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Five disruptive global retail trends

KPMG, one of the world’s biggest professional services firms, argues that disruption — which is often portrayed as something “that is coming” — is already being felt in the global retail industry.

“In reality, we are already disrupted. The new retail world we have been promised is here.”

In a report published last March, the firm compiled a list of five trends impacting the industry. The first is that customer experience is more important than ever.

“Successful retailing in 2018 comes down to obsessing about customer experience. Essential to achieving this is digital and physical touchpoints working together seamlessly,” KPMG said.

To devise new retail models, retailers try to make sense of their share of consumer spending, and how their customers search, shop and buy. They are reinventing how they do their business — whether by having a showroom or a strong presence in e-commerce.

Physical stores, contrary to popular perception, are far from oblivion. “Put simply, stores that are doing well offer a customer experience that meets or exceeds customer expectations,” KPMG said. “In summary, customers will shop where they enjoy their experience, this could be on a single channel or a combination of channels.”

The next trend the firm identified is the growing clout of artificial intelligence or AI. This year, adoption of AI will continue to rise, and chatbots are taking the lead, the firm said.

These bots, used for handling customer service queries and recommending intelligent  purchases, will only become even more common due to the increasing ease of their deployment, instant availability and improved quality.

A significant amount of data, the firm said, is now in the hands of retailers that they can harness to power AI and deliver experiences that are personalized, customized and localized to customers.

“Retailers using AI to its fullest potential will be able to influence purchases in the moment and anticipate future purchases, guiding shoppers toward the right products in a regular and highly personalized manner,” KPMG said.

A trend that will continue, according to the firm, is the rise of the conscious customer. “Customers are demanding transparency as they take an increased interest in the ethical practices of the brands they buy from. Furthermore, customers today who are more tech-savvy, have a much keener eye for authenticity versus marketing speak.”

Customers today can tell what is authentic from what is intended to solely drive sales. And the judgements they make about what to buy and where to shop are informed by values, in the belief that their purchase habits impact the world.

KPMG said that winning over customers today requires standing up for something and reflecting that message consistently throughout the entire business from senior leadership to front-line staff.

The fourth trend, according to the firm, has to do with evolution of the new retail world. “As more retailers adapt to the changing expectations of customers, we are finally seeing the new retail world evolve. This is the consequence of significant behavioral shifts over the last few years,” the firm said.

Customers now have the power — they’re in the driver’s seat, and new technologies have put them there. Apps — from Snapchat to WhatsApp — indicate that the world is moving toward a reality in which everything happens in real time.

“The natural outcome is that people want that instant gratification. This has had a deep impact on customer expectation,” KPMG said.

The fifth and final trend involves “a tale of two hemispheres.” The firm noted that traditionally, companies in China borrow products and business models from the West and adapt them to their local markets. Now, the Eastern landscape is being shaped not by ideas and inventions derived from the West but by homegrown platform businesses.

“China has developed a unique innovation ecosystem that has resulted in a revolutionary approach on a mass scale,” KPMG said. “It is different from that in the West, and it is impacting both emerging and developed economies.”

The firm added: “China’s innovative tech companies are dominating the local market and it may just be a matter of time before they themselves move West.”

