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Cemex net income down despite higher cement sales

CEMEX Holdings Philippines, Inc. (CHP) swung to a net loss in the second quarter of 2018, as higher income tax expenses dragged its bottomline despite rising cement volumes.
In a disclosure to the stock exchange on Friday, the listed cement manufacturer said it recorded a net loss of P635 million in the three months ending June, against a profit of P136 million in the same period a year ago.
The company attributed the negative performance to higher income tax expenses amounting to P710 million during the period.
“This was due mainly to the utilization of the company’s deferred tax assets, which is a non-cash expense,” the company said.
The company generated P5.99 billion in net sales during the quarter, 6% higher year-on-year. Cement prices however slowed by 5% from the same period a year ago, dampening the higher volume.
On a six-month basis, CHP’s net loss amounted to P535 million, versus a net income of P486 million during the first six months of 2017. Revenues meanwhile went up by 8% to P11.88 billion.
Construction activities in the residential were among the factors that pushed CHP’s sales for the quarter, driven by sustained inflows from overseas, demand from the growing middle class and foreign residents, as well as more low-income and socialized housing projects.
The company also saw accelerated growth from infrastructure projects for the period. Citing government data, CHP said disbursements for infrastructure and capital outlay grew by 96% last April and 26% last May.
“Our results show our ability as a company to grow together with the market and serve the increasing infrastructure demand of the country, both public and private. The upgrades we have implemented in our operations and distribution processes have allowed us to continue supporting the country’s development,” CHP President and Chief Executive Officer Ignacio Mijares said in a statement.
Amid recording a loss for the first semester of the year, CHP noted that cash flow remained positive at P1.25 billion. Mr. Mijares said this will allow them to continue pursuing their expansion.
“We will continue to look for opportunities to improve our profitability understanding the need to increase our efficiencies to compensate rising input costs. We are encouraged by the progress in our cash position that will help fund the expansion of our operations in the coming years,” Mr. Mijares said.
CHP is currently undertaking a solid plant capacity expansion, investing $225 million into this. The company looks to complete the expansion by the first quarter of 2020.
The funding for capacity expansion forms part of the company’s P3.74-billion capital expenditures for the year, which also includes allocation for maintenance and other strategic investments.
Shares in CHP dropped 9.48% or 33 centavos to close at P3.15 each at the stock exchange on Friday. — Arra B. Francia

Vista Land secures P500-M corporate notes for capex

VISTA Land & Lifescapes, Inc. (VLL) has secured corporate notes amounting to P500 million to partially finance this year’s capital expenditures.
In a disclosure to the stock exchange on Friday, the listed property developer said the corporate notes are due 2028 with a fixed interest rate of 7.4985% per annum.
The corporate notes were issued to Eastwest Banking Corp., as per a corporate notes facility agreement the parties signed earlier this month. China Banking Corp., China Bank Savings, Inc., and Security Bank Corp were the note holders, while China Bank Capital Corp and SB Capital Investment Corp were tapped as joint lead underwriters.
China Bank Capital also acted as sole issue manager and sole bookrunner.
China Banking Corp. — Trust and Asset Management Group was the issuance’s facility agent, while VLL’s subsidiaries Brittany Corp., Crown Asia Properties, Inc., Camella Homes, Inc., Communities Philippines, Inc., Vista Residences, Inc., and Starmalls, Inc., were the subsidiary guarantors.
The P500-million corporate note issuance is in addition to the P7.7-billion note facility the company secured early this month, which will also be for VLL’s 2018 capex. The initial note issuance consisted of seven-year corporate notes worth P1.7 billion carrying an interest rate of 7.4913% per year, and 10-year corporate notes worth P6 billion with a coupon rate of 7.7083% per annum.
The Villar-led firm has committed to spend P50 billion in capex this year, in order to expand VLL’s leasable space to 1.4 million square meters. The company also looks to end the year with 30 shopping malls, from 22 at the end of 2017.
Earnings of VLL jumped by 13% to P2.6 billion in the first quarter of 2018, lifted by a 12% uptick in revenues to P10.1 billion during the same period.
Shares in VLL closed flat at P5.97 each at the stock exchange on Friday. — Arra B. Francia

