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CLI to develop P3.6-B mixed-use project in Cebu

CEBU Landmasters, Inc. is developing a mixed-use project called Astra Centre in Mandaue, Cebu. — COMPANY HANDOUT

CEBU Landmasters, Inc. (CLI) has unveiled a P3.6-billion mixed-use project in Cebu which will include a mall, office spaces, residential units, and a hospitality component.
In a statement issued Thursday, the listed property developer said it will develop the two-tower Astra Centre on a 1.2-hectare lot on A.S. Fortuna St. in Mandaue City. The project looks to take advantage of the lack of integrated developments in the area.
“Astra Centre’s strategic location combined with the synergies that will arise from the development’s components ensure a high-energy development,” CLI Chief Executive Officer Jose R. Soberano III said in a statement.
Astra Centre will be developed in two phases, with the first phase to include the construction of a podium and the first tower. The podium is designed to house an upscale, three-level boutique mall covering 8,300 square meters (sq.m.) of leasable area.
The first tower will have 30 storeys with residential and hospitality components. The hotel will be operated by the Radisson Hotel Group, bringing in its Radisson RED brand for the first time to the country.
Radisson RED will offer 146 rooms which will cater to millennials with round the clock facilities, high-speed WI-FI, and “grab and go” food and beverage options, among others.
“Cebu City is the perfect location to introduce Radisson RED to the Philippines, being a dynamic urban center with a youthful vibe and positive outlook. We look forward to welcoming guests at Radisson RED and to introducing a new era of hospitality to the country,” Radisson Hotel Group President for Asia Pacific Katerina Giannouka said in a statement.
Astra Centre’s residential condominium will be called One Astra Place, and will have 478 units across 15 floors. There will be studios sized 22 sq.m. and one-bedroom units with 36 sq.m. Residents will be able to use amenities such as an infinity pool, a kiddie pool, function rooms, a gym, an al fresco area, and a skydeck.
The second phase of the project will include the second tower which will house the Astra Corporate Center and another residential condominium. Twelve floors will be allotted for office space, with a total leasable area of 15,900 sq.m.
Astra Centre will be CLI’s second mixed-use project following Baseline Center in Cebu City, which was launched back in 2015. That project also has residential condominium, hotel, and office components.
CLI’s net income jumped 17% to P498.7 million in the first three months of 2018, supported by a 14% increase in revenues to P1.26 billion.
Shares in CLI went down by 1.28% or six centavos to P4.61 each at the stock exchange on Thursday. — Arra B. Francia

Crazy Rich Asians looks beyond Asia to break Hollywood mold

ACTRESS Kris Aquino, along with her son Bimby, attends the premiere of Crazy Rich Asians on Aug. 7 in Hollywood. — AFP

LOS ANGELES — Crazy Rich Asians may be the first Hollywood movie in 25 years with an all-Asian cast but the filmmakers hope it will be enjoyed by moviegoers of all backgrounds.
The romantic comedy about an Asian-American New Yorker who goes to Singapore to meet her boyfriend’s wealthy and tradition-bound family of Chinese descent is based on the 2013 best-selling book of the same name by Kevin Kwan.
“It’s been way too long since we had an all-star Asian cast in a Hollywood studio movie, but at the same time, this movie is for everyone,” Kwan told Reuters at the red carpet premiere in Los Angeles on Tuesday.
“My books are read around the world in 20 languages, and in the US 80% of my readers are Texan, Oklahoman, Kansas — like, white people — and they love my books. So it’s a movie that everyone can enjoy and appreciate,” he said.
The movie stars established actresses like Michelle Yeoh, from Crouching Tiger, Hidden Dragon, and Constance Wu from US television comedy Fresh Off the Boat along with newer faces like New York rapper and actress Awkwafina, and Henry Golding, who was raised in Britain.
Director Jon M. Chu said no single movie could represent all the Asian people in the world but he hoped the plot and the array of actors in Crazy Rich Asians would show that “we’re layered and complicated and not just the token computer guy or the sex kitten.”
“All these things just help get people more information about who we are as a people and help differentiate that we’re not just one blob being Asian,” Chu said.
The last Hollywood studio film featuring a large Asian cast was The Joy Luck Club in 1993. Crazy Rich Asians starts its worldwide roll out on Aug. 15. — Reuters