Executive, House break budget deadlock

TALKS in Malacañan Palace last Tuesday between President Rodrigo R. Duterte and Speaker Gloria M. Arroyo broke the deadlock over the Executive’s proposed national budget for next year, with a leader in the House of Representatives saying the chamber will likely resume deliberations and should be able to meet the deadline for the spending plan’s approval.
House leaders had questioned the reduction of the national budget to P3.757 trillion in 2019 — a mid-term election year — from 2018’s P3.767 trillion, fearing this would leave many local development projects unfunded. The Budget department had attributed the reduction to a shift to a “cash-based” system, which includes only projects that can be auctioned off and awarded within 2019, from one that is “obligation-based” which provides a two-year horizon for auctions and awards. The shift — which takes into consideration implementing departments and agencies’ disbursement limits — is a key step the Duterte administration has taken to end years of state underspending that has capped economic growth.
“We understand that a cash budgeting system from an economic manager standpoint; this is a step forward. But speedy implementation in one year’s time, we have to balance it,” House Majority Leader Rolando G. Andaya, Jr. said in a press briefing on Wednesday.
“We’d make adjustments inside. We can do that. There are also suggestions that there’ll be some supplemental budget.”
House Appropriations committee Chairman Karlo Alexei B. Nograles said in an interview over ABS-CBN News Channel that he did not oppose the cash-based system per se but wanted to give local governments time to adjust to a smaller budget, adding that implementation of the new framework should be moved to 2020 — the year after mid-term elections.
“I think I can suggest to the Chairman (Nograles) that we now continue the budget hearing. Clear naman ‘yung instructions ng Presidente (The President’s instructions were clear). So, over the (Aug. 16-27) break we will resume,” Mr. Andaya said.
Asked whether the chamber can approve the budget by its original target date on Nov. 30, Mr. Andaya replied: “Oo, oo, walang problema (Yes, yes, that’s not a problem).”
According to the Camarines Sur solon, a supplemental budget may have to be legislated to fund the implementation of the Bangsamoro Organic Law (BOL) and the bigger internal revenue allotment for local governments ordered by the Supreme Court. “The DBM (Department of Budget and Management) admitted that the budget for the implementation of the BOL is not yet in the present budget… [and neither is the] ‘yung decision ng Supreme Court regarding… internal revenue allotment,” Mr. Andaya said.
At the same time, he clarified that the chamber “cannot have a supplemental budget na walang kaakibat na pondong pagkukunan (without a corresponding funding source),” adding that such a bill will have to be filed in conjunction with one of the succeeding tax reform packages.
‘HYBRID’ BUDGET PROVISIONS
Also among the agreements reached at Wednesday’s top-level meeting was “a compromise to extend to one year and six months” allocations for select development imperatives.
Explaining such a “hybrid” scheme that straddles the cash- and obligation-based systems, Mr. Andaya cited the calamity fund as an example. “For example, the calamity fund, [can’t be spent] by the end of the year [when] wala pa naman bagyong dumadating (there is no typhoon yet). So you have to wait. That’s a hybrid,” he said.
In a briefing in Malacañang on Wednesday, Presidential Spokesperson Herminio L. Roque, Jr. said Mr. Duterte was to meet with Budget Secretary Benjamin E. Diokno and Finance Sec. Carlos G. Dominguez III to see where they could compromise with the House.
‘FOR AN ELECTION YEAR’
Earlier Wednesday, Mr. Diokno told reporters that lawmakers he met with on Tuesday morning had pushed for a bigger 2019 national budget.
The Senate decided in a caucus late that afternoon, however, to back the Executive’s cash-based scheme and to continue holding parallel public budget hearings, even as the chamber would have to wait for the 2019 spending plan to secure House approval — as required by law — before giving its green light.
“Their desire really is to have the budget increased. They said for an election year, masyadong tight ang budget,” Mr. Diokno recalled.
“Maybe [for an] election year they want more projects. That’s natural: if you’re a congressman you want to impress… your constituents, you really need more projects.”
Sought for comment, Ramon C. Casiple, executive director of the Institute for Political and Electoral Reform, said in a mobile message: “It’s a question of access to funds in an election year. Cash-based budgeting favors government spending but disfavors electoral spending.” — Charmaine A. Tadalan and Elijah Joseph C. Tubayan

Overseas Filipinos’ cash remittances (June 2018)

CASH remittances slipped to a two-month low in June due to smaller flows from the Middle East, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday. Read the full story.
Overseas Filipinos’ cash remittances (June 2018)