Cebu Pacific expands fleet further with five Airbus A320neo order

CEBU AIR, Inc. the listed operator of Cebu Pacific, continues to expand its fleet as it looks to acquire five new aircraft, all of which are expected to be delivered by next year.
In a statement released on Friday, the local carrier said it is looking at the arrival of the first planes of its order of five Airbus A320neo with Pratt & Whitney PurePower PW1100G-JM geared turbofans during the first half of 2019.
“The five additional A320neo aircraft is on top of its order of two more A321ceo, 32 Airbus A321neo, and six ATR 72-600 aircraft, which are scheduled for delivery between 2018 and 2022. The additional aircraft will be used to support the carrier’s expansion plans,” the company said.
The new A320neos will join the Gokongwei-led company’s current fleet of 67 planes.
The acquisition of the new aircraft is hoped to be an economical move for the carrier, which may lead to “more compelling fares,” as it noted the A320neo’s higher seat capacity and more efficient fuel consumption. It said the new aircraft could fly a distance of up to 6,300 kilometers using 20% less fuel.
The new aircraft will come from Dublin-based aircraft leasing company Avolon Aerospace Leasing Ltd. Cebu Pacific signed an Operating Lease Agreement with the company for the acquisition.
Its Vice-President for Commercial Planning, Alexander G. Lao, said Cebu Pacific is eyeing nine additional aircraft every year from 2018 to 2022.
“We see expansion opportunities in new markets, as well as pent-up demand in areas where we currently operate. The introduction of the first new generation, fuel-efficient A320neo aircraft to the Philippine market will help us to further strengthen our position in the Philippines and allow us to further pursue expansion of our international route network,” Mr. Lao said in the statement.
During the first quarter, Cebu Air posted a 12% hike in its income at P1.437 billion, driven by an increase in passenger revenues. — Denise A. Valdez

BDO books flat first-half net income

By Melissa Luz T. Lopez, Senior Reporter
SY-LED BDO Unibank, Inc. reported a P13.1-billion net income as of end-June, slipping from a year ago amid lower non-interest gains and bigger operating costs.
In a disclosure on Friday, BDO said it booked P13.1 billion in earnings in the first six months of the year, 1.5% lower than the P13.3-billion net profit logged at end-June 2017.
The bank said procedural changes in the investment portfolio of subsidiaries BDO Life which took effect earlier this year, as well as the continued expansion of rural lender One Network Bank, Inc. fed into BDO’s bottom line.
Minus these changes, net income “would have increased by 13%,” the bank told the Philippine Stock Exchange.
Net interest income surged by 19% year-on-year to hit roughly P46 billion as customer loans grew by a fifth to reach P1.9 trillion. The bank also reported a lower share of soured debts at 1.2% of the total despite “broad-based” loan growth across all market segments.
Bank deposits also posted a 17% climb to P2.3 trillion.
Total capital reached P303 billion as of June which brought BDO’s capital adequacy ratio at 14%, well above the 10% requirement set by the Bangko Sentral ng Pilipinas.
Meanwhile, non-interest income declined by two percent to P22.8 billion. BDO said increases in insurance premiums and fee collections were offset by “unrealized mark-to-market losses” on BDO Life’s portfolio.
“Service charges and fees remained strong, but was tempered by weak underwriting and syndication activities in the capital markets,” the country’s biggest lender said.
The bank also incurred a 12% pickup in operating costs after it opened 45 additional branches and spent more on settling taxes. The Tax Reform for Acceleration and Inclusion law which took effect Jan. 1 doubled the documentary stamp tax rates imposed on bank checks, certificates of deposit, and similar financial instruments.
BDO currently runs 1,200 branches and over 4,000 automated teller machines nationwide, plus 24 service offices abroad.
The first semester income is barely half the P31 billion full-year profit guidance set by the bank when the year opened. BDO reported a P5.9-billion profit during the first three months of 2018.
“Despite the challenging macro environment, BDO will continue to capitalize on its strong business franchise and extensive distribution network, generate quality earnings driven by recurring income sources, as well as execute its growth strategy to expand into high growth areas and underserved segments,” the bank said.
BDO reported record earnings worth P28.1 billion in 2017.
Shares in BDO closed at P137 apiece on Friday, down 50 centavos or 0.36%.