Composition of PSE index remains unchanged

THERE will be no changes in the 30 companies comprising the Philippine Stock Exchange index (PSEi), the bourse operator said on Thursday.
In a statement, the Philippine Stock Exchange, Inc. (PSE) said the result was derived from its review covering the July 2017 to June 2018 period.
Considered a local barometer for investor confidence, the PSEi should be composed of top companies based on liquidity and full market capitalization, and have a free float level of at least 15%.
Among the sub-indices, the financial index was the lone sector that remained unchanged after the review. Three firms will be added to the industrial index, namely Ginebra San Miguel, Inc., PetroEnergy Resources Corp., and Pepsi-Cola Products Philippines, Inc. They replace Alsons Consolidated Resources, Inc., San Miguel Food and Beverage, Inc., and Phinma Energy Corporation.
The PSE has increased the number of companies under the holding firms index to 15, adding Prime Orion Philippines, Inc. and Solid Group, Inc. For property, Cebu Landmasters, Inc and Philippine Estates Corp. have been added, while Sta. Lucia Land, Inc. was removed.
Boulevard Holdings, Inc., Golden Bria Holdings, Inc., and IPM Holdings, Inc. have been dropped from the Services Index, with Philippine Seven Corp. and Wilcon Depot, Inc. added in their place.
Lastly, the PSE removed Atlas Consolidated Mining and Development Corp. and Lepanto Consolidated Mining Co. from the mining and oil index.
“The continued implementation of the revised index management policy has yielded a more representative set of companies composing the indices given the more stringent requirements we have adopted,” said PSE President and Chief Executive Officer Ramon S. Monzon said in a statement.
The changes will be implemented starting Aug. 20. — Arra B. Francia

Oscars to add ‘best popular film’ award, shorten gala

LOS ANGELES — Organizers of the Oscars — under fire for plummeting ratings and accused of elitism — on Wednesday announced the creation of a new category to honor top blockbusters and said they would shorten the ceremony to attract more viewers. Earlier this year, the 90th Oscars on March 4 lasted nearly four hours, and posted all-time low television ratings with 26.5 million viewers. For 2019, organizers are hoping to produce a “more accessible” three-hour show — by presenting some of the awards during commercial breaks, Academy president John Bailey and chief executive officer Dawn Hudson told members. Edited excerpts of those presentations will then be shown during the broadcast. They will also create a new award for “outstanding achievement in popular film” — a response to accusations that for the past decade or more, the Academy has honored art-house fare only seen by limited audiences. The Academy did not offer specifics about how the category will be defined. The final reform will be to hold the ceremony earlier in the calendar year — in 2020, it will shift to Feb. 9 — AFP

