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Consunji’s $305.6-M Cemex buy gets PCC approval

CEMEX

THE CONSUNJI Group has received PCC approval for its $305.6-million acquisition of Cemex Asian South East Corp. (CASEC), which holds an 89.86% stake in Cemex Holdings Philippines, Inc.

The PCC has issued a certification clearing the proposed joint acquisition by Consunji Group firms DMCI Holdings, Inc., Semirara Mining and Power Corp. (SMPC), and Dacon Corp. of the entire stake in CASEC held by Cemex Asia B.V., the companies said in separate disclosures on Wednesday.

Cemex Holdings Philippines primarily sells gray ordinary Portland cement, masonry cement, mortar cement, and blended cement.

“The clearance of the PCC is one of the conditions precedent to, and a regulatory requirement necessary before, consummating the joint acquisition,” the companies said in separate disclosures.

In April, DMCI, SMPC, and Dacon signed a share purchase agreement with Cemex Asia to acquire 42.14 million common shares in CASEC.

Under the agreement, DMCI is set to acquire a 56.75% stake (23.92 million shares); Dacon, 32.12% (13.54 million shares); and SMPC, 11.13% (4.69 million shares).

“The acquisition of CASEC will allow DMCI to venture into the cement industry,” DMCI said in an April 25 disclosure.

The companies said that the closing of the transaction is contingent upon satisfying certain conditions, including the completion of the sale and purchase of shares, through which Cemex Asia would indirectly divest its 40% interest in both APO Land & Quarry Corp. and Island Quarry and Aggregates Corp.

There is also a need to fulfill any mandatory tender offer requirement by the buyers to the shareholders of Cemex Philippines.

Cemex Philippines operates two principal subsidiaries, APO Cement Corp. and Solid Cement Corp. Both companies are engaged in the manufacture, marketing, distribution, and sale of cement and other building materials in the Philippines. — Sheldeen Joy Talavera

Converge adjusts 2024 revenue forecast to 12-14% following Q2 gains

CONVERGE ICT Solutions, Inc. has revised its revenue growth forecast for 2024 to between 12% and 14%, up from the earlier estimate of 7-8%, driven by market optimism after stronger second-quarter (Q2) earnings.

For the second quarter, Converge registered an attributable net income of P2.74 billion, up 29.8% from the P2.11 billion in the same period last year, the company’s financial statement showed.

Despite posting increased gross expenses for the April-to-June period at P6.18 billion, 15.1% higher than the P5.37 billion previously, the company managed to register higher earnings on elevated revenues.

Converge posted a P9.98 billion gross revenue for the second quarter, climbing by 14.4% from last year’s P8.72 billion.

“As you know, we have performed very well for the first half; we are off to a strong start. But generally speaking, the Philippines is still a very under-penetrated broadband market, and we do believe we have the right products for all households in the country,” Converge Chief Finance Officer Robert A. Yu said during a briefing.

Broken down, its residential business revenues grew by 13.3% to P8.47 million, accounting for 84.9% of its revenue for the period, while its enterprise business registered a P1.51-billion revenue during the period.

For the first semester, Converge’s attributable net income climbed to P5.29 billion, marking an increase of 23.6% from the P4.28 billion in the same period last year.

Its gross revenues increased to P19.52 billion, higher by 12.4% from the P17.37 billion in the same period last year.

For the January-to-June period, the company’s residential business continued to drive its revenue growth after soaring by 11.8% to P16.64 billion, accounting again for the majority of its revenue share for the first half, while its enterprise business registered a revenue of P2.88 billion, higher by 16% from the P2.49 billion a year ago.

As of the end of June, Converge said it had a total of 2.35 million subscribers, comprising 2.16 million postpaid subscribers and 192,519 prepaid subscribers.

“What we’re seeing is a changing of the guard in the industry, and this comes as no surprise given our hard-earned investments into our fiber network,” Converge President and Chief Resources Officer Maria Grace Y. Uy said.

Converge is now allocating up to P12 billion for its capital expenditure (capex) to be spent in the latter half of 2024, Mr. Yu said.

He noted that the company spent around P4.7 billion on capex during the first half of the year, citing heightened sales requirements.

“This is slightly higher than our initial guidance due to the heightened sales requirements, necessitating some level of augmentation on our part,” he said.

Converge has said that its 2024 cash capex is expected to settle at P15 billion-17 billion.

The company also said that its capex would be allocated to the additional strategic deployment of ports anticipated in the second half of the year due to the increasing demand for residential products, as well as to cover the remaining international subsea cable payments.

