 7, 2019 | 12:07 am

By Vincent Mariel P. Galang
Reporter

METRO MANILA’S supply of Prime and Grade A office space grew by about 170,000 square meters (sq.m.) in the first quarter of the year, with more than half located in Makati City, commercial real estate services company Cushman & Wakefield Philippines said.

In its first quarter 2019 Office Marketbeat report, Cushman & Wakefield said 168,156 sq.m. of Prime and Grade A office space was finished in the January to March period, bringing total supply to 7.162 million sq.m.

Of this new supply, 52% came from Makati City, 27% from Muntinlupa City, and 21% from Quezon City.

One of the newly completed buildings is NEX Tower, located along Ayala Avenue in Makati City. The tower, which was developed by Nova Group has 28 floors, with a typical floor area of 1,400 sq.m.

In terms of the 7.162 million sq.m. total supply, Taguig City accounted for most of the inventory at 2.097 million sq.m. This was followed by Makati City with 1.416 million sq.m.; Pasig City with 1.111 million sq.m.; and Quezon City with 1.074 million sq.m.

Muntinlupa City has an inventory of 568,688 sq.m., while Pasay City has 545,964 sq.m.; Mandaluyong City with 272,701 sq.m.; and Parañaque City with 74,417 sq.m.

The average asking rent for Prime and Grade A spaces in Metro Manila jumped by 8.6% to P946 per square meter per month (/sq.m./mo.) during the first quarter of 2019 from P871/sq.m./mo. during the same period in 2018. Quarter-on-quarter, rental rates grew by 5.2% from P899 per sq.m. in the fourth quarter of 2018.

“The increase can primarily be linked to the annual escalation of rents that is usually applied at this time of the year,” it noted in the report.

Office spaces in Taguig City command the highest rent rates with an average of P1,201/sq.m./mo. Rent rates in Makati City stood at P1,195/sq.m./mo., followed by Parañaque City at P1,050/sq.m./mo.; Pasay City at P941/sq.m./mo.; Quezon City at P854/sq.m./mo.; and Muntinlupa City at P804/sq.m./mo.

Mandaluyong and Pasig had the lowest rent rates at P786/sq.m./mo. and P734/sq.m./mo., respectively.

“Typical annual rent escalation is 5%, and this is usually applied at the first quarter of the year for vacant spaces. Among the Metro Manila markets, Parañaque City has the biggest quarterly increase of 25.4% because of high asking rents from the limited vacancy in its existing buildings,” a company representative told BusinessWorld in an email.

In terms of vacancy, Quezon City had the highest rate at 9.9%, followed by Mandaluyong City at 7.1%; Taguig City at 5.5%; and Makati City at 1.9%. Other cities recorded vacancy rates below 1%, bringing overall vacancy rate in Metro Manila to 4%.

Ayala Land mulls peso-denominated ‘green’ bonds

May 7, 2019 | 12:07 am

By Arra B. Francia, Senior Reporter

AYALA LAND, Inc. (ALI) is looking at the issuance of peso-denominated “green” bonds in the future, following the recent release of guidelines for such a product by the Securities and Exchange Commission (SEC).

“We’ve been in discussions with various institutions for a green bond for Ayala Land. Our consideration is if it should be in the local currency,” ALI Chief Finance Officer Augusto Cesar D. Bengzon told reporters after the listing ceremony for its P8-billion fixed rate bonds in Makati on Monday.

Green bonds are those whose proceeds will be used exclusively for existing eligible green projects, including renewable energy, energy efficiency, pollution prevention and control, environmentally sustainable management of living natural resources and land use, clean transportation, climate change adaptation, and green buildings.

The SEC released the guidelines for the issuance of green bonds in September last year. Only Yuchengo-led lender Rizal Commercial Banking Corp. has issued green bonds, raising P15 billion last February to support environmental and climate projects.

Mr. Bengzon said the company has been entertaining proposals from potential underwriters for more than five years now, although noting that not a lot of institutions are willing to underwrite a local currency green bond.

“If we receive good terms for a green bond, we certainly would consider issuing one of those instruments… We just have to come to terms with a green bond that is responsive to the needs of Ayala Land and at the same time one that qualifies as a true green bond,” the ALI executive said.

Mr. Bengson noted clarifications will be needed on the accreditation requirements for a bond to be considered green. While sorting out these requirements, he said ALI is already embarking on a company-wide sustainability initiative that will prepare it for such an issuance.