San Miguel says recurring profit jumps 29% in 1st half

DIVERSIFIED conglomerate San Miguel Corp. (SMC) grew its recurring profit by 29% in the first six months of 2018, following higher volumes and favorable selling prices across its units.
In a statement issued Thursday, SMC reported a recurring net income of P35.5 billion as of end-June, supported by a 27% jump in consolidated revenues to P499 billion.
The listed company said that including the impacts of mark-to-market losses due to foreign exchange translation, net income would have stood at P27.6 billion, 6% higher year-on-year.
“Increased business focus and a lot of hard work were key to our group’s stellar performance. We’re encouraged by the results we’ve had so far, and are very hopeful that this momentum will carry through for the rest of the year,” SMC President and Chief Operating Officer Ramon S. Ang was quoted as saying in a statement.
SMC’s core interests are in food and beverage, power, fuel and oil, and infrastructure.
The newly consolidated food and beverage arm under San Miguel Food and Beverage, Inc. (SMFB) delivered a 20% increase in net income to P15.4 billion. This followed a 15% uptick in combined sales revenues to P137.4 billion.
The food business alone generated a profit of P3.1 billion, as consolidated revenues went up 12.4% to P62.9 billion due to the strength of its agro-industrial and branded value-added businesses.
The beer unit through San Miguel Brewery, Inc. expanded its revenues by 18% to P62.5 billion. Its net income accordingly grew by 26% to P11.3 billion for the first semester.
Ginebra San Miguel, Inc. posted a net income of P506 million, after revenues went up 19% to P12 billion due to the growth of its Ginebra San Miguel and Vino Kulafu brands.
Petron Corp. exhibited profit growth of 16% to P9.5 billion from January to June, fueled by the sales volumes from both Philippine and Malaysian operations. The company also benefited from the rising prices of crude oil and finished products.
Petron’s consolidated revenues reached P273.5 billion, 32% higher than the P207 billion it logged in the same period a year ago.
Meanwhile, SMC Global Power Holdings Corp. saw its consolidated revenues climb by 41% to 57.4 billion, as it recognized additional contributions from Masinloc, Limay, and Malita, alongside higher average realization prices for Sual’s bilateral and spot sales, and higher spot sales from Ilijan.
The power unit’s operating income stood at P17 billion for the first half, 28% higher than the P13.3 billion it posted in the same period a year ago.
For the packaging business, the San Miguel Yamamura Packaging Group expanded its operating income by 17% to P1.6 billion in the first semester. Sales revenues went up by a fourth to P17.6 billion following strong sales from the glass, plastics, and metal products. The company also noted the positive performance of its Australian operations.
The infrastructure business also recorded an 11% increase in consolidated revenues to P12.1 billion, as the company saw higher traffic volume from its operating toll roads. These include the South Luzon Expressway, Skyway Stage 1 and 2, and the Ninoy Aquino International Airport Expressway. Its operating income likewise gained 19% to P6.2 billion.
Shares in SMC fell by 70 centavos or 0.5% to close at P138.30 each at the stock exchange on Thursday. — Arra B. Francia

Pink out of hospital, cancels another Sydney show

SYDNEY — American pop star Pink has been discharged from an Australian hospital after being treated for an “excruciating” gastric virus, but has cancelled another Sydney concert scheduled for Thursday while she recovers. The singer pulled out of a show in Sydney last Friday before battling through a Saturday performance. But she was rushed to hospital the next day, suffering from dehydration and a virus, with two further concerts called off. Pink told her 4.7 million Instagram followers: “About 20 minutes before I left for the soundcheck, I was rushed to the hospital, in excruciating pain. “I was discharged from hospital last night, and am following doctors orders of liquids and rest,” she added. On Wednesday, after being discharged, she announced the cancellation of Thursday’s performance but vowed to be back on stage at the weekend. — AFP

Accenture calls for job overhaul as response to automation, AI

COMPANIES must do their part to make the labor force more competitive in the age of automation and artificial intelligence (AI), professional services company Accenture said.
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Benedict C. Hernandez, who leads Accenture’s Intelligent Operations practice in the Philippines, told BusinessWorld in an e-mail interview on Wednesday that while jobs may be threatened by digital disruption, the need for human labor and intervention will not go obsolete.
“As businesses continue to look to and adopt new technologies such as Artificial Intelligence (AI), Automation and Analytics to improve efficiency, productivity and address changing customer experiences, businesses must act now and commit to implement intelligent technologies, alongside human ingenuity to create greater value for the business while leveraging them to continuously elevate talent and capabilities of their employees,” he said.
Mr. Hernandez cited a study by Accenture, Future Workforce — Reworking the Revolution, which emphasizes the need to “reconfigure” jobs.
“[F]indings from the research show that, to succeed, companies will have to reimagine work, pivot their workforce to disruptive business models and scale up ‘new skilling’ for their employees,” he said.
This includes redefining the roles and job descriptions in a company, aligning these to the new business model as impacted by automation, AI and analytics, and enhancing human talent based on the identified needs.
In a media briefing in Taguig City on Tuesday, Mr. Hernandez said even with high-end technological tools and a data-driven backbone, an intelligent enterprise will still need innovative talent to improve its performance.
“You saw examples of analytics, and we do that for hundreds and hundreds of clients around the world. These are global data. We can’t do analytics if we don’t have thousands of analytics experts. So that’s really what we mean by innovative talent,” he said.
Accenture said 160,000 of its employees globally have been trained to be knowledgeable on new IT. In the Philippines, Accenture says 80% of its employees are “thriving in the digital age.”
The business process outsourcing (BPO) sector has been identified as one of the primary fields expected to take a hit from AI, which has alarmed the industry, which is a major employer. — Denise A. Valdez

