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Formula One racing welcomes newcomer Vietnam but older race hosts sweat on future

LONDON — Formula One welcomed Vietnam as its newest race on Wednesday while reminding some of the oldest, and British Grand Prix hosts Silverstone in particular, that they could take nothing for granted.
“We’re a 68-year-old entity and the nature of grand prix racing is that it is dynamic,” Formula One’s commercial managing director Sean Bratches said after it was announced that Hanoi will host a street race in April 2020.
“Silverstone was the first grand prix, but we haven’t raced at Silverstone all those 68 years. The race has been held at Brands Hatch and other venues,” he said in a Formula One question and answer.
“Nothing is immutable in this sport in terms of where we race,” he added when asked whether grands prix might be moved from their ‘traditional homes’ to a city street circuit elsewhere in the country.
Silverstone, owned by the British Racing Drivers’ Club, is out of contract after next year’s race having exercised a break clause for financial reasons and in the hope of negotiating a better deal.
Talks between the two sides remain ongoing.
The circuit has boasted sell-out crowds, with some 140,500 fans turning up on race day this year for a grand prix that is home for now-five times world champion Lewis Hamilton and a majority of the teams.
Bratches said the sport valued and wanted to keep the ‘heritage races’ — such as Silverstone, Spa and Monza — and recognized their importance to fans.
“But we are a business,” he added. “We are a public company and we have a lot of stakeholders and shareholders and we’re trying to marry what’s best for fans with running a successful business.”
Formula One has 21 races confirmed for 2019, but Germany’s Hockenheim will also be out of contract at the end of next season along with Italy’s Monza and Spain’s Circuit de Catalunya.
Vietnam is the first race contract negotiated by Liberty media since the US-based company took over Formula One’s commercial rights in January 2017 and ousted long-reigning supremo Bernie Ecclestone.
Bratches said Hanoi fitted the new vision of the sport’s owners, with another street race in Miami also in the pipeline.
“One of the things we have been intensely focused on is extending grand prix racing to iconic cities, in downtown areas, where we can best engage fans,” he added.
“Most of our grands prix are currently half an hour to an hour outside cities, so this race in Hanoi fulfills one of our preliminary goals — an iconic city hosting racing on a potentially thrilling street circuit.
“Vietnam’s concept of what grand prix racing should be about matches our vision for the sport.” — Reuters

All-Star draft reportedly to be televised

LOS ANGELES — For the second time, NBA captains will draft All-Star teams before the game is played in 2019. For the first time, the draft will be televised, the New York Times reported Wednesday.
Five starters from the East and five from the West will be selected as per tradition by fan balloting. Captains to be named will choose teams to fill out the rosters.
The NBA opted not to televise the draft in 2018, when Stephen Curry and LeBron James served as team captains. Both players disclosed their decisions to media members over time. James said immediately after the draft the process should have been televised and repeated his support Wednesday.
“What’s bad about it? It’s All-Star Weekend,” James said when asked if televising the captains’ choices would be a good thing. “You got 24 of the best players in the world that’s going to make the team. It doesn’t matter if you’re first or last, you’re 24 of the best in the world at that point in time. I don’t think it’ll be bad. We’ll see.”
DRAYMOND GREEN
Golden State forward Draymond Green has been ruled out of the Warriors’ Thursday home showdown with the Milwaukee Bucks because of a sprained right big toe, coach Steve Kerr told reporters after practice.
Green sustained the injury Monday against the Memphis Grizzlies. Kerr said Green’s status is day-to-day.
Green will be sitting out a contest in which his trademark stellar defense surely will be needed as the Warriors try to slow Bucks star Giannis Antetokounmpo, who is averaging 25.8 points, 13.3 rebounds, and 5.9 assists.
DWYANE WADE
Miami sixth man Dwyane Wade didn’t suit up for the Heat’s Wednesday night game against the San Antonio Spurs, the first time he missed a game this season.
The Heat said Wade’s absence is due to personal reasons.
Wade came off the bench for Miami in each of the first nine games this season and is averaging 14.3 points, 4.0 rebounds and 2.9 assists while shooting 45 percent from the field.
NORMAN POWELL
Toronto guard Norman Powell is out indefinitely after sustaining a left shoulder subluxation on Monday against the Utah Jazz, the Raptors announced.
The Raptors said there is no timeline for Powell’s return, but ESPN reported he will miss four to six weeks. Powell is averaging 5.0 points and 2.0 rebounds in 14.9 minutes per game for the Raptors, who are tied with the Warriors with the NBA’s best record at 10-1.
Toronto forward Kawhi Leonard, who missed the previous two games due to a foot injury, returned to action Wednesday night game against the Sacramento Kings. — Reuters