Meanwhile, Converge Chief Executive Officer Dennis Anthony H. Uy said the company is moving forward with its data center business.

“By the end of the year, we have one three megawatts (MW) that we are going to fire up. So, next year, hopefully by the second quarter, the big one in Pampanga will have 10 MW,” he said.

In June, Converge announced a partnership with US-based Super Micro Computer, Inc. to develop energy-efficient data centers aimed at reducing costs and environmental impact.

Converge announced in January its plan to allocate up to P5 billion over the next three years to build data centers that will host its planned digital platforms and store applications and information. The company intends to construct data centers in Pampanga, Laguna, and Caloocan.

At the local bourse on Wednesday, shares in the company closed 24 centavos or 1.98% higher to end at P12.34 apiece. — Ashley Erika O. Jose

JFC income up 31% on improved system-wide sales

LISTED Jollibee Foods Corp. (JFC) recorded a 30.8% increase in its attributable net income for the second quarter to P3.04 billion from P2.33 billion last year, driven by higher system-wide sales.

April-to-June system-wide sales (SWS) rose by 12.1% to P95.8 billion, while revenue climbed by 10.6% to P67.22 billion, JFC said in a regulatory filing on Wednesday.

JFC Chief Executive Officer Ernesto Tanmantiong said the revenue growth was led by the company’s Philippine business, which increased by 11.1%, as well as the international business, which rose by 9.7%.

“SWS for the quarter rose 12.1% year on year, with the Philippine business’ Jollibee, Chowking, and Mang Inasal brands outperforming their SWS targets. Our international business delivered strong second-quarter SWS with robust growth in Europe, the Middle East, and Asia (EMEAA) and North America,” he said. 

“Our coffee and tea business improved sequentially and year on year, led by The Coffee Bean & Tea Leaf (CBTL), which grew SWS by 25.6% during the quarter,” he added.

SWS growth was led by the 7.4% increase in same-store sales growth (SSSG), the 3.6% jump in new store sales, and the 1% climb in foreign currency changes.

Sales from digital channels, which include online sales and self-order kiosks, rose by 22.4%, driven by EMEA, CBTL, and Philippine businesses. Digital channels accounted for 21% of JFC’s sales for the second quarter. 

SSSG for the Philippine business rose by 9.1%, led by strong demand from end-of-school-year activities and special occasions such as Mother’s Day and Father’s Day.

The international business had a mixed SSSG performance, posting a 4.7% growth during the period.

EMEA grew by 16.8%, driven by Jollibee Vietnam. Jollibee USA and Canada grew by 15.7% and 10.3%, respectively, while Smashburger declined by 3.6%.

For the coffee and tea segment, CBTL grew by 11.4%, Milksha rose by 6.8%, and Highlands Coffee fell by 3.3%. The China business declined by 13.4% due to weak consumer spending, reflecting overall industry trends.

For the first half, JFC grew its attributable net income by 28.9% to P5.66 billion from P4.39 billion a year ago.

SWS increased by 11.3% to P182.63 billion, while revenue climbed by 10.9% to P128.52 billion. 

JFC has lowered its capital expenditure budget this year to P16 billion-P18 billion from the initial P20 billion-P23 billion range to prioritize “champion brands.”

“As we move into the second half of the year, we remain focused on capital allocation discipline and prioritizing opportunities with the greatest growth potential that will give the best value for JFC and our shareholders,” JFC Chief Financial and Risk Officer Richard Shin said. 

As of end-June, JFC has 6,956 stores worldwide, consisting of 3,348 in the Philippines and 3,608 in other countries.

Of the international stores, 567 are in China, 383 are in North America, 356 are in EMEA, 789 with Highlands Coffee (mainly in Vietnam), 1,186 with CBTL, and 327 with Milksha. 

Its largest brands by store outlets worldwide are Jollibee with 1,697, CBTL with 1,186, Highlands Coffee with 789, and Chowking with 618.

JFC shares rose by 2.98% or P7 to P241.60 per share on Wednesday. — Revin Mikhael D. Ochave

Ayala Corp. sees 12.5% boost in Q2 profit

LISTED conglomerate Ayala Corp. reported a 12.5% increase in attributable net income for the second quarter (Q2), reaching P9.21 billion compared with P8.19 billion in the same period last year, driven by higher revenues and growth across its business units.

Second-quarter revenue rose by 8.7% to P92.67 billion compared with P85.27 billion in the previous year, Ayala Corp. said in a regulatory filing on Wednesday.