MGen says in talks with ADB, WB to construct merchant power plants

By Victor V. Saulon, Sub-editor
MERALCO PowerGen Corp. (MGen) is in talks with multilateral lending agencies for a possible partnership in building merchant power plants to test the financing market that has been used to extend funding only to projects with approved power supply agreements.
“We’re talking to multilaterals whether they can come in and co-invest,” Rogelio L. Singson, MGen president and chief executive officer, told reporters in an informal gathering on Thursday.
He identified the multilateral agencies as the World Bank (WB), Asian Development Bank (ADB) and International Finance Corp.
“They were the ones who came to us,” he said.
He said MGen is willing to put in 50% of the equity in building the power plant, with the rest being shouldered by the multilateral lending agencies.
Should the deal materialize, the partnership could “give confidence” to banks, knowing that the merchant power plant project had gone through rigid evaluation, he said.
Unlike conventional ones, merchant power plants do not have long-term power purchase agreements to cover their output.
At present, lenders require projects to present an approved power supply agreement (PSA) before extending loans to energy developers. MGen has shovel-ready projects that await approval from the Energy Regulatory Commission (ERC).
Mr. Singson is looking at projects with a capacity or around 20 to 50 megawatts (MW) in solar, wind or “whatever is available.” He said the possible project could be greenfield or brownfield, referring to new projects or existing ones that can be revived or upgraded.
“We’re willing to put equity up to an amount that will give them comfort,” he said.
The MGen official expects a decision on the partnership with the multilateral lending agencies within the year. Personally, he said he prefers renewable energy projects over coal-fired power plants.
Mr. Singson earlier said he expects MGen’s renewable energy projects to account for 20% of its attributable capacity in the coming years. In the next three to four years, he expects an installed RE capacity of at least 500 to 600 MW.
MGen, a unit of Manila Electric Co. (Meralco), is developing three power plants — all coal-fired — either on its own or in partnership with other entities.
Its unit Atimonan One Energy, Inc. (A1E) is building a two-unit ultra supercritical coal-fired power plant, each with a capacity of 600-MW in Atimonan, Quezon.
A1E’s PSA with distribution utility Meralco was submitted to the ERC in April 2016 and had gone through public hearings, technical working group review and assessment of the tariff.
Another unit, San Buenaventura Power Ltd. Co., is constructing a 455-MW facility in Mauban, Quezon province. It will be the country’s first supercritical coal-fired power plant. The plant is targeted to be completed in mid-2019.
The third project, a coal-fired power plant under Redondo Peninsula Energy, Inc., has two units, each with a capacity of 300 MW using the circulating fluidized bed technology.
A PSA with Meralco for 225 MW, which was submitted to ERC for approval in April 2016, had gone through public hearings, technical working group review and tariff assessment.