Peso climbs on hawkish BSP

THE PESO gained strength versus the dollar on Friday, with hawkish remarks from the Bangko Sentral ng Pilipinas (BSP) boosting the currency to a one-month high.
The local unit closed at P53.285 against the greenback, 16 centavos stronger than its P53.435 finish on Thursday.
The peso initially traded weaker at P53.50, which also happened to be its intraday low. It improved during the session and even touched P53.28 as its best showing before settling at the closing rate.
Friday’s rate is the strongest since the P53.28-per-dollar close recorded on June 22.
Market players likely grew more upbeat towards the peso following a hawkish statement from BSP Governor Nestor A. Espenilla, Jr. on monetary policy.
“Central banks from emerging markets and Asia have made announcements about preemptive actions… in anticipation of trade tensions. We’ve been seeing that lately — even the BSP said they will more aggressive,” one trader said in a phone interview.
“Everyone’s proactive now, and that’s giving a little bit of a boost to Asian currencies and weakness to the dollar.”
Mr. Espenilla has said the central bank is already considering a “strong follow-through” policy adjustment during their Aug. 9 rate-setting meeting, and will also pause from reducing bank reserves this year and wait until inflation returns to target by 2019.
“That statement probably had an effect that meant BSP is really serious in containing inflation,” the trader added.
On top of the “more hawkish” cues from the central bank, another trader attributed the peso appreciation to heavy selling offshore as well as inflows from the equity market.
She added that market players are still awaiting for cues on the second-quarter economic growth in the United States, which will be released Friday night Manila time.
Dollars traded on Friday reached $794.8 million, bigger than the $625.4 million which exchanged hands the previous day. Both traders said that the higher amount was likely due to strong demand for trades rather than an intervention from the central bank. — Melissa Luz T. Lopez

Last-minute purchases lift stocks

By Arra B. Francia, Reporter
STOCKS capped the week on a positive note, lifted by last-minute buying on Friday.
The 30-member Philippine Stock Exchange index (PSEi) traded in the red for most of Friday’s session, reaching an intraday low of 7,586.34 — down by 1.04% — before climbing back 0.46% or 35.53 points to close at 7,701.38.
The broader all shares index also rose 0.21% or 10.01 points to 4,615.53.
“Philippine shares were traded higher at MOC (market on close) for the fourth consecutive trading day, using the mixed performance of the US and the earnings reports of several index constituents as a catalyst for this,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.
This marked the fourth day of gains for the market. Friday’s close was also its highest in a month.
Wall Street indices closed mixed on Thursday, with the Dow Jones Industrial Average firming up 0.44% or 112.97 points to 25,527.07. The S&P 500 index gave up 0.3% or 8.63 points to 2,837.44, while the Nasdaq Composite index shed 1.01% or 80.06 points to 7,852.18.
Asian stocks also logged mixed performances, as investors focused on trade news, specifically on talks between the United States and the European Union.
US President Donald Trump and European Commission President Jean-Claude Juncker have agreed to work together on lower trade barriers, in a bid to alleviate tensions on the trade war.
Most sectoral indices recorded gains, led by property which jumped 0.87% or 32.76 points to 3,790.08. Financials followed with an increase of 0.4% or 7.71 points to 1,901.55. Industrials posted an uptick of 0.35% or 38.66 points to 10,813.62; holding firms added 0.05% or 4.45 points to 7,552.37; while services went up 0.01% or 0.17 point to 1,484.23.
Mining and oil was the lone counter that ended in the red, losing 0.51% or 50.14 points to 9,771.97.
The market saw some 1.29 billion issues switch hands valued at P6.22 billion, slightly lower than the previous session’s turnover of P6.66 billion.
Foreign investors sustained their net buying position, with net sales at P370.74 million, albeit lower than the Thursday’s P644.67 million.
Decliners narrowly outpaced advancers, 89 to 86, while 50 names remained unchanged.