Cash remittances up in 1st half despite June fall amid smaller Mideast flows

OWWA / ofw
AFP

By Melissa Luz T. Lopez, Senior Reporter
CASH remittances slipped to a two-month low in June due to smaller flows from the Middle East, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.
Money sent home by overseas Filipino workers (OFWs) totalled $2.357 billion that month, down from May’s $2.469-billion inflows and 4.5% lower than the $2.467 billion received in June 2017.
This is the smallest amount of remittances seen since April’s $2.347 billion and settled lower than market expectations, according to central bank data.
ING Bank had expected remittances to rise by 5.3% in June, versus a consensus forecast of 5.4%.
The BSP said cash remittances declined on the back of smaller amounts sent by Filipinos working in the United Arab Emirates (UAE), Saudi Arabia and Kuwait.
Overseas Filipinos’ cash remittances (June 2018)
“The overseas Filipino workers repatriation program of the government may have partly affected the remittance flows for the month,” the central bank said in a statement, noting that a total of 4,149 OFWs have been brought home from the three countries during the first two months of 2018.
In February, President Rodrigo R. Duterte asked Filipinos in Kuwait to return home amid reports of abuse, and ordered a deployment ban soon after. The ban was lifted in May following an agreement signed by the two nations.
June’s inflows brought last semester’s total to $14.179 billion, 2.7% more than the $13.813 billion logged in last year’s comparable six months. That compares to the central bank’s forecast of a four percent growth in remittances for the entire 2018.
Cash transfers from OFWs deepens pockets of their families back home, which in turn helps fuel overall economic growth. Household spending in proportion to national output steadied at about 56% last semester from a year ago, though growth of this segment slowed to 5.7% compared to the year-ago 5.9%, according to latest available data which the Philippine Statistics Authority released on Thursday last week.
Overall economic growth slowed to six percent last quarter, compared to a downward-revised 6.6% climb in the first three months.
Remittances also act as a counterweight to growing import payments that have been driving the country’s current account balance deeper into deficit, in turn making the peso weaker against the dollar.
The BSP expects remittances to touch a new all-time high and grow by another four percent this year, coming from the all-time high of $28.06 billion in 2017.
Preliminary data from the Philippine Overseas Employment Administration showed that OFW deployment has eased, with land-based workers dropping by 3.28% and those working at sea falling by 14.6%.
By country, the United States remained the biggest source of remittances last semester. It was followed by Saudi Arabia, Singapore, the United Kingdom, UAE, Japan, Qatar, Germany, Hong Kong and Canada, according to the BSP, noting that these countries accounted for more than 79% of total cash remittances in 2018’s first six months.
Sought for comment, Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said “[t]he lower-than-expected 4.5% remittance [drop] may be temporary because we have seen this as well last year. We expect it to recover in the coming months.”
In 2017, remittances posted annualized declines in April (5.9%) and September (8.3%) but grew in the other 10 months.
Mr. Asuncion said he had expected a 5.4% growth in remittance inflows to around $2.6 billion for June.
Still, he said the softer increase in remittances had “minimal” impact on household spending, which eased to 5.6% during the second quarter from the 5.7% pace logged in January-March at a time of rising commodity prices. Such consumption had grown by faster 5.9% and six percent in last year’s first and second quarters, respectively.