For the first half of the year, Ayala Corp. achieved a 21% increase in net income, amounting to P22.3 billion, compared with P18.4 billion in the same period last year.

Revenue for the January-to-June period increased by 10% to P179.94 billion compared with P164.24 billion in 2023.

First-half core net income, which excludes significant one-off items, rose by 18% to P24.3 billion, driven by higher contributions from the Bank of the Philippine Islands (BPI), Ayala Land, Inc. (ALI), Globe Telecom, Inc., and ACEN Corp.

The conglomerate also received a boost from AC Energy & Infrastructure.

“We are pleased with the sustained growth trajectory of our core earnings. We will continue to grow our quality businesses and explore initiatives to improve shareholder value,” Ayala President and Chief Executive Officer (CEO) Cezar P. Consing said.

For the banking business, BPI recorded a 22% increase in first-half net income, reaching P30.6 billion. Total revenue climbed by 24% to P81.2 billion, as net interest income surged by 22% to P61.3 billion.

Operating expenses rose by 22% to P38.3 billion due to higher manpower, transaction processing, and technology costs.

In the real estate sector, ALI recorded a 15% increase in first-half net income, amounting to P13.1 billion. Total revenue surged by 28% to P84.3 billion.

Property development revenues improved by 34% to P51.9 billion, while residential reservation sales climbed by 17% to P68.4 billion. Commercial leasing revenues rose by 10% to P22.1 billion.

In the telecommunications sector, Globe saw a 1% increase in net income to P14.5 billion, attributed to one-time gains from the company’s tower sale program.

Gross service revenue increased by 2% to P82.2 billion, supported by growth in corporate data and mobile data.

In the power segment, ACEN reported a 49% increase in first-half net income, reaching P6.3 billion, driven by additions in operating capacity across major markets, including the Philippines, where the company improved its position as a net seller in the local electricity spot market.

Total renewable attributable output increased by 42% to 2,908 gigawatt-hours, as production from newly operational plants outweighed the seasonal drop in output from renewable energy sources in the second quarter.

Meanwhile, Ayala Corp. recorded mixed performances across its portfolio investments.

Ayala Healthcare Holdings, Inc. widened its net loss to P327 million due to costs related to the ramp-up of its cancer hospital in Taguig City. Revenues rose by 12% to P4.4 billion, driven by contributions from both its hospital and clinics segment as well as its pharmaceutical group. 

AC Industrial Technology Holdings, Inc. narrowed its net loss to P5.3 billion from P5.8 billion, due to lower impairments.

Integrated Micro-Electronics, Inc. (IMI) recorded an $8.8-million net loss as revenues fell by 18% to $566 million, attributed to continued market softness.

“IMI is focused on improving financial health and operational effectiveness through various initiatives, including simplifying its organizational structure, eliminating operational redundancies, and reallocating resources toward high-growth and high-margin segments,” the conglomerate said.

ACMobility sustained progress in broadening its portfolio of passenger vehicles and EV charging infrastructure. The company recently launched the Kia Sonet in June and the BYD Sealion 6 DM-i in July, expanding its lineup of electric, hybrid, and traditional vehicles. The company has rolled out 70 charging stations in 31 locations as of end-June.

In a separate statement, ALI’s real estate investment trust, AREIT Inc., reported a 44% increase in first-half net income, reaching P2.9 billion, with revenues surging by 43% to P4.2 billion.

“AREIT’s stellar performance in the first half was driven by its acquisitions, such as the One Ayala Avenue East and West Office Towers, Glorietta 1 and 2 Mall, and office buildings at Ayala Center Makati, MarQuee Mall in Pampanga, and the Seda Hotel in Lio, El Nido,” the company said.

AREIT’s occupancy rate was pegged at 96%, higher than the industry average. The company’s assets under management (AUM) stand at P88.6 billion, comprising offices, malls, hotels, and industrial land.

“AREIT is set to quadruple its AUM this year from the time we listed in 2020 — a fitting milestone as we celebrate our fourth anniversary since we listed in 2020 at the height of the pandemic,” AREIT President and CEO Carol T. Mills said.

“On account of the portfolio’s solid track record and the significant addition of prime flagship assets, revenues soared 467% from P907 million to P4.2 billion, dividends doubled from P0.28 to P0.56 per share, and total shareholder return to date reached the highest among Philippine REITs at 74% since the IPO,” she added.

AREIT is expected to grow its AUM to P117 billion this year upon regulatory approval of the asset-for-share swap with its sponsor, ALI, and its subsidiaries and related companies for P28.6 billion worth of prime assets.