PSALM preparing master plan for properties in Quezon City, Bagac

STATE-LED Power Sector Assets and Liabilities Management Corp. (PSALM) is preparing a master plan for two properties, including the lot on which the National Power Corp. (Napocor) holds office, to maximize the gains on the assets.
“That land, which is close to four hectares, is actually an asset of Napocor that has been transferred to PSALM for privatization,” Irene Joy B. Garcia, PSALM president and chief executive officer, told reporters in a chance interview.
“Another one that we’re targetting, which is very substantial, is the Bagac property of PSALM. That’s 44 hectares,” she said, describing the property’s location as right beside Las Casas Filipinas de Acuzar, a tourist destination that showcases a collection of heritage houses.
PSALM was created under Republic Act No. 9136, the Electric Power Industry Reform Act (EPIRA) of 2001, the law that restructured the Philippine power sector. It took over the ownership of all existing government-owned power generation assets. Its principal purpose is to manage the orderly sale and privatization of the assets.
“The master planning will be on a per asset basis, kasi iba iba ang feature (because the properties’ features are different),” she said.
One property, for instance, where a power plant used to stand on Isla de Provisor, Paco, Manila along the Pasig River, will be sold as is next week.
Ms. Garcia said a master plan is being readied for the Napocor compound at the corner of Quezon Ave. and BIR Road in Quezon City.
She said the property could be developed via a joint venture with a private entity.
“We don’t know yet. That’s why it’s very important to start off with a very efficient master planning of the entire compound. Once we have that, then we can do the privatization based on the outcome of the master planning,” she said.
“We’re hoping to do it before the end of 2018,” she said, thus the privatization could be scheduled by next year.
For the Bagac property, Ms. Garcia said the development is possibly geared towards making it a vacation area to take advantage of the existing “greenery” within the area.
“For Bagac, [the master plan] it’s either this year or early next year,” she said, adding that the issues to be resolved as certain areas are being used by Napocor and the management of the Bataan nuclear power plant.
PSALM earlier said it will open on Aug. 15 the bids for the Manila thermal power plant land spanning 20,975 square meters.
It also disclosed the schedule for the bidding of the Malaya thermal power plant on an “as is, where is” basis. Bidding for the plant previously failed, but this time the land on which it sits on will be bundled with the privatization, Ms. Garcia said.
PSALM had said it generated privatization proceeds from assets amounting to P918.5 billion, of which it had collected P545.2 billion. The the balance is based on a payment schedule.
The agency, which assumed in 2003 the liabilities of Napocor at P1.24 trillion, had since reduced the debt.
As of June 30, 2018, its remaining principal debt was down to P246.73 billion, while the remaining obligations under its independent power producer contracts amounted to P202.7 billion. — Victor V. Saulon

Warner Music to pay artists after selling Spotify stake

NEW YORK — Major music label Warner said Tuesday it would give back $126 million to artists after it sold its stake in streaming leader Spotify. The Warner Music Group said the share sale from Spotify, which successfully listed on the New York Stock Exchange earlier this year, earned the company $504 million, or $317 million after paying taxes. Announcing its latest earnings, Warner said it would share the spoils of Spotify with artists on its labels — whose most famous names include Coldplay, Ed Sheeran and Neil Young. Warner CEO Steve Cooper said that artists would find the Spotify proceeds on their latest royalty statements being distributed this month and in September, without details on how the sum would be divided. — AFP

