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NEDA aims to release new PDP before December

PHILIPPINE STAR/ MICHAEL VARCAS

THE NATIONAL Economic and Development Authority (NEDA) is working to fast-track the submission of the Philippine Development Plan (PDP) 2023 to 2028 before its deadline in December, an official said.

“We’ll see how we can fast-track,” NEDA Undersecretary Rosemarie G. Edillon told reporters on Monday.

In his first State of the Nation Address on July 25, President Ferdinand R. Marcos, Jr. told NEDA to come up with the new PDP not later than yearend.

Socioeconomic Planning Secretary Arsenio M. Balisacan on Monday said that the overall goal of the next PDP is reinvigorating job creation and poverty reduction.

He said they will focus on the full reopening of the economy; more investments in human capital, social development, and social protection; and the transformation of production sectors “to generate more and quality jobs and competitive products.”

“We are changing the way our labor market responds to growth. That is, we are not just creating more jobs but we tend to improve the quality of jobs by looking at those sectors that have high potentials for generating high-quality jobs,” Mr. Balisacan said, citing manufacturing, tourism, services, creatives, and agriculture industries.

For agriculture, Mr. Balisacan said “we will work toward[s] improving a yield or profit-per-hectare indicators in the farm sectors. That way we can reduce the pressure on prices for our population, as well as our industries.” 

Global commodity prices have surged in recent months due to the ongoing Russia-Ukraine war and supply chain disruptions. Prices of wheat and fertilizer have soared amid tight global supply, putting pressure on the domestic agriculture industry.

Inflation stood at 6.4% in July, bringing the seven-month average to 4.7%.

The government set its inflation rate assumption to 4.5-5.5% for 2022, reflecting the impact of soaring transport, fuel, and food expenses.

The PDP serves as the government’s overall guide in development planning. The new PDP being created by the NEDA is also anchored in an 8-point socioeconomic agenda that includes ensuring food security, reducing transportation and logistics costs, and bringing down the high cost of power.

The near-term agenda also includes mitigating the scarring impact of the pandemic by addressing learning losses and strengthening social protection, as well as ensuring sound macroeconomic fundamentals by improving bureaucratic efficiency.

The PDP coincides with the government’s medium-term fiscal strategy which aims to attain 6.5-7.5% gross domestic product (GDP) growth this year, and 6.5-8% next year until 2028.

GDP growth averaged 7.8% in the first half, with Mr. Balisacan saying that the economy needs to grow by 7.2% for the remainder of the year to reach the upper end of the target. — Diego Gabriel C. Robles

Sia’s listed firms post double-digit profit growth

By Justine Irish D. Tabile

THREE listed companies chaired by businessman Edgar J. Sia II reported on Monday double-digit profit growth in the first semester led by his retail store operator MerryMart Consumer Corp., which nearly doubled its earnings during the period.

Real estate firm DoubleDragon Corp. posted a 29% increase in its consolidated net income to P1.2 billion for the six months ended June as revenues rose by 26.8% to P3.41 billion.

In a press release, Mr. Sia said the company’s equity “that consists generally of a string of diversified titled hard real estate assets located in prime and strategic locations nationwide continue to appreciate as years go by.”

Its consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) went up by 32% to P2.07 billion.

To date, the company has 1.2 million square meters of completed gross floor area all over the country.

“We expect this portfolio of hard assets to all mature and generate the optimum level of recurring income production before 2025,” Mr. Sia said.

The company is preparing for the planned real estate investment trust listing of its CentralHub industrial warehouse portfolio, which will commence once market conditions improve.

In the last quarter of the year, DoubleDragon plans to construct Hotel 101 – Niseko in Hokkaido, Japan.

“We believe that DoubleDragon’s current overall healthy financial position during this extended economic crisis puts it in a good position to grow and strengthen even more significantly once the next boom cycle starts,” DoubleDragon Chief Investment Officer Hannah Yulo-Luccini said.

Meanwhile, DDMP REIT, Inc. registered a P1.06-billion core net income in the first six months, higher by 17% than last year’s.

Its revenues went up by 2.9% to P1.23 billion while its rental income climbed by 7.6% to P1.14 billion in the first half.

DDMP, which invests in income-generating real estate, ended the semester with its total assets and equity increasing by 0.2% to P50.30 billion and to P41.04 billion, respectively.

Its board of directors approved a cash dividend to all shareholders amounting to P486.7 million or P0.03 per share with the payment date on Sept. 26, 2022.

“We are glad for the many positive economic indicators that are recently signaling a new economic cycle post the COVID-19 (coronavirus disease 2019) pandemic, post the peak of Ukraine war tensions, and post the generally peaceful Philippine election. These past few weeks, we have felt the buildup of fresh new tenant inquiries, ongoing negotiations and increased activities of the existing office and retail tenants,” Mr. Sia said.