These properties include the Ayala Triangle Gardens Tower Two Office building, Greenbelt 3 and 5, Holiday Inn in Ayala Center Makati, Seda Ayala Center Cebu, and a 276-hectare land in Zambales for solar power plant operations.

On Wednesday, Ayala Corp. shares increased by 2.83% or P17 to P618 per share, while AREIT stocks rose by 1.17% or P0.45 to P39 per share. — Revin Mikhael D. Ochave

MacroAsia earnings more than tripled in Q2

AIRCRAFT MAINTENANCE service provider MacroAsia Corp. more than tripled its second-quarter (Q2) attributable net income to P431.67 million, up from P134.7 million a year ago, mainly driven by increased revenue and growth across its business units.

For the second quarter, MacroAsia’s combined revenue surged by 32.8% to P2.55 billion, compared with P1.92 billion previously, the company’s financial statement showed.

This second-quarter revenue represents MacroAsia’s highest quarterly top line, the company said, adding that the revenue growth was driven by strong performance across all its business units.

Lufthansa Technik Philippines, the company’s aircraft maintenance, repair, and overhaul associate, generated quarterly income of P529.33 million, with MacroAsia’s 49% share amounting to P290.24 million, the company said in a media release.

Lufthansa Technik is planning an expansion in Clark, Pampanga, to address the increasing demand for heavy repair services for wide-body aircraft from its clients.

For the first half of the year, the company’s attributable net income more than doubled to P691.59 million, compared with P285.77 million in the same period last year.

Gross revenue expanded to P4.77 billion, up by 28.6% for the January-to-June period, compared with P3.71 billion in the same period last year.

Broken down, ground handling and aviation revenue increased to P2.19 billion, marking a 47% rise from P1.49 billion previously. In-flight and other catering revenue also grew to P2.15 billion, compared with P1.88 billion last year.

Additionally, water distribution revenue reached P327.1 million, connectivity and technology services revenue was P43.6 million, aviation training fees amounted to P36.3 million, and administrative fees totaled P26.9 million.

For the first half, gross expenses rose by 22.4% to P4.04 billion, compared with P3.3 billion in the previous year.

Additionally, MacroAsia stated that its food segment is expanding its facility outside the airport. The five-year-old facility in Muntinlupa City is now reaching full capacity due to increasing clients.

At the local bourse on Wednesday, shares in the company gained 51 centavos or 11.62% to end at P4.90 apiece. — Ashley Erika O. Jose

Chelsea Logistics swings to profit with P67.54 million Q2 net income

CHELSEA Logistics and Infrastructure Holdings Corp. recorded an attributable net income of P67.54 million for the second quarter, turning around from a net loss of P106.83 million previously, driven by higher revenues for the period.

“The strong results and sequential and year-on-year improvements in the second quarter of 2024 demonstrate our commitment to executing our strategic priorities,” Chelsea Logistics President and Chief Executive Officer Chryss Alfonsus V. Damuy told the stock exchange on Wednesday.

For the second quarter, the company reported gross revenue of P2.2 billion, climbing by 17.6% from P1.87 billion in the same period last year.

Chelsea Logistics registered gross expenses of P1.87 billion for the April-to-June period, higher by 11.3% from P1.68 billion a year ago.

For the first half of the year, the company narrowed its attributable net loss to P80.63 million from P430.87 million in the same period last year.

Year to date, Chelsea Logistics generated gross revenue of P3.98 billion, expanding by 11.2% from P3.58 billion in the first half of 2023.

Chelsea Logistics attributed its higher revenues to robust growth in its passage, chartering, tugboats, and logistics segments.

“The passage segment benefited from increased passenger volume, while the Tugboats and Chartering segments saw higher utilization rates,” Chelsea Logistics said.

The company said that its logistics segment continued to recover, driven by growing demand for door-to-door services, especially in air and land freight segments.

In 2023, the company trimmed its net loss to P1.14 billion, improving from a P2.53-billion loss in the prior year.

In its annual report, Chelsea Logistics’ gross revenue reached P7.05 billion, up by 9.6% from P6.43 billion in 2022. — Ashley Erika O. Jose

Century Properties income jumps 87%, driven by affordable housing

LISTED Century Properties Group, Inc. (CPG) recorded an 87% increase in its second-quarter attributable net income to P664.16 million from P354.31 million last year, led by its affordable housing segment.

Revenues during the second quarter dropped by 5.1% to P3.58 billion from P3.77 billion a year ago, CPG said in a regulatory filing on Wednesday.