Central bank sticks to outlook of slower inflation by Q4

INFLATION should peak in the next two months before slowing closer to target, the country’s central bank chief said, noting that tax-related price pressures have been “tapering off.”
Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. said the biggest price spikes will be seen in August or September, before settling within the 2-4% target band by next year.
“Latest baseline forecasts have shifted higher over the policy horizon, suggesting that inflation will remain elevated in 2018 with the peak occurring sometime in the third quarter, and will revert to the inflation target of 2-4% in 2019,” Mr. Espenilla said in a speech before the Rotary Club of Makati on Tuesday.
Inflation has averaged 4.5% as of end-July as it touched a multiyear high of 5.7% last month.
In response, the central bank fired off its strongest response in a decade as it raised benchmark rates by 50 basis points (bp) in its meeting on Thursday last week, following hikes of 25 bp each in May and June.
Monetary authorities have long conceded to missing their inflation target this year, citing persistent “supply-side” pressures that are beyond the BSP’s purview. Much of the blame has been pinned on rising global oil prices, thinning buffer stocks of cheap rice, as well as the impact of the first of up to five planned tax reforms which imposed additional levies on fuel, cigarettes, alcohol and sugary drinks starting Jan. 1.
“In a supply shock episode, central banks would typically not react, as these historically tend to be transitory or short-lived in nature, but remain vigilant and undertake action against incipient signs of second-round effects,” Mr. Espenilla said.
However, Mr. Espenilla said the central bank has been seeing signs that the price spikes are becoming less fueled by tax reform-related adjustments.
“We also see the tapering off of month-on-month changes of CPI items related to excise tax adjustment in the first five months. The month-on-month changes for electricity, tobacco and sweetened beverages are also slowly tapering off as we pass seven months of 2018,” the BSP chief said.
“This supports our view that the impact of excise tax adjustments are transitory.”
The central bank sees headlline inflation averaging 4.9% this year.
Mr. Espenilla explained that the BSP continues to see risks to inflation in the face of impending wage increases, pending petitions for higher transport fares and utility rates, a faster-than-expected rate tightening in advanced economies, and a further increase in rice prices.
He added that the three rate hikes announced so far this year — cumulatively 100bps — signal the BSP’s “strong commitment to ensuring macroeconomic stability,” noting that these steps “will help reduce further risks to inflation” without stunting overall growth.
Robust domestic activity shows that the economy can absorb rising interest rates, even as growth eased to 6.3% last semester against a 7-8% full-year goal, from 6.6% in 2017’s first six months.
Mr. Espenilla noted that “non-monetary intervention” like shifting to a regular tariff scheme for rice from the current import quota system — expected to slash retail prices of the staple by P7 per kilogram — should help tame inflation. The House of Representatives approved this measure earlier this week.
Jose Mario I. Cuyegkeng, senior economist at ING Bank N.V. Manila, said he expects inflation to peak at around six percent in August or September, but will likely stay above five percent for the rest of 2018.
Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said he expects third-quarter inflation to average 5.9% before easing to 5.8% from October-December.
Finance Secretary Carlos G. Dominguez III, who sits in the policy-setting Monetary Board, said the central bank “has a very good capacity to analyze economic trends.” He said in a media forum yesterday that the BSP will take “appropriate action” to respond to emerging trends in the local and global scene.
Bank analysts have noted that the central bank remained hawkish in its Aug. 9 policy statement, which they said left the door open for further rate hikes. — Melissa Luz T. Lopez

