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SMC Global’s acquisition of Masinloc power plant gets go-signal from PCC

THE Philippine Competition Commission (PCC) has approved a San Miguel Corp. (SMC) subsidiary’s acquisition of the 630-megawatt (MW) Masinloc coal-fired power plant in Zambales.

In its decision dated Feb. 23, 2018, the antitrust watchdog said the acquisition of the power plant by SMC Global Power Holdings Corp. does not result in a substantial lessening of competition in the relevant markets.

The approval comes after SMC Global announced in December last year that it had reached a share purchase agreement with the two equity holders of the power plant’s owner, Masin-AES Pte. Ltd. in a deal worth $1.9 billion.

In clearing the deal, PCC cited three reasons, first: “There remain sufficient post-acquisition competitive constraints from competitors in the power generation and retail electricity supply market.”

“There appears neither increased ability nor incentive to engage in anti-competitive foreclosure, post acquisition,” it added.

Thirdly, the PCC said: “The transaction is not likely to substantially increase the likelihood that the parties will engage in anti-competitive coordinated behavior.”

PCC said it rendered its decision based solely on the facts and circumstances of the transaction disclosed by SMC Global and AES Corp.

The proposed transaction involves the acquisition by SMC Global of a 51% and 49% equity interests of AES Phil Investment Pte. Ltd. and Gen Plus B. V. respectively, in Masin-AES. It also involves the acquisition of a 100% equity interest of AES Corp. in AES Transpower Pte. Ltd., and 100% equity interest of AES Phil in AES Philippines, Inc.

SMC Global’s portfolio in the power generation includes Sual Power Plant in Sual, Pangasinan; San Roque Hydroelectric Multipurpose Power Project in San Manuel, Pangasinan; Ilijan Power Plant in Ilijan, Batangas, among others.

PCC said SMC Global intends to improve its baseload capacity to provide affordable and reliable supply of power to its customers, while AES Corp. aims to re-shape its global portfolio of businesses and markets to be consistent with its new strategy.

“As to Gen Plus B.V., their objective in pursuing the transaction is to focus on its existing power plant portfolio in the Luzon market and to pursue new development and investment opportunities for thermal and renewable power plants in the Philippines,” it added.

As a result of the transaction, SMC Global will become the 100% owner of each of Masin-AES, AES Transpower and AES Philippines. — Victor V. Saulon

BDO income up on expansion of core businesses

BDO Unibank, Inc. booked higher earnings in 2017 on the back of strong expansion across its business segments.

In a disclosure to the local bourse on Monday, the Sy-led BDO said it recorded a record-high net income of P28.1 billion in 2017, up 7% from the P26.1 billion logged in 2016.

BDO said the “sustained expansion in lending, deposit-taking and fee-based businesses” boosted its performance last year. The bank’s net interest income climbed 25% to P81.8 billion last year from the P65.6 billion posted in 2016.

The bank’s customer loans expanded 18% to P1.8 trillion from the P1.5 trillion booked in 2016 as all segments posted strong growth.

BDO’s total deposits likewise grew 11% to P2.1 trillion in 2017 from the P1.5 trillion booked in the prior year as low-cost current account and savings account deposits — which made up 73% of the bank’s total deposits — rose 12%.

The bank’s non-interest income also grew 13% year-on-year to P47.2 billion.

The increase, the bank said, was led by its fee-based income which rose 30% to P28.9 billion. Insurance premiums likewise went up 23% to P9.9 billion. These offset the 20% decline in the lender’s trading and foreign exchange gains to P3.9 billion due to “challenging market conditions.”

Overall, the bank’s gross operating income rose 20% to P129 billion.

Meanwhile, BDO’s operating expenses climbed 21% to P84.9 billion from the P70.1 billion logged in 2016. Excluding one-time and extraordinary items, however, expenses would have increased by just 15%.

The bank opened 76 new branches in 2017, bringing its total branches to 1,180, including its Hong Kong branch.