For the first half, CPG grew its attributable net income by 64% to P1.07 billion from P656.3 million last year.

Revenues rose by 6% to P7.16 billion from P6.74 billion last year, while earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 45% to P2.11 billion.

“The substantial growth in CPG’s EBITDA and our bottom line far outpaced the incremental increase in our top line due to the convergence of several strategic moves put in place by the company,” CPG Chief Finance Officer Ponciano S. Carreon, Jr. said.

“Without losing sight of the premium residences that our customers and market expect from an established ‘Century Brand,’ we were bullish in favor of the robust real needs of our fellow Filipinos for affordable and quality homes, bringing in the much-needed high-margin, high-velocity products…,” he added.

CPG’s First-Home Residential (PHirst) platform accounted for P4.4 billion or 61% of total revenue, led by continued strong sales take-up and on-track development and construction activities.

The premium residential segment contributed P1.9 billion or 26%, the commercial leasing business accounted for P0.65 billion or 9%, and the property management arm made up the remaining 4% or P0.26 billion.

CPG’s First Home brand is launching five new projects in 2024. The company introduced PHirst Sights Calauan and PHirst Park Homes Calamba West in Laguna earlier in the year.

The second development in San Pablo, Laguna, is set for the third quarter, while additional projects in Batangas and Bulacan are planned for the fourth quarter.

“These developments will span 85 hectares with over 8,000 units valued at P18.5 billion,” CPG said.

Meanwhile, CPG President and Chief Executive Officer Marco R. Antonio said the company is optimistic that it will be able to sustain or exceed its growth trajectory amid “positive domestic macroeconomic indicators and the government’s implementation of sound economic and business-friendly policies.”

“The strong demand for residential properties in both the affordable, mid-market, and healthy premium niche markets, which are now the focus of our group, continues to inspire us to deliver fresh new concepts that are relevant to our market’s needs and desires, and that will create more value for all our stakeholders,” he said.

On Wednesday, CPG shares fell by 1.49% or P0.005 to P0.33 apiece. — Revin Mikhael D. Ochave

When stars align

MAIN DISHES (clockwise from top left): Sea Cucumber Spring Roll; Bulacan River Prawn, Etag Xo; Pomfret Fish Pares, with Abalone Sauce Rice; and White Pepper Virgin Mud Crab Thick Soup.

HKTB presents a four-hands dinner in the run-up to HK’s Wine & Dine Fest

TWO culinary stars from Hong Kong (HK) and Manila joined forces for a dinner at the top floor the Grand Hyatt Manila, making for a dinner that was truly unique.

Chefs and restaurateurs Margarita Forés and Vicky Cheng cooked together for a dinner — When Stars Align: A Four Hands Dinner and Culinary Showcase — on Aug. 7 that showcased unique ingredients from Hong Kong and the Philippines. Ms. Forés is the restaurateur behind the Cibo chain of Italian restaurants (among others such as Grace Park and Lusso), and Asia’s Best Female chef of 2016. Mr. Cheng, meanwhile, is behind Vea (with one Michelin star) and Wing (No. 5 on Asia’s 50 Best Restaurants in 2024) in Hong Kong.

The Forés-Cheng dinner was a prelude to Hong Kong’s Wine & Dine Festival in October, which will see over 300 participating merchants. The annual celebration attracts food and wine enthusiasts from around the world and showcases Hong Kong’s food scene and its reputation as a dining destination.

Liew Chian Jia, the Hong Kong Tourism Board’s (HKTB) Regional Director of Southeast Asia, said in a speech before the dishes started coming out of the kitchen that in the first half of 2024, they received 500,000 Filipino tourists. “We put this very special showcase together to showcase the culinary scene of the Philippines together with Hong Kong. Really, it’s to celebrate the special bond between the Philippines and Hong Kong,” she said.

COLLABORATIVE MENU
Dinner began with “snacks,” actually quite a veritable spread, starting with Mr. Cheng’s hand-pulled noodles and a mala chili sauce, topped with something we’d never seen before: a transparent, crystal-clear century egg. This was accompanied by bowls of smoked eggplant, ukoy (shrimp fritters), and banana heart salad (taken from a childhood recipe from Ms. Forés home with her Araneta forebears). All these were served in bright celadon bowls. The noodles were perfectly sharp and spicy, contrasting with the surprisingly mild century egg, while the smoked eggplant was perfectly earthy. Ms. Forés’ ukoy, battered shrimp on top of a blue marlin kilawin (raw fish dressed in citrus and vinegar), had a subtle, sparkling brilliance, most definitely contributed by the delicate fish. The banana heart salad provided a sweet, unexpected ending.