NCAA Season 94 Finals: Lyceum Pirates looking forward to Game Two with a full complement

STRUGGLED in the series-opener of their best-of-three National Collegiate Athletic Association Season 94 finals series on Tuesday as they played undermanned, the Lyceum Pirates are now turning their attention on Game Two next week with a full complement as they welcome back top man CJ Perez.
Never really got their game going until late in the fourth period, the Pirates were at the mercy of the San Beda Red Lions for much of Game One of their NCAA finals rematch.
The absence of reigning league most valuable player Perez proved to be too hard to overcome for Lyceum as it grappled early in the game to find its collective groove and got buried deep from which it could not recover from.
Perez, the team’s leading scorer and top energy guy, was banned for the series-opener after being ruled by the NCAA in violation of league rules when he applied for the Philippine Basketball Association rookie draft without formally informing the NCAA about it.
League rules stipulate that those applying for the PBA draft must first inform the NCAA in writing of their intention before submitting their application, something Perez and his handlers were reportedly not able to do.
While insisting that Perez should have been allowed to play in Game One, citing similar situations in the past and underscoring how his player “did not do anything wrong” like, say, take drugs or played in non-NCAA-sanctioned tournaments in the offseason, Lyceum coach Topex Robinson is choosing to move on, believing that the damage has been done and they have to focus now on the next game and extend the series.
Mr. Robinson said they are taking cue from their spirited fight back at the end of Game One that saw them reducing what was a 27-point lead early in the fourth period, 66-39, to just 10 points with minute left in the game.
“We could have just rolled over and died but we did not. We’re still in this and we’re excited for Game Two,” said Mr. Robinson.
Game Two of the series is set for Monday, Nov. 12, and Mr. Robinson said they will use the nearly a week lull to prepare hard with Perez figuring in their attack.
“We have a week to recover. We’ll try to see what adjustments we can make,” he said.
“We have to bring it on Monday and we’re excited to have CJ Perez back in our lineup,” Mr. Robinson added.
With Perez returning, the Pirates get added contribution across the board with the graduating player averaging 18.7 points, 8.4 rebounds, 3.9 assists and 3.3 steals a game. — Michael Angelo S. Murillo

All-Star draft

Don’t underestimate the extent of the back and forth that went on between the National Basketball Association and the players union on the proposal to televise the All-Star draft proceedings. Even as the notion supports the very purpose of the annual festivities, its implementation induces second-guessing. From the choices of captains to the order in which picks are made, those looking in will not help but wonder about the What Ifs and Could Have Beens.
Granted, making the draft public will fuel speculation, not to mention result in hurt feelings among those at or near the bottom of the rankings. LeBron James is right; speaking from his experience as 2018 skipper and armed with no small measure of logic, he argues that every player participating in the spectacle is an All-Star. Whether chosen first or 24th, he’s part of an elite group that does not include the other 426 plying their trade in the league.
Frankly, the reasons for televising the All-Star draft far outnumber those against. To begin with, fans will have a field day with the knowledge, certain to bombard social media with their opinions on how it progressed. Did personal relationships have a factor in the order? Were choices made based on rational thought? Collectively, will they lead to a more competitive match? As the contest last February proved, he new format at the very least got the two sides heavily invested in the outcome.
If nothing else, the decision to grant all and sundry access to the draft from beginning to end speaks to the progressive nature of the NBA. It continues to be the most fan-friendly league in the world, what with its heads all too aware of the need to perpetually engage even casual observers in the face of countless other products competing for their time. Most importantly, its stars are, too — which, in the final analysis, makes all the difference.
POSTSCRIPT: The NBA 2K Asia Tournament is back. Qualifiers will be held in Taiwan, Hong Kong, South Korea, and the Philippines until February 2019. The top two players from each country will then participate in the NBA 2K19 Asia Tournament Grand Finals in March 2019. Played exclusively on the PlayStation 4, the tournament features a prize pool of US$10,000.
 
Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

Gov’t names provisional 3rd major telco

By Denise A. Valdez
Reporter
A CONSORTIUM formed by China Telecommunications Corp., Dennis A. Uy’s Udenna Corp. and its subsidiary Chelsea Logistics Holdings Corp. — under the name of franchise holder Mindanao Islamic Telephone Company, Inc. (Mislatel) — emerged as provisional winner in the government’s search for the country’s third major telecommunications service provider after its two contenders were disqualified.
The auction’s outcome could still change, however, as the disqualified bidders said they will file motions for reconsideration within three days, which the selection committee will have to review within three days of receipt of such appeals.
The consortium committed for its five years of operations a cumulative coverage of 84.01% of the population, total capital and operational expenditure of P257 billion, and minimum average broadband speed of 27 Megabits per second (Mbps) in its first year of operation and 55 Mbps in succeeding years, earning it a total of 456.80 points out of the auction’s maximum 500 points. Commitments on population coverage (with 40% weight), minimum average broadband speed (25%) and capital and operational expenditure (35%) are the three criteria used to grade the bidders.
Sear Telecommunications, Inc. — the franchise holder for the consortium of LCS Group of Companies and TierOne Communications International, Inc. (LCS-TierOne) — and Philippine Telegraph and Telephone Corp. (PT&T) were disqualified for lack of required documents.
LCS-TierOne was not able to comply with the required “performance security” commitment worth P700 million, while PT&T did not have a certification from the National Telecommunications Commission (NTC) proving its 10-year national scale experience.
Once the selection committee completes its review of both companies’ appeals next week, it may then recommend to the NTC en banc the final winner. The NTC en banc will declare the winner of the auction, who will then be given 90 days to complete submission of its business and roll-out plans, among other requirements.
It will get a certificate of public convenience and necessity (CPCN) valid for 15 years or the length of the franchise of a bidder, whichever is shorter; and radio frequency bands of 700 megahertz (MHz), 2100 MHz, 2000 MHz, 2.5 gigahertz (GHz), 3.3 GHz and 3.5 GHz.
In Wednesday’s auction, LCS-TierOne called out the participation of Mislatel in the winning consortium, saying the company has a live contract with a member of its own group, DigiPhil Technology. “We are in consideration of P10 million that is a limitation in the use of the franchise in the sense that Mislatel is not allowed to have its franchise… used by somebody else without a prior official consent of DigiPhil. DigiPhil, in other words, has the right of first refusal,” LCS-TierOne legal counsel Raoul C. Creencia told reporters.
He said the company will file a case at either the Pasig or Makati regional trial court against Mislatel in the coming days.
Representatives of two other firms showed up at the NTC office — Now Telecom Co. Inc. and Converge ICT Solutions, Inc. — but decided not to submit their documents.
Now Telecom said it was advised by its legal team to not to participate as such action may affect its petition for injunction against the NTC, which it brought up to the appellate court on Wednesday. “Our potential filing for the new major player bidding will potentially affect the case and we were advised by our legal counsels not to submit our bidding documents at the moment,” Now Corp. investor relations officer Juan Miguel M. Honorico-Lopez told reporters.
Converge ICT, on the other hand, argued that the auction did not provide a level playing field, since bidders were imposed requirements which major telcos PLDT, Inc. and Globe Telecom, Inc. did not have to comply with in order to operate. “What is demanded from the bidders today were not asked from the dominant players before,” Converge ICT Special Assistant to the President Aristoteles Z. Elivaña told reporters.
More companies had been expected to participate in the bidding as 10 groups bought selection documents. The others were Villar-led Streamtech Systems Technologies, Inc.; AMA Telecommunication Corp.; Norway’s Telenor Group and Austria’s Mobiltel Holding GmbH.
Information and Communications Technology Acting Secretary Eliseo M. Rio, Jr. said the bidding turned out well.
“We think NTC did a very good job… The thing that I could have been more happy with kung sana marami pa ‘yung nag-bid [is if there wesre more bidders],” he told reporters.
The search for a new major telco player came at the order of President Rodrigo R. Duterte, who wants a challenger to the duopoly of PLDT and Globe.
PLDT, which currently has a mobile subscriber base of about 59 million, declined to comment on the procedure. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.
Globe said in a statement it welcomed a new challenger, but hopes the government would keep supporting it in serving its 67-million mobile subscriber base.