GT Capital eyes mid-single digit growth

By Arra B. Francia, Reporter
GT Capital Holdings, Inc. looks to grow its earnings in the mid-single digits for full year 2018, amid recording flat profit for the first semester after the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law dented auto sales.
In a regulatory filing, the holding firm of tycoon George S.K. Ty reported that net income attributable to equity holders of the parent dropped by 18% in the second quarter to P3.4 billion, versus the P4.1 billion it booked in the same period a year ago. Revenues for the quarter also slumped six percent to P55.7 billion.
This brought GT Capital’s attributable profit one percent lower to P7.1 billion in the first half of 2018, after revenues slipped by six percent to P101.2 billion, reflecting the slowdown in the number of units sold under Toyota Motor Philippines (TMP).
“This is attributed to the front-loading of orders late last year in anticipation of the TRAIN Law and the run-out of the previous generation Vios during the second quarter… On the other hand, our affiliates Metrobank, AXA Philippines, Metro Pacific, and TFS delivered strong results, mitigating the soft numbers from the auto sector,” GT Capital President Carmelo Maria Luza Bautista said in a statement.
The implementation of TRAIN last January directed higher excise taxes on vehicles, with those costing P600,000 and below slapped with a 4% tax, instead of the previous 2%. Taxes for cars priced between P600,000 to P1 million are now at 10%, from the previous scheme of P12,000 plus 20% of the amount in excess of P600,000.
With this, sales of Toyota vehicles dropped by 14% to 73,136 in the first half. The company said this is close to the industry’s 12% year-on-year decline to 191,495 units sold for the period, citing data from the Chamber of Automotive Manufacturers of the Philippines, Inc.
TMP’s consolidated net income stood at P4.6 billion for the first half, after revenues of P76.4 billion. Despite slower sales, the company maintained its leading market position with a share of 38%.
“We are expecting that market demand may normalize by the fourth quarter and resume its growth momentum by 2019 due to TMP’s new model launches and sufficient inventory,” Mr. Bautista said.
Meanwhile, Metropolitan Bank & Trust Company recorded a 16% increase in net income to P11 billion for the first half. The company benefited from the growth of its core business, alongside an 18% jump in its loan portfolio to P1.3 trillion.
GT Capital’s property units Federal Land, Inc. and Property Company of Friends, Inc. booked P9.7 billion in combined revenues for the first half, with a consolidated net income of P1.1 billion.
Metro Pacific Investments Corp.’s consolidated core profit went up by 10% to P8.6 billion from January to June. The infrastructure conglomerate’s performance was driven by higher investments in the power sector, continued traffic growth in its operating toll rods, and volume growth from Maynilad Water Services, Inc.
Its insurance business, Philippine AXA Life Insurance Corp., delivered a 35% profit increase to P1.3 billion.
OUTLOOK
Asked for the company’s outlook for the rest of the year, Mr. Bautista said he is looking forward to a recovery.
“Still positive growth (for 2018), but siguro single-digit. Mid single-digit. We’re expecting the bank to continue its strong performance, the insurance to (have) strong performance. We hope for some turnaround in the property side. For Toyota, depending on how fast the volume picks up,” Mr. Bautista told reporters on the sidelines of a media and analysts’ briefing in Bonifacio Global City on Wednesday.
The GT Capital executive noted that higher spending related to the upcoming elections may start as early as the fourth quarter of this year, which could boost sales for TMP.
“Election spending mag-uumpisa na yan by November and December. There’s always been a high statistical correlation between unit sales of cars and election years. There’s just more money going around, for logistics, relations… and usually the atmosphere is positive,” Mr. Bautista said.
Shares in GT Capital dropped by 4.66% or P44.50 to close at P910 each at the stock exchange on Wednesday.