Sekaya Botanic Infusion: Tea with a Twist

If the first thing you think of when you roll out of bed in the morning is coffee, you’re not alone.
A 2017 study by Kantar Worldpanel revealed that coffee remained the Filipino’s “go-to” drink.
While a hot cup of coffee can sure perk you up in the morning, tea has just the right amount of caffeine (90% as compared to coffee) to get you going and the benefits of drinking tea go far beyond refreshments. Also, there are plenty of studies that show that drinking tea can improve your health.

It’s botanic infusion, not tea
Taken from Sentrong ng Pangkatutubong Yaman, ‘Sekaya’ is a consumer brand of Synnovate Pharma Corporation of Unilab, Inc. that focuses on functional food supplementation in the natural health landscape.
Its vision is to partner with the best food providers in town and bring wellness to the table.
Sekaya’s first line of products, Botanic Infusion, is a blend of traditional botanicals synergized to assist the body’s self-healing functions. It offers 24 variants, but only five were chosen that best fit the needs of restaurants, cafes, and hotel businesses.
“We want to achieve a certain level where customers drink because it is good for their health, and not only because it is refreshing,” Abrina added.
Compared to ordinary tea bags, Botanic Infusions come in loose leaves, roots, and bark that don’t have a bitter after-taste, and no lasting teeth discoloration.
“As the loose leaves, flowers, roots, and bark dance in the water, there’s a full release of flavor in the water as opposed to ordinary tea bags where it is thinly crushed and more constricted,” said Abrina.
Sekaya Botanic Infusion is the only natural products in the country that were processed and quality-tested in accordance with the more stringent pharmaceutical standards, as opposed to many natural products in the market which have been processed at non-cGMP (current good manufacturing process) facilities thus exposing them to bacterial and final contamination.
It demystifies the valuable healing benefits of nature by creating products that are plant based and science-based. It is certified organic by United States Department of Agriculture (USDA) and QAI, and meticulously tested in pharmaceutical grade laboratories.
For more information, visit www.sekaya.com.ph,and follow @sekayaph on Instagram or SekayaPh on Facebook.

BDO earnings dip in Q2

Sy-led BDO Unibank, Inc. reported a P13.1-billion net income as of end-June, down from a year ago amid lower non-interest gains and bigger operating costs.
In a disclosure on Friday, BDO said the bank booked P13.1 billion during the first six months of the year, 1.5% lower than the P13.3 billion net profit logged in June 2017.
The bank said procedural changes on the investment portfolio of subsidiaries BDO Life which took effect earlier this year, as well as the continued expansion of rural lender One Network Bank, fed into BDO’s bottom line.
Minus these changes, net income “would have increased by 13%,” the bank told the Philippine Stock Exchange.
“Despite the challenging macro environment, BDO will continue to capitalize on its strong business franchise and extensive distribution network, generate quality earnings driven by recurring income sources, as well as execute its growth strategy to expand into high growth areas and underserved segments,” the bank said.
BDO reported record earnings worth P28.1 billion in 2017. — Melissa Luz T. Lopez

Belle Corp posts higher earnings in second quarter

Belle Corp.’s attributable profit expanded by 10% in the three months ending June, driven by higher earnings of the City of Dreams Manila.
In a regulatory filing, the listed firm said net income attributable to equity holders of the parent reached P919 million in the second quarter of the year, higher than the P834 million it generated in the same period a year ago. Revenues for the second quarter meanwhile grew by 17% to P2.5 billion
This brought the company’s attributable profit for the first half of the year to P1.6 billion, 10% higher year-on-year, supported by a 9.6% increase in revenues to P4.52 billion. — Arra B. Francia