Q3 farm output weighs on overall economic growth with first drop in seven quarters

THE COUNTRY’s agricultural production fell for the first time in seven quarters in the three months to September amid the onslaught of four storms, according to data released on Wednesday by the Philippine Statistics Authority (PSA), showing the sector weighed on overall economic growth for the same period which will be reported Thursday.
Farm output sank 0.83% in value terms last quarter, a reversal from a three-quarter-low 2.32% growth a year ago and the first contraction since the 1.11% drop recorded in 2016’s fourth quarter. Third-quarter farm data brought growth in the nine months to September to a nearly flat 0.15%, compared to 4.64% in last year’s comparable period and the 2.5-3.5% annual target for the sector under the 2017-2022 Philippine Development Plan.
Agriculture production has historically contributed about a tenth to gross domestic product (GDP) and accounted for a fourth of employed persons.
Q2 GDP ESTIMATE REVISED
The PSA on Wednesday also upgraded second-quarter GDP growth to 6.2% from six percent previously, on upward revisions to real estate, renting and business activity, mining and quarrying, and “other services”.
The updated second-quarter growth pushed up last semester’s average economic expansion slightly to 6.4% from 6.3% previously, but that still compared to 6.6% a year ago.
“We expect GDP growth in Q3 to be higher than the first half revised growth of 6.4% — at least 6.5% — due to the 30% growth in NG (national government) expenditures and the 8.8% real growth in manufacturing production. We also expect growth to be investment-led due to the 47% rise in NG capital outlays,” Finance Undersecretary Gil S. Beltran told reporters in a mobile phone message.
CROPS
Production of crops, which contributed 45.58% to total value of agricultural output in the third quarter, fell 3.64% compared to a year-ago 5.24% increase, fueling a 1.38% drop as of September compared to an 8.38% hike in 2017’s comparable nine months.
Weighing particularly on crop and overall farm output was a drop in production of palay, which made the biggest contribution among individual farm segments at 16.17% of total value. Palay production fell by 5.7% to 3.196 million metric tons (MMT) last quarter from 3.39 MMT a year ago. That was bigger than the 1.97% drop projected as of August on a smaller harvest area. The nine months to September saw production of this staple slip by 0.41% to 11.909 MMT from 11.959 MMT a year ago.
“This was attributed to damage brought by typhoons ‘Henry’, ‘Inday’, ‘Josie’ and ‘Ompong’ in the northern Luzon and the delayed planting due to the ongoing rehabilitation of irrigation facilities and late release of irrigation water in Cagayan Valley and CALABARZON (Cavite-Laguna-Batangas-Rizal-Quezon region). There were also reports of movement of planting caused by the late occurrence of rainfall in some part of MIMAROPA (Occidental and Oriental Mindoro, Marinduque, Romblon and Palawan) region,” the report read.
Typhoon Mangkhut, locally called Ompong, alone that ravaged northern and central Luzon’s crop fields on Sept. 15, wreaked P26.77 billion and P7.161 billion in farm and infrastructure damage, respectively, according to Oct. 6 government estimates.
Production of corn, which had the fourth-biggest contribution to total farm output value at 7.58%, saw volume drop 14.83% to 2.205 MMT last quarter from 2.589 MMT a year ago, compared to a 2.74% fall in July-September 2017. That compared to a 15.75% drop expected for the quarter in August. The PSA noted that, besides damage from last quarter’s four storms, corn output fell on delayed planting due to late rains in Cagayan Valley, which also saw a shift from this crop to banana, pineapple, ginger, eggplant, sugarcane and tobacco due to these alternatives’ higher buying prices. Production of this grain dropped 5.08% to 5.966 MMT year to date from 6.286 MMT in 2017’s comparable nine months.
OTHER SECTORS
Production of livestock, which contributed 18.89% to total farm output value, grew 2.15% last quarter compared to just 0.72% a year ago, fueling a two percent year-to-date expansion against 0.81% the past year. Most items under this category increased, except for carabao output which fell 1.63%. Hog production, which made the second-biggest contribution to the total after palay at 15.87%, grew 2.55% to 541,030 MT, against a 0.91% increase the past year.
Growth of poultry output, which contributed 18.44% to the entire sector’s value, picked up to 5.45% last quarter against 3.42% a year ago, driving year-to-date increase to 5.31% against 4.56% in 2017’s comparable nine months. “Output gains were noted for chicken, chicken eggs and duck eggs,” the report read. Production of chicken alone, which had the third-biggest contribution to total farm production value at 13.95%, grew 4.31% to 428,770 MT, against the year-ago 2.52%.
Production of fisheries, which contributed 17.08% to total agriculture output value, slipped by 2.64% compared to the year-ago 4.24% drop. Year-to-date production, however, fell by a bigger 2.21% from a 1.96% drop in January-September last year. “Production of milkfish, tiger prawn, roundscad and yellowfin tuna went down while tilapia, skipjack and seaweed posted output gains,” according to the report.
PRICES BETTER OVERALL
On the average, farmers got a better deal for their produce, with farmgate prices rising 7.71% compared to 3.61% a year ago.
Year-to-date, such prices went up 6.85% compared to 4.08% in January-September last year.
By sector, last quarter saw crop farmgate prices rise by 5.68% (compared to 1.34% a year ago), with rice going up 16.86% (compared to 0.76% a year ago) and corn surging 22.44% (turning around from the year-ago 3.98% drop).
Livestock farmgate prices rose by a slower 6.52% compared to the year-ago 13.81%, with the increase in hog prices alone slowing to 5.96% from 15.46%. Year-to-date, livestock farmgate prices grew 9.24% compared to an 11.24% increase in the nine months to September last year.
Prices of poultry recovered with a 13.03% third-quarter surge compared to the past year’s 7.67% drop, fueling a 4.85% year-to-date increase compared to a 1.79% fall in January-September 2017. Prices of chicken alone went up by 19.14% last quarter, turning around from the past year’s 10.8% drop.
Finally, the increase in fisheries prices picked up to 15.26% last quarter from 8.4% a year ago, driving the year-to-date rise to 10.33% compared to 7.97% in the nine months to September last year. — with R. J. N. Ignacio