Megawide profit slips 7% in Q2

MEGAWIDE Construction Corp. reported a seven percent decline in attributable profit for the second quarter of 2018, as the growth of the airport business tempered the slower performance of its construction unit.
In a regulatory filing, the listed engineering and infrastructure conglomerate said net income attributable to shareholders of the parent went down to P452.25 million from April to June, against the P487.02 million it generated in the same period a year ago.
Net earnings attributable to equity holders of parent is the net income minus the non-controlling interests.
Revenues dipped by five percent to P4.5 billion, as contract revenues — which accounted for 80% of total revenues for the quarter — slumped 12% to P3.63 billion. On a six-month basis, Megawide’s attributable profit was flat at P926.54 million. This followed a six percent decrease in revenues to P8.96 billion from the P9.5 billion it delivered in the same period a year ago.
Construction revenues for the first half went down by 11% to P7.36 billion, which the company attributed to “varying stages of construction of projects in the order book and scheduled start of construction of the new projects booked towards the end of 2017.”
Megawide booked P14.2 billion worth of new contracts in the first semester, constituting 59% of its full year guidance of P24 billion.
The private sector accounted for bulk of the new contacts at 86%, while 14% came from infrastructure projects including the engineering, procurement, and construction contract for Clark International Airport’s expansion.
“We are also continuing to boost our order book levels to ensure a more stable revenue pipeline in the next three years, at least,” Megawide Chairman and Chief Executive Officer Edgar B. Saavedra said in a statement.
Meanwhile, the airport segment’s revenues went up by 14% to P1.32 billion in the first semester, as passenger volume increased by 12%. The Mactan-Cebu International Airport (MCIA) saw 5.8 million passengers for the first half, 14% higher than the 5.1 million passengers it serviced in the same period a year ago. Of this, 67% were domestic passengers while 33% were international passengers.
The company also opened 15 new routes in the first half, 12 of which were to destinations in China such as Beijing, Guangzhou, Shenzen, Hangzhou, Chengdu, Changsa and Nanjing and additional flights to Shanghai. MCIA now has a total of 34 domestic and 24 international routes, with 26 airline partners.
“Traffic growth in Cebu will be driven to a greater extent by our visitors from China. This is an opportunity that we want to maximize,” Mr. Saavedra said, adding that Cebu provides more convenience to travelers going to tourist destinations in Visayas and Mindanao.
Shares in Megawide gained 2.73% or 50 centavos to close at P18.80 each at the Philippine Stock Exchange on Wednesday. — Arra B. Francia

Xurpas slumps to loss as revenues fall

XURPAS, INC. slumped to a net loss in the second quarter, as its revenues from its mobile consumer services business continued to fall.
In a regulatory filing, the listed mobile content provider said it posted a P61.4 million net loss attributable to equity holders of the parent during the April to June period, from a P13.82 million net income during the same period a year ago.
For the six-month period, the company registered an attributable net loss of P137.04 million, from a net profit of P108.72 million a year ago.
Income from services and sale of goods dropped by 38% year-on-year to P282.44 million in the second quarter, and by 50% to P609.46 million in the first half.
In the first half, Xurpas said its mobile consumer services segment, which includes value-added services and digital advertising revenues, plunged 78% to P187.31 million from P858.69 million a year ago. The company did not provide second quarter figures for its business segments.
“Since the first quarter of 2018, the changes in Globe’s system have affected the Group’s Mobile Consumer Services segment, particularly its Value Added Services (VAS) business. Likewise, Art of Click (AoC) has implemented a recovery plan for 2018 coming from its 2017 slowdown in revenues, however, with no significant results to date,” Xurpas said.
Enterprise revenues rose 20% to P379.42 million during the January to June period, from P316.3 million a year ago.
“The increase in revenues was mainly from custom software development, software products, and recurring business from previous clients,” Xurpas said.
Revenues from Storm Technologies jumped 27% to P42.74 million, on the back of “sustained businesses with large corporate clients and Storm’s larger employee base.”
Storm Technologies is under Xurpas’ other services segment, which provides services through a proprietary platform called Flex Benefits System. This system allows employees to customize their benefits by converting them to other benefits that can be used in a marketplace.
Xurpas said its consolidated expenses during the six-month period fell 24% to P756.27 million. — CRAG