The soup course — courtesty of Mr Cheng — was a White Pepper Virgin Mud Crab soup, with slabs of fat still floating in it. This was perfumed with tonkin jasmine (requested by Mr. Cheng and obtained by Ms. Forés from the Ilocos), providing green delicacy to the already-delicate and creamy soup. The next course was a solo piece by Ms. Forés’ — a large Bulacan river prawn with Hong Kong noodles (brought over by Mr. Cheng in his luggage), and the Cordilleran smoked meat etag. It was an interesting game of contrasts: the prawn was wild and creamy, while the noodles were fiery and earthy.

Mr. Cheng urged us to eat the next course, a Sea Cucumber Spring Roll, with our hands — it was deliciously smoky, but very messy.

After the brilliance of the preceding dishes, the Pomfret Fish Pares with Abalone sauce rice was a bit of a letdown, showing off mild, timid flavors, but wÍe guess everybody needs a little break from all the spectacle of the preceding courses. Desserts were an ube (purple yam) gelato with snow gum and osmanthus flowers, and mochi filled with Cebu mango.

“I went [to Hong Kong] for the first time when I was eight,” said Ms. Forés. “When I lived there and worked there in 1982, that was the first time, actually, that I started to cook in a kitchen, a few years before going to Italy. That’s because Hong Kong is so inspiring.” — JL Garcia

Megawide sees 30% drop in Q2 profit to P258.66 million

SAAVEDRA-LED infrastructure conglomerate Megawide Construction Corp. recorded a 30% drop in its attributable net income for the second quarter (Q2) to P258.66 million, compared with P370.28 million last year.

Second-quarter revenue fell by 8.7% to P6.21 billion, compared with P6.8 billion a year ago, Megawide said in a regulatory filing on Wednesday.

For the first half, Megawide said its net income rose by 21% to P438 million, driven by its construction and real estate businesses.

The company posted P11.4 billion in first-half revenue, up by 2% from P11.16 billion last year, led by the construction segment and the initial contribution of the real estate business.

Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 24% to P2.6 billion, compared with P2.1 billion a year ago.

“Construction has been a significant growth driver for the economy during the period as the government continued to push for infrastructure development, complemented by a more normalized operating landscape,” Megawide Chairman and Chief Executive Officer Edgar B. Saavedra said.

“This benefited our integrated operations, which sustained a strong start to the year and is expected to be a key engine for Megawide’s value creation mode,” he added.

For the first half, construction revenue fell by 0.6% to P10.9 billion, compared with P10.97 billion last year, and accounted for 95% of total revenue.

The company had P8.9 billion worth of new projects during the period, including affiliate Megawide Construction Corp. – Citicore Construction, Inc., representing several locations of Citicore’s solar power plants; Contract Package-104 of the Metro Manila Subway System Project; and PH1 World Developers, Inc.’s Modan Lofts Ortigas Hills residential condominium project in Taytay, Rizal.

Megawide’s order book is worth P48 billion as of end-June, equivalent to two to three years’ worth of revenue.

The manufacturing business, consisting of the pre-cast and construction solutions segment, saw a 150% increase in revenue to P1.9 billion and contributed 17% to overall revenue.

“Our PCS business is expected to be a strong contributor moving forward, especially with higher margins associated with it and significant economies of scale potential. We believe that the growing appreciation and application of our PCS products in infrastructure, residential, and commercial developments will accelerate the unit’s income generation and boost its share in our construction business,” Mr. Saavedra said.

Real estate revenue reached P311.1 million, equivalent to 3% of total revenue, led by ongoing projects My Enso Lofts and The Hive. Newly launched projects such as Modan Lofts Ortigas Hills and Southscapes in Trece Martires contributed more than half of the P1.5 billion in sales registered during the period.

Revenue from landport operations rose by 7.4% to P205.2 million, equivalent to 2% of total revenue, led by the office towers and commercial spaces business. Foot traffic reached a record of 156,000 monthly average for June, while spending per passenger reached P34.

Occupancy in the commercial segment reached 84%, while the take-up of office towers hit 37%, which included government offices, transport services, and travel agencies as new tenants.

On Wednesday, Megawide shares were unchanged at P2.68 apiece. — Revin Mikhael D. Ochave

Your favorite wine regions will feel the heat

FREEPIK

By David Fickling

WHAT’S the first industry to fall victim to climate change? There’s a decent argument that it already happened — more than 600 years ago.