Goods trade gap widens further in September

By Janina C. Lim
Reporter
THE CONTINUING surge of merchandise imports and a drop in products sold abroad pushed the country’s trade in goods deficit further towards the $4-billion mark in September, the Philippine Statistics Authority (PSA) said on Wednesday on the eve of its third-quarter gross domestic product (GDP) report.
Foreign sales of Philippine goods that month declined 2.6% to $5.83 billion from $5.99 billion in September 2017. The drop capped three straight months of increases. Year to date, merchandise exports were down 2.08% to $50.755 billion against the government’s two-percent full-year growth target for 2018..
Merchandise imports in September surged 26.1% to $9.75 billion from the adjusted $7.74 billion in the same month last year, taking year-to-date total to $80.665 billion, 16.271% up year-on-year against a nine percent official growth target for 2018.
September flows yielded a $3.93-billion trade deficit that was more than double the year-ago $1.75-billion gap, marking the sixth straight month the deficit hovered past the $3 billion mark.
Year-to-date trade deficit widened by 70.492% to $29.91 billion from the $17.543 billion recorded in last year’s comparable nine months.
Philippine trade year-on-year performance (September, 2018)
ELECTRONICS SHIPMENTS
Electronics as a category was both the country’s biggest merchandise exports and imports.
This group, which accounted for 58.6% of total exported goods in September, saw outbound sales grow 4.17% annually to $3.414 billion that month and by 5.743%to $28.46 billion year-to-date.
September also saw electronic products account for 24.935% of total inbound goods at $2.432 billion, 29.48% from a year ago. This item grew 20.532% to $20,818 billion year-to-date.
ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa noted that the September trade gap is the “widest in recorded history” and “worse than expected,” notwithstanding weakness of the peso which averaged P53.94 against the greenback September. “Exports continue to underperform, posting a two percent contraction YTD after the -2.6% in September. In turn, the weaker currency may have contributed to imported inflation as now more expensive import costs are passed on to the consumer,” Mr. Mapa said in a note on Wednesday.
The National Economic and Development Authority (NEDA) attributed imports’ surge to growing purchases of capital goods which accounted for 30.2% or $2.95 billion of the import bill in September, sustaining a double-digit increase for six straight months. The segment went up 25.4% from $2.35 billion from the same month last year. Year-to-date, imported capital goods went up to $26.24 billion from $22.55 billion. “The growth in import of capital goods could indicate that firms are making long-term investments,” NEDA quoted its director-general, Socioeconomic Planning Secretary Ernesto M. Pernia, as saying in a statement on Wednesday.
Continued strong acquisition of capital goods and raw materials will drive overall imports “to remain elevated until 2019,” Mr. Pernia said.
NEDA attributed exports’ drop to “weak global growth”, saying: “Downward adjustments in economic growth forecasts signal that global growth may have already peaked. Global growth is seen to remain on the positive but to decelerate and be uneven across countries.”
September saw sales of manufactured goods account for 85% of exports at $4.95 billion, slipping 1.9% from $5.05 billion a year ago.
Outbound shipments for mineral products slid 30.8% to $263.27 million from $380.39 million in the same comparative months.
Rizal Commercial Banking Corp. Economist Michael L. Ricafort expects merchandise trade deficit to breach the $4 billion mark within the year amid government’s aggressive infrastructure spending as well as an anticipated boost in foreign direct investments. “There is a chance for trade deficit to post a new monthly record high beyond $4 billion if the government’s infrastructure spending, especially on mega infrastructure projects (Build Build Build) continues to accelerate in the coming months and if the growth in real estate and construction continues to sustain, leading to higher imports of steel/metals and other construction-/real estate-related inputs,” Mr. Ricafort said in an e-mail, noting that September marked the second straight month that imports posted a record high.
“Continued growth in FDIs could also lead to wider trade deficits due to the need to import more capital equipment and other imported inputs needed to complete production facilities.”
For ING Bank’s Mr. Mapa, “the current account will likely remain in deficit with the Philippine peso looking to structural flows such as remittances ahead of the holiday season and the capital and financial account for support.”