The lender also set aside higher provisions totalling P6.5 billion, which covers the required provisioning associated with the change in loan loss methodology to expected credit losses.

The bank’s gross non-performing loan (NPL) ratio improved to 1.2% in 2017 from its end-2016 ratio of 1.3%. NPL cover also rose to 146% from the 139% in 2016.

BDO’s capital base stood at P298.3 billion, with its capital adequacy ratio and common equity Tier 1 ratio at 14.5% and 12.9%, respectively, above the regulatory requirements. The bank raised P60 billion in fresh equity through its stock rights offering in January 2017.

“For 2018, BDO believes that its focused growth strategy, robust business franchise and solid balance sheet and capital base place the bank well-positioned to tap opportunities in growth sectors benefiting from the country’s favorable demographics and the government’s infrastructure build-up,” the bank said in the disclosure.

As of September 2017, BDO was the biggest bank in the country in terms of assets, capital, deposits and loans.

BDO shares closed at P150 each yesterday, up P3 or 2.04% from the previous day. — K.A.N. Vidal

Bollywood legend Sridevi dies at 54 of cardiac arrest

NEW DELHI — Indian actress Sridevi, arguably Bollywood’s first female superstar, died in Dubai after cardiac arrest, media reported on Sunday. She was 54. Sridevi is survived by her husband — producer Boney Kapoor — and daughters Jhanvi and Khushi. She was in Dubai to attend a family wedding and died late on Saturday. In a career spanning five decades, Sridevi acted in 300 films and was awarded the Padma Shri, India’s fourth-highest civilian honor in 2013. Born Shree Amma Yanger Ayyapan in the southern state of Tamil Nadu, she started acting at the age of four, appearing in several Tamil-language films in the 1960s and 1970s, and eventually dropping out of school for a career in the movies. She acted in Tamil, Malayalam, and Telugu films, performing alongside leading men such as Kamal Haasan and Rajinikanth. Sridevi made her Bollywood debut in 1979 with Solva Sawan (16th spring), but it was in 1983, with Balu Mahendra’s Sadma (Shock) that she made her mark in the Hindi film industry. The year, she also acted with Jeetendra in K. Raghavendra Rao’s blockbuster Himmatwala (The courageous one), cementing her place as one of Bollywood’s top actresses. — Reuters

Berjaya PHL invests in Malaysian restaurant operator

BERJAYA Philippines, Inc. said it has invested in a company that operates the Starbucks and Kenny Rogers Roasters brands in Malaysia.

In a disclosure posted Monday, Berjaya Philippines said it purchased 1.5 million shares in Berjaya Food Berhad (BFood), equivalent to 0.4% of the company’s total outstanding shares.

The shares were priced at 1.58 Malaysian ringgit (P21) apiece for a total of 2.37 million Malaysian ringgit (around P31.5 million). The shares were purchased from the open market of Bursa Malaysia Securities Berhad. Berjaya said it used internal foods to fund the transaction.

Incorporated in 2009, BFood develops and operates the chain of Kenny Rogers Roasters restaurants in Malaysia. It also owns 100% of Berjaya Starbucks Coffee Company Sdn Bhd., which operates over 200 stores under the Starbucks brand in the country. BFood also owns 100% of Jollibean Foods Pte Ltd., operating 25 Jollibean stores and eight Sushi Deli outlets, according to its Web site.

Prior to BFood, Berjaya Philippines has also invested in the Malaysian licensee of the chain of 7-Eleven convenience stores in July 2017. The company said it has acquired a 0.49% stake in 7-Eleven Malaysia Holdings Berhad (SEM) for P87.16 million. SEM has over 2,100 7-Eleven convenience stores in Malaysia.

Incorporated in 1924 originally as Central Azucarera de Pilar, Berjaya Philippines has since changed its name and core investments, as it is now engaged in the distribution of Mazda motor vehicles with its 25.48% stake in Berjaya Auto Philippines, Inc.