VLL issues P500 million corporate notes

Vista Land & Lifescapes, Inc. (VLL) has secured corporate notes amounting to P500 million to partially finance this year’s capital expenditures.
In a disclosure to the stock exchange on Friday, July 27, the listed property developer said the corporate notes are due 2028 with a fixed interest rate of 7.4985% per annum.
The corporate notes were issued to Eastwest Banking Corp., as per a corporate notes facility agreement the parties signed earlier this month. China Banking Corp., China Bank Savings, Inc., and Security Bank Corp were the note holders, while China Bank Capital Corp and SB Capital Investment Corp were tapped as joint lead underwriters. — Arra B. Francia

Cemex swings to net loss in second quarter

Cemex Holdings Philippines, Inc. (CHP) swung to a net loss in the second quarter of 2018, as higher income tax expenses dragged its bottomline despite rising cement volumes.
In a disclosure to the stock exchange on Friday, July 27, the listed cement manufacturer said it recorded a net loss of P635 million in the three months ending June, against a profit of P136 million in the same period a year ago.
The company attributed the negative performance to higher income tax expenses amounting to P710 million during the period.
“This was due mainly to the utilization of the company’s deferred tax assets, which is a non-cash expense,” the company said.
The company generated P5.99 billion in net sales during the quarter, 6% higher year-on-year. Cement prices however slowed by 5% from the same period a year ago, dampening the higher volume. — Arra B. Francia

Exceptional comfort

Established in 1933 with a fleet of only five aircraft, Star Alliance member Turkish Airlines now has a fleet of 325 passenger and cargo aircraft flying to 304 destinations in 122 countries – including the Philippines.
The national carrier of Turkey, which flies to more countries than any other airlines, holds itself to high passenger comfort standards. And this is best embodied by its Business Class that offers seating designed to take passenger comfort to the highest level.
Business-class passengers of Turkish Airlines get to enjoy seating features, which may vary depending on aircraft type, such as in-chair massage, reading lamp, power supply and the facility to screen off their private area. They can sleep in comfort with fully lie-flat seats and complimentary pillows and blankets.
In addition, each one of them is furnished with an amenity kit containing an assortment of items they may find useful – eye mask, ear plugs, lip balm and socks. Denon headphones that deliver perfect sound and minimize ambient noise by as much as 99% are also provided to them. Denon is a world-renowned manufacturer of audio and home entertainment systems.
Turkish Airlines has developed an innovation called “Sky Illusion Sleeping Collection” that enables its business-class passengers on intercontinental flights to enjoy the best Turkish hospitality within the concept of privileged travel, and promises home comfort on the clouds during extended range flights.
What’s more, chefs ply business-class passengers with lip-smacking Turkish and world cuisines served up on stylish porcelain tableware.
Istanbul Atatürk Airport, the main international airport serving Istanbul, a major city in Turkey, is home to one of the world’s most awarded private passenger lounges, Lounge Istanbul, which occupies 6,000 square meters and seats up to 1,100 people.
Business Class passengers traveling with Turkish Airlines, Miles&Smiles Elite and Elite Plus cardholders traveling in Economy Class, Star Alliance Gold and Turkish Airlines Corporate Club members are allowed access to Lounge Istanbul.
Lounge Istanbul, where the modern blends with the traditional, offers an atmosphere that’s tranquil and filled with entertainment.
Besides the unique tastes of Turkish and world dishes, the lounge offers a great range of services and activities, including a realistic racetrack providing the excitement of a car race, video game consoles, a cutting-edge golf simulator, private resting suits and showering areas, media wall, cinema, a play area for children, a library, a pool room, a prayer room, a teleconference hall, and massage service.
Passengers who fly through Istanbul and have a waiting time of at least six hours are welcome to Touristanbul. After arriving at Istanbul Atatürk Airport, they will be picked up and taken to the most significant historical sights of the city, where some of the world’s major civilizations emerged and flourished, as well as to its natural beauties. Once the sightseeing is over, the passengers will be taken back to the airport for their next flight.
For more information, visit www.turkishairlines.com, e-mail MANILASALES@THY.COM or TICKETING@THY.COM.PH or contact (+632) 894-5416 or (+632) 864-0600.

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