Philippine trade year-on-year performance (September 2018)

THE CONTINUING surge of merchandise imports and drop in products sold abroad pushed the country’s trade in goods deficit further towards the $4-billion mark in September, the Philippine Statistics Authority (PSA) said on Wednesday on the eve of its third-quarter gross domestic product (GDP) report. Read the full story.
Philippine trade year-on-year performance (September, 2018)

SM Investments nets P26B in 9 months

SM Investments Corp. posted a net income of P26.2 billion in the first nine months of 2018.

THE holding firm of country’s richest man Henry Sy, Sr. expanded its earnings by 10% in the first nine months of 2018, as its property, banking, and retail units continued to deliver strong results.
In a statement issued Tuesday, SM Investments Corp. (SMIC) posted a net income of P26.2 billion in the nine months ending September, on the back of a 12% growth in revenues to P307.4 billion.
“The results of the first nine months have been reassuring with the resilient performance of property, banking and retail. Our financial results reflect the ongoing strength of consumer sentiment, even as we continue to monitor inflationary pressures,” SMIC President Frederic C. DyBuncio was quoted as saying in a statement.
SMIC’s property business provided 43% of the company’s total revenues, while banks and retail accounted for 36% and 21%, respectively.
The listed conglomerate’s property unit through SM Prime Holdings, Inc. generated a net income of P23.4 billion in the nine-month period, 17% higher year-on-year. This came after a 15% uptick in revenues to P74.6 billion.
The shopping mall unit boosted SM Prime’s performance, as its revenues rose 12% to P43.3 billion, accounting for 58% of consolidated revenues. Same-mall sales growth stood at eight percent, pushing mall rental revenues 12% higher to P36.8 billion.
Meanwhile, the residential group under SM Development Corp. saw its revenues increase by 23% to P25.3 billion. The unit further recorded a 25% rise in reservation sales to P52.8 billion.
For the banking unit, BDO Unibank, Inc. exhibited a six percent profit jump to P21.5 billion. Gross customer loans reached P2 trillion, higher by 17% from a year ago, while total deposits climbed 12% to P2.3 trillion. Net interest income accordingly went up by a fifth to P71.5 billion.
The country’s largest lender expects to hit a net income of P31 billion for full-year 2018.
SMIC’s other bank, China Banking Corp., has yet to release its financial results for the third quarter.
The retail unit through SM Retail, Inc. reported P227 billion in revenues for the period, 11% higher year-on-year. Bottomline growth was slower at 3% to P7.9 billion.
SM Retail consists of both food and non-food stores, ending September with a total of 2,212 stores consisting of 62 The SM Stores, 1,315 specialty retail stores, 56 SM Supermarkets, 50 SM Hypermarkets, 194 Savemore, 52 WalterMart, and 483 Alfamart stores.
The group opened three stores for The SM Store, located inside its newly opened malls in Urdaneta, Telabastagan, and Legazpi. For the food retail group, SMIC added 13 stores for Savemore, four SM Supermarkets, three SM Hypermarkets, and six Waltermart. Its convenience store chain also opened 135 Alfamart outlets.
“SM’s results are in line with our expectations but it was below consensus forecast,” according to COL Financial Group, Inc. Research Analyst Richard Laneda.
Regina Capital Development Corp. Managing Director Luis A. Limlingan also noted that SMIC’s earnings were in line with targets, saying in a mobile message that “net income was up by double digits boosted by the performance of property and retail segments.”
Shares in SMIC shed 4.35% or P40 to close at P880 each at the stock exchange on Wednesday. — Arra B. Francia