ALI has committed to neutralize its carbon footprint by 2022. To offset the projected 490,000 tons of carbon emissions from its commercial properties, the company is dedicating 450 hectares of its landbank to carbon forests, implementing passive cooling design in its developments, and shifting to renewable energy.

The property developer is also preparing its first real estate investment trust, where it plans to raise about $500 million through the registration of its prime office assets in Makati within the year.

In the meantime, Mr. Bengzon said ALI has now fully covered its funding requirements for the year after the issuance of P8-billion seven-year bonds from its P50-billion shelf on Monday. The bonds were listed at the Philippine Dealing and Exchange Corp.

“Before we did the bond, we closed up two bilateral loans and if I’m not mistaken, the team has another two bilateral loans that they will execute in the next two months. Our funding requirements for the year will be close to P40 billion — P20 billion for refinancing, P20 billion to fund our projects,” Mr. Bengzon explained.

Avengers: Endgame fastest film to hit $2 billion in the box office

May 7, 2019 | 12:07 am

LOS ANGELES — Disney’s Avengers: Endgame became the fastest film to gross $2 billion globally in just 11 days, crushing Avatar’s record of 47 days internationally. The Marvel juggernaut now stands as the second-biggest movie of all time with $2.188 billion worldwide.

It has now generated $619 million at the North American box office and $1.56 billion internationally as it continues its unprecedented box-office run, assembling another $145 million at the US box office during its second weekend in theaters.

The popularity of the film became evident from its first days in theaters. After just one week, Endgame had become the fifth-highest-grossing movie of all-time, behind such hits as Avatar and Titanic. Some analysts predict it will ultimately claim the No. 1 spot.

In North America, Avengers: Endgame dipped 59% from its opening weekend. That wasn’t enough to secure the biggest second weekend of all time, a record still held by Star Wars: The Force Awakens with $149 million. However, it passed Avengers: Infinity War ($114 million) to hold the second-biggest weekend ever. Only six films have ever surpassed $100 million in their second weekends.

Repeat viewings from comic-book enthusiasts, as well as premium formats like Imax and 3D have helped box office receipts reach extraordinary heights. Imax theaters have accounted for $170 million of tickets sold across the globe, while just under $1 billion has come from 3D screens. Only two films in history — Avatar and Star Wars: The Force Awakens — have earned over a billion dollars from the 3D format.

Overseas, Avengers: Endgame remained the No. 1 film in all markets aside from Japan. This weekend, the superhero blockbuster raked in another $282.2 million from 55 international markets. Top foreign territories include China ($575 million), the UK ($89.9 million), and Korea ($82.1 million). — Bloomberg/Reuters

State-of-the-art damper system at The Seasons

May 7, 2019 | 12:06 am

AFTER the recent earthquake in various parts of the country, there has been renewed focus on whether or not buildings can withstand the so-called “Big One.”

The Philippines should look to Japan, where buildings and infrastructure are adapted to withstand natural disasters, as a model. One of the biggest innovations is the earthquake vibration control technology — the Visco-elastic dampers (VCDs).

As defined, dampers are huge concrete blocks or steel bodies mounted in skyscrapers of other structures, and move in opposition to the resonance frequency oscillations of the structure through springs, fluid or pendulums.

The VCDs are used by some of the world’s tallest buildings such as Tokyo Skytree and Taipei 101.

In the Philippines, The Seasons Residences at Grand Central Park, the residential project being developed by Federal Land and Japanese conglomerates Nomura Real Estate Development Co., Ltd. and Isetan Mitsukoshi Holdings Ltd., is also employing this state-of-the-art technology.

“The mixed-use, lifestyle center features the marriage of Japanese innovation and design with the Philippines’ unique brand of community… One of the features highlighted was the use of the VCD system which acts as shock absorbers to ensure that residents are safe and comfortable during earthquakes and typhoons,” the developer said in a statement.

The Seasons Residences also adheres to the National Building Code to further ensure an earthquake-resistant structure.

The Japanese-inspired residential project will have four towers, namely Haru (Spring), Natsu (Summer), Aki (Autumn), and Fuyu (Winter). It is located on 8^th Avenue corner 36^th Street, Grand Central Park in North Bonifacio Global City, Taguig.

Condo units will also employ Japanese technology in other aspects like in storage solutions to maximize the available space.

This project will also house the first Mitsukoshi Mall, set to open by 2021. This will have a mix of Japanese and international brands. — V.M.P.Galang

Cement firms’ Q1 income up on higher prices

May 7, 2019 | 12:06 am

CEMENT manufacturers reported stronger earnings in the first three months of 2019, thanks to higher average selling prices of cement for the period.