Other than motor vehicle distribution, Berjaya Philippines also leases online lottery equipment to the state-owned Philippine Charity Sweepstakes Office in Luzon through wholly-owned unit Philippine Gaming Management Corp.

Berjaya Philippines booked a net income attributable to the parent of P129.2 million in the quarter ending October 2017, 337% higher than the P29.5 million it recorded in the same period a year ago. This comes amid flattish revenues during the period at P6.99 billion.

Shares in Berjaya Philippines rose by two centavos or 0.41% to end at P4.89 each at the Philippine Stock Exchange on Monday. — Arra B. Francia

Palafox backs MyCitiHomes in its biggest project yet

PALAFOX Associates’ principal architect and urban planner Felino “Jun” Palafox, Jr. — a name that’s been equated with sustainable architecture — has been known for not accepting all projects that come his way.

But he said yes to a 47-hectare master planned community that developer MyCitiHomes is building in Barangay Panungyanan, General Trias, Cavite.

Sabella will be MyCitiHomes’ biggest project yet. The developer for the most part has concentrated on affordable housing projects since 1983.

Together, Palafox and MyCitiHomes will be building Sabella.

“For Sabella, we did the master plan, concept, and architecture for the common areas,” Mr. Palafox told BusinessWorld in a Feb. 13 interview.

The Sabella project will be built on principles that coincide with his firm’s core values, the urban planner said.

“It’s really our mission and vision: value for God, country, and planet earth. Then the five guidelines: people first like affordable housing with creation of jobs that will alleviate poverty; then planet earth and for the environment; then we can talk about prosperity and economic growth; then culture, history, and heritage; and interfaith and spirituality,” Mr. Palafox said.

“If one of them does not satisfy, we don’t accept the project.”

MyCitiHomes’ newest master planned community, Sabella, features an eco-park that will provide families with more facilities for outdoor activities. The eco-park will include amenities for team building activities and a zip line.

Sabella will feature a three-hectare eco-tourism park with amenities for boating and fishing, a greenhouse community garden, team building facilities, zip line, specialty shops, crafts center, and a retreat house.

The development also features the usual amenities offered in any other MyCitiHomes’ projects including a grand village entrance, a central park, playgrounds, a multi-purpose clubhouse, chapel, and swimming pool.

MyCitiHomes President and Chief Executive Officer Rosie Tsai told reporters: “We envision this to be a different project from what we normally do. It should be balanced… There will be a different kind of lifestyle, which is more geared towards family, towards a stronger community. We want to provide families with more facilities for outdoor activities.”

“Sabella is a Hebrew word, which literally translates to ‘pledge to God’ because Sabella is MyCitiHomes’ pledge that we continue in our mission and our mission is that we serve God by helping people achieve meaningful lives by building quality homes and communities,” Ms. Tsai added.

Sharing the story behind the envisioned eco-park, Ms. Tsai lamented that most families are becoming more dysfunctional because families do not spend much time with each other, and instead focus their attention on gadgets or in the company of other people like friends.

“The amenities will be within the project so that our homeowners won’t have to go far to have a more family-oriented recreation,” she said, adding that the amenities will cater to everyone from kids to senior citizens.

Prospective buyers can choose from either townhouse or single units with prices ranging from P1.7 million to P2.4 million, which are available through various financing options like Pag-IBIG, bank, and MyCitiHomes in-house financing. There will be a total of 1,800 units to be sold occupying 15 hectares of the property.

The company plans to break ground on Sabella early this year, with a goal to sell 1,800 units in the next two years, Ms. Tsai said.

“Architect Jun Palafox is one of the foremost urban planners in the Philippines. We’d like homeowners to have a strong sense of responsibility, and respect for people and the environment; and architect Jun is known for that,” Ms. Tsai said. — Romsanne R. Ortiguero

PSBank books higher earnings

PHILIPPINE Savings Bank (PSBank) saw its net income climb in 2017 on the back of the strong performance of its core revenues.