AEV posts P7.2-billion net income in 3rd quarter

By Victor V. Saulon Sub-editor
ABOITIZ Equity Ventures, Inc. (AEV) posted a consolidated third-quarter net income of P7.2 billion, higher by 28% from a year ago in part as the diversified holding company recorded one-off foreign exchange gains to reverse losses in the same period last year.
In a disclosure to the stock exchange, AEV placed the forex gains at P60 million, from last year’s non-recurring losses of P720 million, consisting of net unrealized foreign exchange losses on the restatement of consolidated dollar-denominated debts. It also cited money market placements and pre-termination costs on the refinancing of a subsidiary’s debt as among the one-off items.
Excluding the one-time gains, AEV’s core net income during the quarter was higher by 13% at P7.2 billion.
Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) rose by 14% to P17.6 billion from P15.4 billion recorded during the same period last year.
For the nine months to September, net income reached P17.3 billion, up 9% from P15.9 billion previously, as the firm trimmed its non-recurring forex losses to P407 million from P1.2 billion a year ago. These items represented AEV’s net unrealized foreign exchange losses and pretermination costs on debt refinancing.
Core net income for the nine-month period hit P17.7 billion, up 4% from P17.1 billion a year ago. Consolidated EBITDA at P45.5 billion was 10% higher than the P41.4 billion recorded in the same period last year.
Among AEV’s strategic businesses, the power unit accounted for 72% of the total income contributions, followed by financial services with 17%, food with 8%, real estate with 2% and infrastructure with 1%.
ABOITIZPOWER
Aboitiz Power Corp. Chief Operating Officer Emmanuel V. Rubio said the subsidiary’s “strong” financial showing as of September “was driven by the continuously increasing demand for reliable, affordable, and sustainable power supply.”
AboitizPower’s income contribution to AEV rose by 6% to P12.8 billion from P12.1 billion for the nine-month period.
For the third quarter, the energy company posted a net income of P7.6 billion, 25% higher than the same period in 2017. This brought its nine-month net income to P16.7 billion, up 6% from a year ago.
Among AboitizPower’s business segments, power generation and retail supply contributed P15.3 billion, up 4%, and accounted for 82% of its contribution to the parent firm.
Consolidated EBITDA rose by 11% to P33 billion primarily due to income contribution of Pagbilao Energy Corp. and Hedcor Bukidnon, Inc. Capacity sold during the review period was almost flat at 3,162 megawatts (MW) from 3,158 MW.
The power distribution business accounted for 18% of the income contributions from AboitizPower’s business segments and recorded an income share of P3.3 billion, which was higher by 8% year on year.
Next to AboitizPower, AEV’s banking and financial services business Union Bank of the Philippines was another big contributor, although its share declined by 5% to P3 billion from P3.1 billion a year ago.
On a stand-alone basis, UnionBank and its subsidiaries recorded net income of P6.1 billion, down 5% from P6.4 billion previously as a result of the lower contributions from CitySavings Bank.
AEV’s non-listed food subsidiaries Pilmico Foods Corp., Pilmico International Pte. Ltd., and Gold Coin Management Holdings Ltd. reported a combined net income of P1.5 billion, 26% higher than the P1.2 billion recorded last year.
Its local feeds business recorded a net income of P475 million, down 8%, due to the increased costs of feeds ingredients and the change in the feeds sales mix to low-margin lines.
The flour business segment earned P276 million, 30% higher than in the same period last year because of foreign exchange gains from short-term dollar investments and higher interest income.
Pilmico International reported net income of P252 million, a 415% jump from last year, due to the fresh contribution of Gold Coin Management, which is an expansion in one of its core feed milling businesses. The new contributor mitigated the effects of higher input costs to Pilmico’s international animal feeds and aqua feeds businesses.
AEV’s real estate subsidiary Aboitiz Land, Inc. reported a 19% rise net income to P403 million with the growth in top-line contributions from the industrial, residential and commercial business units. The non-listed unit also maintained operating expenses at levels similar to those in 2017.
For the infrastructure group, Republic Cement and Building Materials, Inc.’s income contribution to AEV amounted to P221 million, a decrease of 12%. The cement firm said the slight improvement in prices due to government infrastructure spending and stable private sector demand was offset by significant increases in fuel and power costs.
Luis A. Limlingan, business development head at Regina Capital Development Corp., said AEV’s performance was below his firm’s estimates.
“Despite improvements in power and food, weaker quarterly earnings from banking and infra unit still weighed on bottom line to miss estimate,” he said.
He said AboitizPower’s performance met expectations as non-recurring losses were pared within the quarter, on top of stable generation and distribution income. But he said, the company’s year-to-date showing might still be weaker from the slide in the first half of the year.
On Wednesday, shares in AEV traded lower by 2.11% to close at P46.40. AboitizPower was also weaker by 2.35% at P33.20 each.