Hungry for growth, food makers seek new flavor of CEO

LONDON/CHICAGO — PepsiCo Inc’s incoming chief executive Ramon Laguarta is the latest of a new generation of leaders tasked with reigniting growth at the world’s best-known food and drink brands as they fight back against media-savvy independent rivals.
Six of the world’s ten biggest food firms, including Nestle, Mondelez International Inc and Kellogg Co, have replaced their CEOs in the past three years.
Campbell Soup Co, and Hain Celestial are also on the hunt, with more in the broader consumer industry expected to follow.
Traditional titans that dominated their sectors have lost ground to smaller brands that have done a better job selling online and connecting with millennials on social media, while facing pressure from outside investors to become more efficient.
In response, boards are looking for relatively young CEOs who can crunch data like technology executives and cut costs like private equity investors.
“Fundamentally, this new generation of CEOs has a remit for change,” said EY’s lead analyst for consumer products and retail, Andrew Cosgrove. “Boards are realizing that we need new thinking.”
That means introducing new skills into the C-Suite.
“I’m hearing people saying for the very first time things like ‘We’re going to recruit a head of marketing with a background in analytics’,” said Oliver Wright, global lead for consumer goods and services at Accenture Strategy.
Last year Mark Schneider became the first outsider in nearly a century to take the reins at Nestle, the world’s largest food company. The 52-year-old healthcare veteran, nearly a decade younger than his predecessor, has stepped up acquisitions and divestitures and restructured parts of the business as he contends with activist shareholder Third Point.
Sean Connolly, 53, took over the helm at Conagra Brands in 2015 and has already moved the group’s headquarters, announced sweeping cost cuts, launched new products aimed at millennials and agreed to buy rival Pinnacle Foods.
By top management standards, early-50s is still relatively young, given that the average age of CEOs in the S&P 500 was 57.4 last year, according to executive recruiter Spencer Stuart.
FRESH PERSPECTIVE
Just over half of the 39 consumer packaged goods companies in the Fortune 500 have changed their CEO in the last two and a half years, according to executive search firm Russell Reynolds Associates.
That represents 15 percent of all CEO changes in that group of companies in that period, even though the sector only makes up 8 % of the Fortune 500.
Analysts are speculating whether the latest new appointment Laguarta, a 54-year-old Spaniard who speaks four languages, will be more open to strategic options like separating PepsiCo’s U.S. bottling business or breaking up the company.
Laguarta is a PepsiCo veteran with 22 years at the company, but others have looked elsewhere for new leaders.
About half of the new CEOs hired in the sector hired in the past five years have been internal candidates, down from roughly three quarters over the past 20 years, said David Cooper, head of Bain’s consumer packaged goods practice.
The growing acceptance of input from outside the industry comes as the consumer goods sector has been aggressively targeted by private equity firms and activist investors looking to shake things up.
Private equity firm 3G, known for engineering mergers and slashing costs, shocked the industry in 2015 when it combined Kraft Foods with its H.J. Heinz, keeping partner Bernardo Hees in charge. Nelson Peltz’s Trian Fund Management recently won a board seat after a proxy fight with Procter & Gamble Co (PG.N).
“A lot of companies have been spinning and reacting, trying to figure out how they can essentially ‘3G’ themselves to preempt being taken over, being the next victim,” said Andrew Hayes, a Russell Reynolds consultant who has helped several major consumer companies find top managers.
More CEO turnover is expected as the last generation of leaders run out of room to grow using the established playbook of consolidation and focusing on emerging markets.
“Indra Nooyi’s done a great job, she wants to go out close to on-top,” said Bernstein analyst Ali Dibadj of PepsiCo’s departing leader. “I think you’ll see that from many other CEOs as well.” — Reuters

CIC’s Q2 earnings rise on double-digit sales growth

CONCEPCION Industrial Corp. (CIC) posted a 14% growth in its attributable profit during the second quarter of 2018, fueled by a double-digit increase in sales of its products.
In a regulatory filing, the listed maker of air-conditioners and refrigerators reported a net income attributable to the parent of P402 million, versus the P352 million it booked in the same period a year ago. Net sales likewise jumped 14% to P4.62 billion for the quarter.
“We are pleased with the strong results coming out of the second quarter of 2018 as our team focused on delivering results based on cost reductions, precise strategic execution, and clear messaging across the organization in the midst of fluctuating exchange rates and high commodity prices,” CIC Chairman and Chief Executive Officer Raul Joseph A. Concepcion.
This brought the company’s six-month attributable profit to P566 million, relatively unchanged from the P570 million it generated in the first half of 2017. Net sales meanwhile went up by seven percent to P7.69 billion.
The company has been implementing initiatives to reduce its costs in the face of challenges in foreign exchange and commodity prices. CIC expects headwinds for the rest of the year which may affect profitability, but is confident it will be able to adapt in the short term.
CIC has recently formed a unit called Cortex, which will explore opportunities in technology and business model innovations. This includes manufacturing smart appliances that can monitor energy consumption to alert owners of their usage.
“The next six to twelve months are going to be exciting for CIC as we launch new products and services particularly in internet-of-things. These will be our initial foray into offering practical smart appliances and solutions to Filipino Consumers,” Mr. Concepcion said.
Shares in CIC were unchanged at P50 apiece at the Philippine Stock Exchange on Thursday. — Arra B. Francia

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