Meralco seeks ERC provisional approval of P21-B capex program

MANILA Electric Co. (Meralco) is asking provisional approval from the Energy Regulatory Commission (ERC) for its P21-billion capital expenditure program for 2019, the biggest component of which is the spending for the expansion of its advanced metering infrastructure.
In its application, the country’s largest power distribution utility enumerated more a hundred capital spending projects with the metering system accounting for P2.38 billion, followed by P1.78 billion for its distribution transformers.
The third-biggest expenditure item for next year is P1.31 billion for overhead conductors and devices, and nearly P1.1 billion for poles, towers and fixtures. The rest of the items are valued less than a P1 billion each.
The ERC has set the hearing for Meralco’s capex application on Sept. 25, finding it sufficient in substance along with the payment of the required fees.
“Pending hearing, it is likewise prayed that a provisional authority be immediately issued authorizing [applicant Meralco) to implement its RY [regulatory year] 2019 [capital expenditure program],” the listed company said.
ERC regulates the power distribution utility within a so-called “reset period” consisting of four regulatory years. The company’s regulatory year begins on July 1 and ends on June 30 of the following year. Its fourth reset period began on July 1, 2015 and ends on June 30, 2019.
In May, Betty C. Siy-Yap, Meralco senior vice-president and chief finance officer, said that for the fourth regulatory period the company had not been able to obtain a “rate-setting” from the regulator.
For the years 2015 to 2019, Ms. Siy-Yap said the corresponding capex applied for by Meralco was at P17.7 billion, P15.4 billion, P18.8 billion and P21 billion, for a total of P72.9 billion. She said the last one was applied by the company only in April this year.
Meralco’s capex for the coming years follows the steady growth of its customer base at a compounded annual growth rate of 4.2% from 2013 to 2017. The company ended last year with a customer count of 6.327 million, up 4.8% from 6.038 million in 2016.
Peak demand within Meralco’s franchise area hit 6,973 megawatts (MW) in June 2017, up 3.3% from the previous year’s peak. Growth from 2013 to 2017 had been a compounded annual rate of 4.1%.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Victor V. Saulon

8990 Holdings triples net income in Q2

MASS HOUSING developer 8990 Holdings, Inc. tripled its net income in the second quarter of 2018, lifted by the higher number of residential units it sold for the period.
In a statement issued Wednesday, the listed property developer said net income accelerated to P1.38 billion, versus the P469.20 million it delivered in the same period a year ago. Revenues more than doubled to P3.5 billion, against the P1.45 billion it posted in the first half of 2017.
“Historically, across the real estate sector, the second quarter is usually a slow period but we have seen that this is not the case for 8990 as we continue to bring something that goes beyond just mere affordability. More importantly, we deliver value for money homes to hard working Filipinos,” 8990 Holdings President and Chief Executive Officer Willibaldo J. Uy said in a statement.
This pushed 8990 Holdings’ net income for the first half to P2.39 billion, almost double the P1.22 billion it generated in the same period a year ago. The company’s revenues likewise soared 98% to P6 billion.
The company’s mass housing segment accounted for 59% of total revenues, while medium-rise and high-rise buildings contributed the balance of 41%.
Projects in the National Capital Region contributed 32% of its revenues, followed by those in Iloilo and Bacolod that generated 19% of the total revenues.
8990 Holdings also worked on managing costs for the first semester, letting it bring down operating expenses by 2.3% to P723.56 million. This pushed margins to 39.8%, slightly above its 38% target for 2018.
“This makes me even more confident that we will hit our P11.5 billion revenue goal by the end of the year,” Mr. Uy said.
The company has recently launched the P35-billion Ortigas Extension project, which is expected to drive growth for the second half of the year. The 22-building condominium complex is 8990 Holdings’ largest project to date, offering a total of 18,993 units across mid-rise buildings with 13 to 15 floors each.
The Ortigas Extension project is similar to its Urban Deca Homes Manila development in Tondo, housing 13 mid-rise buildings with a total of 13,212 condominium units for the affordable market.
8990 Holdings’ land bank is currently at 532 hectares, which the company said is enough for the next eight to 10 years. Once developed, the total land bank is expected to generate P156 billion in sales.
Shares in 8990 Holdings went up by 0.39% or three centavos to close at P7.80 each at the Philippine Stock Exchange on Wednesday. — Arra B. Francia