Emperador 9-month earnings up 18%

EMPERADOR, Inc. reported its earnings breached the P5 billion mark in the first nine months of the year, amid strong growth of its premium Scotch whisky business.
In a statement, Emperador said its net income jumped 18% to P5.2 billion during the January to September period, as revenues increased by 11% to P30.5 billion.
“Our performance is brought about by the sustained growth in international expansion. The premium Scotch whisky business continues to show robust growth led by The Dalmore single malt whisky and innovations. The brandy business continues to perform well as well with greater penetration into North and Latin America. We are organically global. Our products are available in more than 100 countries and more than 350 cities in the world,” Emperador President and CEO Winston S. Co was quoted as saying.
Mr. Co said the company is planning to begin exports of Emperador Hotshot to the United States where there is cinnamon whiskey is growing in popularity.
Emperador has been aggressive in expanding its brands such as Emperador Brandy, Fundador Spanish Brandy de Jerez and The Dalmore in the overseas market.
“We have fortified our brandy portfolio to sustain our No. 1 position in Spain, Mexico, Colombia, and the Philippines. We have introduced a super-premium Brandy de Jerez in Fundador Supremo through travel retail channel in Europe and Asia like Hong Kong, Beijing, Shanghai, Korea, etc. The Fundador Supremo is now available in the Philippines with the 18 year-old Oloroso Sherry Cask retailing at P12,800 a bottle,” Emperador Spain Managing Director Jorge Domecq said.
In the Philippines, Mr. Co said the company recently launched The BaR Gin, which is infused with botanicals from Andalucian region in southern Spain.
Emperador owns Emperador Distillers, Inc., Scotch whisky maker Whyte and Mackay Group, and Bodegas Fundador in Spain.

Vista Land profits grow by 16% in Q3

VISTA LAND & Lifescapes, Inc. (VLL) grew its attributable profit by 16% in the third quarter of 2018, boosted by the double-digit increase in both its housing and rental businesses.
In a regulatory filing, the Villar-led property developer posted a net income attributable to the parent of P2.99 billion, better than the previous year’s P2.57 billion in the same period. Revenues stood at P9.91 billion, 15% higher year-on-year.
This pushed the listed firm’s nine-month attributable profit 16% higher to P8.09 billion, on the back of a 16% uptick in revenues to P31.05 billion.
“We are very pleased with our nine-month performance and we are well poised to achieve our revised growth targets for the year,” VLL Chairman Manuel B. Villar, Jr. said in a statement.
The company delivered a 16% increase in real estate revenues to P20.8 billion for the nine-month period, which accounted for 83% of revenues. Sales from the Camella brand contributed bulk of real estate revenues at 80%, followed by Vista Residences, Crown Asia, and Brittany.
Leasing income meanwhile provided the remaining 17% of revenues, rising 19% to P5.2 billion.
VLL’s commercial space hit 1.16 million square meters across 26 malls, 50 commercial centers, and seven offices by end-September.
Reservation sales went up by 17% to P57 billion, which the company noted is faster than its 12% sales growth guidance for the entire year.
“We’re cautiously optimistic about Q4. Based on Q3 we still see the trend continue. Our financial targets, we will track that because we are realizing revenues now that were sales before,” VLL President and Chief Executive Officer Manuel Paolo A. Villar said in a press briefing in Makati on Wednesday.
The company has already spent P34.9 billion in capital expenditures from January to September, from its P50-billion budget for the year.
VLL plans to launch more than P10 billion worth of residential projects in the fourth quarter, in addition to the P38 billion it unveiled in the first nine months.
For its leasing portfolio, the company looks to add another 240,000 sq.m. to its GFA in the final quarter, in order to hit its target of 1.4 million sq.m. this year.
VLL is expecting a 15-17% growth in earnings this year, as well as a 15-17% growth in reservation sales.
Shares in VLL dropped by 1.14% or six centavos to close at P5.20 each at the stock exchange on Wednesday. — Arra B. Francia

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