In a statement on Monday, the Ty-led PSBank reported a net income of P2.7 billion last year, up 8.3% from the P2.5 billion booked in 2016.

The thrift banking arm of Metropolitan Bank & Trust Co. attributed the profit increase to the continued strong performance of its core revenues, supported by its net interest and fee-based incomes, which grew 14.6% and 19.9%, respectively.

The lender’s loan portfolio expanded by 13.3% to P146.3 billion in 2017 from P129.2 billion in the previous year, as automotive and mortgage loans continue to drive its consumer lending growth. Meanwhile, loans to small and medium enterprises boosted its commercial lending segment.

PSBank’s non-performing loan ratio was at 1.2% as of end-2017.

Deposits increased to P188.9 billion in 2017, 19.3% higher than the P158.4 billion booked in 2016, with low-cost funds rising by 16.3%.

Overall, PSBank ended last year with P223.3 billion in total assets, up 13.4% from the previous year, while total equity went up 11.8% to P22.4 billion.

The bank’s Tier 1 ratio was at 11.1%, while its total capital adequacy ratio (CAR) stood at 13.9%, well above the 7.5% and 10% minimum requirements imposed by the central bank, respectively.

Return on equity was at 12.5%, while earnings per share rose to P11.05 from P10.20 year-on-year.

“We are pleased to see that the results of our efforts in digitization and customer service are becoming evident with the year in and year out strong performance of our core business, making our growth stable and sustainable” PSBank President Vicente R. Cuna said.

Currently, PSBank has a distribution network of 250 branches and 600 automated teller machines nationwide.

As of September 2017, PSBank was the second-biggest thrift bank in the country in asset terms.

PSBank shares went up P3.75 or 4.40% to P89 apiece yesterday. — Karl Angelo N. Vidal

Actor Stephen Fry reveals battle with prostate cancer

LONDON — British actor Stephen Fry said on Friday he has had surgery to remove his prostate after battling cancer for two months, adding in a video posted on Friday that the operation appears to have been successful. The 60-year-old actor was part of the comic double act Fry and Laurie with actor Hugh Laurie, whom he knew from university, and has appeared in films such as V for Vendetta, The Hitchhiker’s Guide to the Galaxy, and Blackadder’s Christmas Carol. Fry said he had gone to his doctor just before Christmas to get a flu shot when signs of the cancer were first noticed. He added that his whole prostate had been removed in an operation in early January, and that the cancer did not seem to have spread. “As far as we know, it’s all been got… I generally felt that my life was saved by this early intervention,” Fry said in the video on his website. “For the moment, I‘m fit and well and happy.” Last month, Fry stepped down as host of Britain’s BAFTA film awards, having presented the ceremony 12 times. He is also known for presenting the BBC2 TV comedy quiz show QI. He has spoken frankly about his health previously, and his struggles with anxiety and depression. In 1995, he fled a London theater production just days after its opening in what he later called “emotional turmoil.” He won an Emmy in 2007 for his documentary Stephen Fry: The Secret Life of the Manic Depressive. — Reuters

2GO narrows net loss in 2017

2GO GROUP, Inc. narrowed its net loss to P310 million in 2017 from the P344 million posted in 2016, as revenues jumped 13% due to the growth of its logistics and distribution business.

In a disclosure to the stock exchange on Monday, 2GO Group said its recurring net income, which excluded one-time charges, stood at P314 million.

The listed company, which has yet to file its audited annual financial report, said its revenues rose 13% to P21.6 billion in 2017.

“Revenue growth was driven by continued strong performance in the Group’s Non-shipping business (Logistics and Distribution), which grew 30% in 2017, due to increased service offerings to existing strategic customers (e.g., end-to-end warehousing, inventory management, cross-docking, delivery, merchandising), the addition of new customers, and an increased overall focus on customer service,” 2GO Group said.

The share of non-shipping revenues accounted for 61% of 2GO’s total revenues, while shipping accounted for 39%.

Frederic C. Dybuncio, president and CEO of 2GO Group, noted 2017 was a “year of continued good underlying performance” for the company.