Feast like a viking

RAMBLING THROUGH the lyrics of traditional drinking songs while sharing a huge plate of kräfta (crayfish) and downing a glass of beer is a unique experience to celebrate the end of the summer season (in the case of the Philippines, the dry season).
A crayfish is a small freshwater lobster that breathe through feather-like gills and are known to have blue blood like other crustaceans. It may be blue, white, but is commonly red. Swedish crayfish are dark and turn bright red when boiled.
Eating crayfish began in 16th century Sweden when King Erik XIV would farm the crustacean in the moat of Kalmar Castle. Crayfish gained popularity in the 19th century and eventually dining on crayfish became a tradition among the Nordic countries. Today it is enjoyed in summer garden parties.
While it is no longer summer in the Philippines, the Crayfish Party 2018, a project of NordCham Philippines, in partnership with Sofitel Philippine Plaza, will be held for the 6th year in a row on Sept. 8 at Sofitel’s Harbor Garden Tent.
“Today, crayfish is something [we] only eat in the month of August. It is a dish that is typically served at the end of summer. It’s a bit of a celebration of the end of the warm period as it transitions to the winter time,” NordCham Philippines Bo Lundqvist said at the launch party at Sofitel on Aug. 1.
“The crayfish itself is prepared with spices and herbs. It is served cold. [It’s] salty. It’s served with a variety of spirits and we also eat it with Nordic food,” Mr. Lundqvist said.
The crayfish is consumed by first twisting the head to separate it from the tail. The juice is sucked from the head. To get at the tender meat, the tail’s shell is peeled in the same manner as peeling a shrimp.
The celebration at Sofitel will include Nordic dishes such as salmon gravadlax, smoked tuna with capers, Swedish meatballs with lingon jam, Janssons Temptation (a traditional Swedish casserole made of potatoes, onions, pickled sprats, bread crumbs, and cream), and toscakaka cake, and a variety of alcoholic beverages. Sing-alongs, games, and prizes are also in store.
The event’s proceeds will be donated to the Chosen Children Village (CCV), a foundation in Cavite that provides a home and care facilities for physically and mentally challenged children.
Tickets to the crayfish feast cost P3,900 each or P35,000 for a group of 10. For event tickets, visit crayfishparty.ph. For more information, call Georges Pattinson at 0977-099-8952 or e-mail georges.pattinson@nordcham.com.ph. — Michelle Anne P. Soliman

Alliance Select earnings soar in second quarter

THE attributable profit of Alliance Select Foods International, Inc. soared by 466% in the second quarter of 2018, as the company implemented various sourcing strategies that allowed it to maintain the prices of its tuna and salmon products.
In a regulatory filing, the homegrown international seafood company reported that net income attributable to equity holders of the parent reached $1 million in the April to June period, higher than the $177,945 it posted in the same period a year ago. This came on the back of a 34% increase in net sales to $23.9 million.
For the January to June period, Alliance Select’s attributable profit jumped by 720% to $2.2 million, versus the $268,240 seen in the same period last year. Net sales also firmed up 37% to $47.5 million.
The listed tuna manufacturer attributed the positive performance to “the implementation of several sourcing strategies and improved relationships with stakeholders, allowing the company to offer more value to its customers at sustained prices.”
Alliance Select noted the tuna business alone generated a 58% net revenue increase during the first half.
“Our tuna and salmon segments continue to display its potential in increasing sales and profit, and we plan on taking it to next level through continued innovation of both our products and processes,” Alliance Select President and Chief Executive Officer Raymond K.H. See was quoted as saying in a statement.
Alliance Select launched a new line of tuna products last July, catering to the local market that seeks quality products at an affordable price. The company also announced that it will be upgrading its facilities earlier this year.
“At present, we are already working on upgrading our plant technology and equipment across all our business sectors to strengthen company operations,” Mr. See said.
Incorporated in 2003, Alliance Select distributes its products to foreign markets such as Europe, the United States, Japan, and the Middle East. It has subsidiaries based in the US, Thailand, Indonesia, and New Zealand that handles salmon and seafood processing, canned fish processing, and fishing.
Shares in Alliance Select shed 4.76% or five centavos to close at P1 apiece at the Philippine Stock Exchange on Wednesday. — Arra B. Francia

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