In a regulatory filing, Eagle Cement Corp. (ECC) said its net income grew by 49% to P1.59 billion in the first quarter, after net sales also jumped 34% to P5.37 billion.

The listed firm led by businessman Ramon S. Ang attributed the increase to a double-digit uptick in sales volume alongside an improvement in the average selling price of cement. It added that the strong domestic demand was primarily driven by private consumption.

ECC saw cost of goods sold rise by 44% during the period, as it had to increase its consumption of coal as well as the use of imported clinker due to operational requirements. Operating expenses also went up by 27% to P522.7 million after freight costs jumped 31% and manpower costs also surged by 89%.

The company said it spent a total of P228.22 million in capital expenditures during the period, out of its full-year allocation of P3.28 billion. Its capital spending will support the expansion of its Bulacan facility by 1.5 million metric tons (MT) annually, resulting to an annual capacity of 8.6 million MT by 2020.

ECC is also developing its fourth production line in Cebu with a projected capacity of two million MT. The facility is scheduled to be completed in 2021.

Meanwhile, Cemex Holdings Philippines Corp. (CHP) recorded a consolidated net income of P169 million in the January to March period, 145% higher than the P69 million it booked in the same period a year ago. Net sales also improved by six percent to P6.24 billion.

CHP said the increase was “mainly due to lower foreign exchange losses and higher operating earnings.” The company also noted that domestic cement prices were up by seven percent due to price adjustments implemented last year.

The company saw strong demand from the residential segment, and is seen to continue with the development of more residential projects in Central Luzon and Calabarzon due to upcoming infrastructure projects in the area.

CHP is currently expanding Solid Cement, with investments of up to $235 million. The new facility is expected to come online in the first quarter of 2020. — Arra B. Francia

Viva joins Lionsgate’s international film group

May 7, 2019 | 12:06 am

GLOBALGATE Entertainment, the local-language film consortium of American entertainment company Lionsgate, has added the Philippines’ Viva Communications, Inc. to its 13-country entertainment network which signal’s Viva’s strengthening efforts to make its productions available to the international market.

“Viva has a rich and diverse pool of creative talent and a massive catalogue of original content. It is now the right time to show the world what Filipinos are capable of and I believe that Globalgate Entertainment is the right partner to bring this into fruition,” Viva Communications, Inc. Chairman and CEO Vicente R. del Rosario, Jr., said in a company press release.

Viva currently has almost four decades of experience as a multimedia distributor of Hollywood and local-language content in the country. Its affiliated labels include Viva Films, Viva International Pictures, Viva Live, Viva Networks, Viva Records, and Vicor Records.

Among the films produced by Viva in recent years were Kita Kita (2017), Sid & Aya (2018), Aurora (2018), and Never Not Love You (2018).

Established in 2016, Globalgate — headed by its principals Clifford Werber, William Pfeiffer, and Paul Presburger — was created to produce and distribute local language films from around the world resulting in “mainstream, wide release local language films in key international territories,” the company’s website says.

“As Hollywood studios reduce film output and increasingly rely on high-budget, so-called ‘tent-pole’ films to which they retain worldwide distribution rights, content-deprived independent, international distributors are increasingly focused on local-language films produced for mainstream audiences. International audiences are responding with local-language films now commandeering the weekly ‘Top 10’ film charts in key territories,” the website added.

It added that the company which “sources and curates intellectual properties and remakes” currently has a library of over 20,000 titles from its consortium partners

Among Globalgate’s current partners are Televisa (Latin America), Gaumont (France), Nordisk (Scandinavia), Kadokawa (Japan), Lotte (South Korea), Tobis (Germany), and Rai (Italy). The company also has partners in Turkey, Belgium, Colombia, and Brazil while Lionsgate covers the US, UK, and Canada.

“Viva Communications, a closely knit, world-class content production and distribution company, is a perfect fit for Globalgate’s consortium. Together with Vic and the entire Viva family, we’ll focus on production of mainstream Filipino films while augmenting Globalgate’s formidable inventory of commercial intellectual property sourced from our consortium partners around the world,” Globalgate said in the release. — Zsarlene B. Chua

Art-led hotels offer a stylish stay in New Zealand

May 7, 2019 | 12:05 am

LOOKING for a stylish place to stay when in New Zealand? Not to worry, since the country boasts of several art and design-led hotels, including a luxury lodge in the southern Alps and a stylish Auckland city hotel by a Kiwi fashion designer.