“Our focus on customer service and experience remained high and we continued to enhance our non-shipping business activities in particular, where we see significant long-term opportunities for growth,” Mr. Dybuncio said in a statement.

At the same time, the 2GO Group board approved the plan to merge the company with its parent Negros Navigation Company, Inc. (Nenaco).

“This is in line with its efforts to streamline operations, reduce costs and increase shareholder value,” 2GO said in a statement.

Nenaco is the parent firm of the logistics firm. 2GO is currently being managed by the group of businessman Dennis A. Uy through Chelsea Logistics Holdings Corp., along with SM Investments Corp. (SMIC). SMIC holds an interest in 2GO after it purchased a 34.5% stake in Nenaco last April.

Cebu Business Park developer set to merge with subsidiary

CEBU HOLDINGS, Inc. (CHI) is merging with subsidiary Cebu Property Ventures Development Corp. (CPVDC), as it seeks to promote operational synergies between their developments.

In separate disclosures posted after the stock market’s close on Monday, CHI and CPVDC said their respective boards of directors have approved the plan to merge the two companies, with the former as the surviving entity.

CHI is an affiliate of Ayala Land, Inc., and is the developer of the 50-hectare Cebu Business Park in Cebu City.

“The merger will consolidate the company’s portfolio under one listed entity, creating a unified portfolio for its investments and is expected to result in operational synergies, efficient funds management, and simplified reporting to government agencies as a result of the merger,” CHI said.

CHI will exchange 1.06 common shares for every one share of CPVDC Class A common shares or Class B common shares, resulting to 996.77 million CHI shares at the end of the merger. CHI said the exchange ratio was based on the net asset values of both companies.

With this, CHI will have a total of 2.916 billion outstanding shares after the merger. CPVDC, meanwhile, will cease to exist, should the transaction be approved by the Securities and Exchange Commission (SEC). CPVDC said all its assets and liabilities will also be absorbed by CHI.

The companies will seek the approval of their respective shareholders during the annual stockholders’ meetings on April 10. If approved, they will notify the SEC of the merger, which is expected to be approved within the next two months.

Incorporated in 1990 as a joint venture corporation between the province of Cebu and ALI, CPVDC is the owner and developer of the Cebu IT Park. The development covers 27 hectares and has been accredited as an IT park by the Philippine Economic Zone Authority in 2000.

Cebu IT Park is 1.5 kilometers away from CHI’s Cebu Business Park, which features residential, office, retail, and leisure facilities. Through CPVDC, CHI is also involved in the sale of office and residential condominium units, commercial lease of retail space, sale of proprietary sports club shares, and hotel development and operations.

CPVDC’s market capitalization stood at P3.385 billion on Monday, while CHI’s market cap was at P11.712 billion.

Both companies said they will disclose further information on the merger in due course.

Shares in CHI gained four centavos or 0.66% to close at P6.14 each, as CPVDC saw its shares rise 10 centavos or 1.67% to P6.10 apiece at the Philippine Stock Exchange on Monday. — Arra B. Francia

DBP profit climbs in 2017

DEVELOPMENT Bank of the Philippines (DBP) saw its net income rise in 2017 on the back of steady growth in its loan portfolio.

In a press briefing on Monday, DBP President and Chief Executive Officer Cecilia C. Borromeo said the state-owned lender booked a P5.1-billion net income in 2017, 21% higher than the P4.2 billion posted in 2016.

“There are a lot of positive things going in our institution. We are experiencing robust growth in our financials,” Ms. Borromeo said.

DBP’s net income growth was mainly driven by its gross loan portfolio, which grew 22% to P293.47 billion last year from the P240.9 billion logged in the comparable year-ago period.

Broken down, Ms. Borromeo said the lender lent a total of P76.23 billion to infrastructure and logistics projects.

DBP also approved a total of P7 billion for 132 projects under its Infrastructure Contractors Support Program to address funding gaps in support of the government’s Build, Build, Build program.