When the Norman Conquest in 1066 installed a French feudal aristocracy in the British Isles, the invaders brought with them a love of winemaking. Those skills flourished in the conditions of the Medieval Warm Period, a patch of unusually high temperatures from about 950 to 1250 that allowed vineyards to spread across the well-drained chalk soils of southern England. The mild conditions gave way to a frigid period known as the Little Ice Age, however, which held sway until the 19th century. As the climate cooled, English viticulture collapsed.

That should be a worrying example if you’re a winemaker. Grape vines are notoriously sensitive to the smallest changes in landscape and climate. Those with a skilled palate (I’m not one of them) can supposedly sense the subtlest of environmental effects in a bottle of wine — whether the winter that preceded the vintage was warm or cold, the harvest wet or dry, the grapes grown on a slope facing to the north or the south.

It doesn’t take much imagination to see how a warming climate could play havoc with this. Own a semiconductor factory, and your climate exposures will occur on the macro scale. Will bigger rainstorms flood the site, and will hotter summers push up my bill for air conditioning? A vintner, on the other hand, has to think about micro issues. Will a few extra warm nights or blazing days in growing season throw off the delicate balance of sugar and water formation in developing bunches? And will that make the resulting bottles less fragrant or complex than they otherwise would be?

For winemakers in Europe, a fresh climate headache is looming in the geographic indications they’ve used to defend their art. For the best part of a century, European agricultural producers have built a complex system of intellectual property around the idea that particular types of food and drink are regionally distinctive, and have names that must be protected under copyright law. There’s even a line on geographical indications in the Treaty of Versailles, the document that formally ended World War I.

Recognition of geographic indications is a basic hurdle for any nation wanting to strike a trade deal with the European Union and gain access to the world’s second-biggest market. It’s why makers of sparkling wine in most of the world can’t call their product Champagne, and why Australian and Canadian producers of fortified white wine these days label their bottles as “Apera,” because only those from the Jerez region of Spain can call themselves Sherry. Fully 1,646 of the 1,658 geographic indications for wine listed on the European Union’s (EU) eAmbrosia register are for EU countries. Of the rest, five are in the United Kingdom, four in China, two are in the United States (the Napa Valley and Willamette Valley) and one in Brazil.

Adding such geographic limits might have seemed like a good idea during the stable climate of the 20th century, but in the more disordered era into which we’re now moving it’s a risk. Many geographic indications assign a specific grape variety for a specific region. Barolo, arguably Italy’s most revered wine style, must be grown only with Nebbiolo grapes in a handful of communities among the misty mountains of Piedmont. As a warming planet makes the climate of northern Italy more like regions further south where Nebbiolo can’t flourish, the rigidity of Barolo’s geographic indication risks driving it into extinction.

Researchers in Europe recently analyzed 1,085 wine geographic indications across the continent to work out which were most at risk from a warming climate. What they found should worry viticulturalists: a swath of country is highly vulnerable to the effects of climate change, and has little natural capacity to adapt.

“Strong yield decreases were projected for northern Italy, central Spain, Greece, and Bulgaria,” they wrote, “and decreased suitability for Spain, parts of France, central and northern Italy, and large parts of eastern Europe.” In Burgundy, regions known for the Pinot Noir grape may become unable to grow the variety. The geographic indication system needs to be rethought to allow winegrowers to switch their practices as the climate warms, they argued.

That shouldn’t be impossible. Champagne, grown at the northern limit of wine cultivation and traditionally seen as the product of a difficult environment, is conventionally made from just three grape varieties: Pinot Noir, Chardonnay, and Meunier. But there are four other less celebrated varieties* that can be added to the blend, and may provide a way of preserving the wine’s characteristics even as the climate of Champagne starts to more closely resemble that of southern France. A further variety, known as Voltis, has been selectively bred as part of a deliberate effort to prepare for the effects of a warmer climate.

For many wine regions, that’s going to be a wrenching shift. What makes European wine unique is the marriage of a particular grape and viticultural practice with a particular region’s soil, climate, and intangibles. That sort of thinking is going to have to change as the planet warms. If Europe’s winemakers don’t want to experience the fate of medieval English vineyards, they’ll need to adapt before they’re wiped out. — Bloomberg Opinion

*The varieties are Arbane, Petit Meslier, Pinot Gris, and Pinot Blanc. They’re often regarded as more difficult to work with in Champagne.

Bloomberry Resorts’ Q2 income down 61% on weak VIP segment, higher costs

RAZON-LED Bloomberry Resorts Corp. recorded a 61% decline in its second-quarter (Q2) net income to P1.3 billion from P3.4 billion last year due to higher costs and weak VIP segment performance.