Opening its doors last November, The Lindis is a luxury lodge described as a “architectural tour-de-force featuring a roofline that follows the natural undulations of its South Island high country resting place.” Guests can also enjoy outdoor activities such as hiking, fishing and stargazing while in the Ahuriri Valley, located in central South Island near Omarama.

QT Wellington Hotel, once owned by art collector and entrepreneur Chris Parkin, has been included in Yahoo’s list of the “Best Hotels in the World with Magnificent Artwork.” The hotel recently opened Gallery 4, which features 25 suites on level 4. Throughout the hotel, original artworks from local and international artists can be found, including a life-size bull made from corned beef cans by New Zealand artist Michel Tuffery.

In Auckland, there are several artsy hotels you can choose from.

The So/Auckland is a five-star, 130-room hotel designed by Kiwi fashion designer World. The hotel takes inspiration from the city’s volcanic origins and the heritage building’s former life housing gold reserves. It claims to offer “a hypnotic experience where the outside world is left behind.”

Auckland is also home to the Hotel Grand Windsor, a 10-storey heritage-listed building that was once the city’s first skyscraper. Inspired by the art deco style, the Hotel Grand Windsor MGallery by Sofitel opened in 2016 with 79 elegantly designed rooms and suites. It has been named the Best New Hotel (in the world) and won the titles of Australasia’s Most Inspired Hotel Design, and Best New Hotel in Australasia at the 2018 Boutique Hotel Awards in London.

The Lodge at Kinloch, located on a 254-hectare golf course on the shores of Lake Taupo, is described as a “white modernist building complete with turrets that is intended as a modern interpretation of a Victorian-era castle.” The building was designed by award-winning New Zealand architect Andrew Patterson, while the lodge interiors were done by interior designer Virginia Fisher.

In Queenstown, the historic Hulbert House offers suites with canopy beds, chandelier and antique writing desks. The 130-year old Victorian villa was restored by interior designer Neil McLachlan and is protected by the Historic Places Trust.

The Art Deco Masonic Hotel is touted as the “jewel” of Napier, known as the art deco capital of the world. The waterfront hotel is built of reinforced concrete and emblazoned with the word MASONIC in red leadlight above the entrance.

For those looking to stay close to nature, head to Annandale — a working farm on the edge of the Pacific Ocean near Christchurch. Owner Mark Palmer tapped architect Andrew Patterson to restore the property’s original buildings — an 1884 homestead and an original shepherd’s cottage — and create two additional new luxury retreats.

Annandale’s Seascape is an ultra-modern concrete and glass hideaway, while the award-winning four-bedroom Scrubby Bay House was designed as “a piece of slowly ageing farm driftwood around which stock can graze.”

The King & Queen luxury hotel in New Plymouth shows off its cutting-edge design with an exterior that features a distinctive vertical louvre screen. Inside, the rooms, suites and apartments have art from both local and international artists.

RRHI earnings drop 32% in 1st 3 months

May 7, 2019 | 12:05 am

ROBINSONS Retail Holdings, Inc.’s (RRHI) attributable profit dropped by more than a third in the first quarter of 2019, amid a double-digit topline growth due to the consolidation of Rustan Supercenters, Inc. (RSCI).

In a statement issued Monday, the Gokongwei-led retailer said net income attributable to the parent fell 32% to P827 million, versus the P1.21 billion it realized in the same period a year ago. Excluding RSCI, the company would have booked an eight percent uptick in core net earnings to P1 billion.

RRHI completed the acquisition of the Rustan’s chain in December last year, and is now working on rationalizing its operations.

RSCI also dragged the listed firm’s operating income to P1.2 billion, 6.1% lower year on year. Without RSCI, operating income would have risen by 7.3%.

Net sales, meanwhile, went up by 29% to P37.35 billion, driven by the full quarter contribution of RSCI. This was supported by blended same-store sales growth (SSSG) of 4.1%.

On a stand alone basis, the drugstore business posted the highest SSSG of 13.9% on account of the high incidence of flu, cough, colds, and measles during the period. The supermarket segment, which contributed 55.5% of consolidated sales, booked an SSSG of 5.5%.

RRHI ended the quarter with a total of 1,911 stores, comprised of 253 supermarkets, 50 department stores, 209 do-it-yourself stores, 512 convenience stores, 510 drugstores, and 377 specialty stores. The retailer plans to add 120-150 stores this year, but openings will mostly be held in the second half of the year.

The Gokongwei-led firm also said it spent P650 million in capital expenditures for the quarter, out of its budget of P3.5-5 billion for 2019. — Arra B. Francia

1...11,04311,04411,045...14,251 Page 11,044 of 14,251