“We are intensely looking forward to helping bridge the country’s infrastructure gap and fund ongoing and proposed major infrastructure projects which are vital for sustaining high and inclusive growth,” Ms. Borromeo said.

The DBP president said the bank also helped build 120 hospitals and 2,486 schools through its P25.6-billion assistance to the social services sector.

The bank also supported small and medium enterprises by providing P57 billion under its Small Business Puhunan Loan and Broiler Contract Growing programs.

Aside from these, the lender also allocated a P21.87-billion assistance to help build environment-related projects such as those on water sewerage and management and power generation.

Meanwhile, the lender’s deposits also expanded 16% to P412.36 billion last year from the P356.24 billion recorded in 2016.

DBP’s total assets reached P597.41 billion, growing 11% from the P536.11 billion figure in 2016.

Looking ahead, DBP is eyeing to bolster its asset base to P1 trillion by 2022 through the” expansion of its deposit base and aggressive lending activities.”

The bank targets to 10 new branches and eight new extension offices across the country and add 200 more automated teller machines (ATM). Currently, DBP has a network of 125 branches, three extension offices and 637 ATMs.

Aside from this, DBP also targets to get a million new customers in the next five years to promote the government’s initiative of financial inclusion.

“This is an integral part of our advocacy to introduce more unbanked Filipinos into the financial mainstream,” Ms. Borromeo added.

For this year, the bank is targeting a net income of P5.55 billion and assets worth P657.30 billion.

“DBP will firmly work to accomplish its set directions for 2018, maximize the potentials of its human resources and seize every opportunity for growth and progress,” Ms. Borromeo said.

Data from the central bank showed that DBP was the eighth largest bank in asset terms as of September 2017. — Karl Angelo N. VIdal

Black Panther again slays North American box office

LOS ANGELES — Disney’s Black Panther sunk its claws into the top spot once again this weekend at the North American box office, taking an estimated $108 million, industry estimates showed Sunday. Following a record-shattering opening weekend — raking in $242.2 million — the frenzy to see the 18th entry in the Marvel Cinematic Universe continued, bringing total earnings to an astronomical $400 million in just 10 days, according to tracker Exhibitor Relations. Its global take is now more than $700 million. The film has yet to open in China or Japan. It is only the fourth movie ever to make more than $100 million in its second weekend, joining Star Wars: The Force Awakens, Jurassic World, and Marvel’s The Avengers, according to Disney, which owns Marvel Studios. Directed by Ryan Coogler, Black Panther features an almost entirely black cast led by Chadwick Boseman as the first non-white superhero to get his own standalone movie in the franchise. Starring alongside the likes of Michael B. Jordan, Lupita Nyong’o, and Daniel Kaluuya, Boseman plays the titular superhero also known as T’Challa, king and protector of Wakanda, a technologically advanced, affluent, never-colonized utopia in Africa. In at an anything-but-close second place was newly released dark comedy Game Night, with $16.6 million. Featuring Jason Bateman and Rachel McAdams, the film follows a group of friends whose game night descends into a murder mystery. Dropping one place into third was Peter Rabbit, based on Beatrix Potter’s classic children’s book. Sony’s family-friendly offering brought in $12.5 million in its third week in theaters. Paramount’s new science fantasy horror Annihilation was off to a weak start, debuting in fourth place at only $11 million. Starring Natalie Portman, the film — based on the novel by Jeff VanderMeer — tells the story of a team of military scientists who go into a quarantined zone known as “The Shimmer.” Finally, in at fifth was Fifty Shades Freed — the last film in the trilogy based on the wildly successful novels by EL James — with takings of $6.9 million. Rounding out the top 10 were: Jumanji: Welcome to the Jungle ($5.65 million); The 15:17 to Paris ($3.6 million); The Greatest Showman ($3.4 million); Every Day ($3 million); and, Early Man ($1.7 million). — AFP

Domestic market capitalization of select stock exchanges in Asia Pacific

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