Gross gaming revenue (GGR) in the second quarter fell by 4% to P14.5 billion from P15.1 billion a year ago due to “continued weakness in the VIP segment,” Bloomberry Resorts said in a regulatory filing on Wednesday.

Second-quarter total GGR at Solaire Resort Entertainment City shrank by 12% to P13.3 billion due to lower VIP rolling chip and mass table drop volumes, which was partly offset by growth in electronic gaming machine (EGM) coin-in and GGR.

Solaire Resort North logged 37 operating days in the second quarter and recorded total GGR of P1.1 billion from its mass table games and EGM businesses. Non-gaming revenue reached P213 million.

Pre-operating expenses of Solaire Resort North amounted to P764.1 million and P73.8 million in the second quarters of 2024 and 2023, respectively.

Jeju Sun Hotel & Casino in Korea generated P35.7 million worth of GGR in the second quarter, up by 660% from P4.7 million in 2023. Non-gaming revenue rose by 45% to P125.5 million.

For the first half, Bloomberry Resorts reported a 38% drop in net income to P4 billion from P6.4 billion a year ago.

Excluding the impact of gains from the disposal of an asset and the liquidation of a subsidiary, net income would have decreased by 58% in the second quarter of 2024 and by 35% in the first six months.

Consolidated GGR fell by 6% to P29.2 billion from P31.2 billion last year. Nongaming revenue increased by 11% to P4.6 billion.

“In the second quarter and first half of 2024, our mass gaming revenues across two properties increased year over year despite the very high base set in the first half of 2023. However, continued weakness in the VIP segment as well as pre-operating and operating expenses at Solaire Resort North resulted in a decline in consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) and net income,” Bloomberry Chairman and Chief Executive Officer Enrique K. Razon, Jr. said.

He said that Bloomberry Resorts is expecting a boost from the ramping up of operations at Solaire Resort North, which was opened on May 25.

“Despite our weaker consolidated year-over-year performance, I am pleased to report that Solaire Resort North recorded positive EBITDA of P250 million in its first 37 days of operations. We are in the early stages of the property’s ramp-up and are happy with the pace, especially as we compare it to the ramp of Solaire in Entertainment City over 11 years ago,” Mr. Razon said.

“As revenues at our second property grow, we anticipate further synergies and positive operating leverage to contribute to our group’s profitability in the coming quarters,” he added.

On Wednesday, Bloomberry Resorts shares dropped by 5.84% or 45 centavos to P7.25 per share. — Revin Mikhael D. Ochave 

Surprises at a Spanish food fest

SPANISH restaurants dot the city, thanks to our colonial connection with Spain, and few people can deny knowing about paella, gambas, jamon and all that. Still, the Casa Española food festival at Rustan’s Makati can bring a few surprises to the tongue.

At an opening to the festival on July 30, guests were taken around to view the Spanish crockery, uniquely Spanish kitchen implements (how many people actually need a jamon stand? Lots, going by the sales during the day), but especially food imported from Spain.

Highlights include the cans of higado de bacalao (cod liver), which sounds remarkably unpleasant, but was the best surprise of the evening, melding together creamy and salty flavors in a can that costs about P250 (sold out that evening; ladies were filling baskets to the brim). Another thing to look forward to is the jamon de Teruel.

The fair was organized by Tantoco scion Rica Lopez de Jesus, who told BusinessWorld about the ham. Delightfully salty and with a fatty goodness, she said, “This is in-between,” noting that it occupies a space between jamon serrano and the more special jamon iberico de bellota. “It’s about as good as a bellota,” she said, but with a lower price. It is, of course, available in Rustan’s.

“We want everyone to be able to serve Spanish food in an easy way,” she said. This explained delicacies like Cortijode Sartanejas sauces, Naturel sustainable olive oil, Almoharin figs from Good Fig, and luxury canned seafood from Ubago. But then, there were also paelleras from Garcima, artisanal ceramic cookware from Graupera, and kitchen gadgets from Nerthus.

Casa Española and all its trimmings are available at Rustan’s Makati’s fourth floor until Aug. 31. Meanwhile, the East Cafe at Rustan’s Makati is also serving Spanish treats until Aug. 31, including Crispy Croquetas Ricas (soft Hainanese Chicken Croquetas with Ginger Aioli), garlicky Gambas with Angulas, slow cooked Iberico Shoulder with Korean Barbecue Glaze, and Iberico Burger Loco Moco Don. — JL Garcia

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