MerryMart, which has several retail formats, posted a net income of P32.25 million in the first half, almost double from a year ago, driven by its acquisitions of Carlos SuperDrug and Cecile’s Pharmacy.

The group is keeping its eyes open for similar partnerships and acquisitions within traditional and technology consumer sectors.

MerryMart’s topline increased by 55.9% to P2.88 billion in the semester while its EBITDA climbed to P99.45 million, a 62.5% increase from last year.

Mr. Sia said the company “is well on its way to exceed the P5-billion revenue mark this year, more than double the company’s revenue numbers two years ago when it filed for [an initial public offering].”

He said the “next immediate goal” for the retail group is to double the figure “to reach our next milestone target,” which he disclosed as reaching the P12-billion revenue mark.

The company is set to launch an application called “MM Wholesale App” that will be available on iOS and Android devices.

The application will offer next-day delivery within Metro Manila, Bulacan, Rizal, Laguna, and Cavite along with free delivery for purchases amounting to P10,000 and above. It will have a point system that customers can use “good as cash” on their next purchase.

“One main feature of the App is its live inventory ability. Whatever you see in the App is physically in our warehouse which means 99% of the time you will receive exactly what you ordered,” Mr. Sia said.

The application will feature over 5,000 household essential SKUs (stock keeping units) priced 15% lower than retail prices.

By 2030, MerryMart aims to have a total of 1,200 branches nationwide and to generate P120 billion in system-wide recurring consumer sales revenue.

On the stock market on Monday, DoubleDragon shares went down by 1.05% or P0.08 to P7.51 apiece, DDMP shares climbed by 1.99% or P0.33 to P1.54 apiece, and MerryMart went up by 6.21% or P0.06 to P1.54 apiece.

Villar-led companies post lower income

JUDGE FLORO

THREE Villar-led companies — Golden MV Holdings, Inc., AllHome Corp., and AllDay Marts, Inc. — reported lower earnings in the second quarter as their revenues declined.

Golden MV posted a lower attributable net income of P259.35 million in the second quarter, down 6.5% from last year’s P277.41 million. This is a 39.4% decline from the P428.18 million recorded income in the earlier quarter.

Revenues were also lower, totaling P1.03 billion, a 14.6% decline from P1.2 billion last year.

Year to date, the company’s income was a bit higher at P687.52 million, or 4.6% more than the P657.59 million recorded last year.

Its first-half topline was lower by 6.1% to P2.57 billion from the P2.74 billion generated a year ago.

AllHome registered a 15.7% decline in second-quarter net profit to P250.02 million from the previous year’s P296.76 million. This is a reversal from the recorded net loss of P27.91 million in the first quarter.

The company’s topline fell by 3.4% to P3.03 billion from the P3.13 billion recorded last year.

Year to date, its profit was almost three times lower at P222.11 million, down from P640.97 million in the previous year.

Its first-half top line was also lower at P6.27 billion, a 6.8% decline from P6.72 billion last year.

AllDay Marts posted a net profit of P87.21 million in the second quarter, 19.5% lower than the previous year’s P108.32 million.

This is a complete reversal from last quarter’s P75.58-million net loss.

The company’s sales slipped by 2.5% to P2.3 billion from the P2.36 billion a year ago.

Year to date, the company’s profit declined 93.5% to P11.63 million from P179.64 million in the previous year.

Meanwhile, its first-half topline climbed by 2.2% to P6.27 billion from P4.49 billion last year.

On Monday, Golden MV shares closed unchanged at P670 apiece; AllHome shares went down by 0.56% or P0.03 to P5.33 each; and AllDay stocks climbed by 2.78% or P0.01 to P0.37 apiece. — Justine Irish D. Tabile

Ayala Corp. president and CEO takes leave of absence

FERNANDO Zobel de Ayala has taken a temporary medical leave of absence as Ayala Corp.’s president, chief executive officer (CEO) and vice-chairman of the board, the listed conglomerate said on Monday.

“He remains a member of our Board but has stepped down as member of our Executive Committee and Finance Committee,” the company said in a disclosure on Monday.

Ayala’s Corporate Governance and Nomination Committee endorsed Cezar “Bong” P. Consing for the posts and was elected as acting president and chief executive officer by the company’s board of directors at a meeting held on Aug. 14.

Mr. Consing has been a director of Ayala since December 2020. He is also a director of Bank of the Philippine Islands (BPI), Globe Telecom, Inc., and ACEN Corp.

He was a senior managing director of Ayala and president and CEO of BPI from 2013 to 2021.

Mr. Consing also served as chairman and president of the Bankers Association of the Philippines and as president of Bancnet, Inc.

Meanwhile, the company’s board elected Delfin “Del” L. Lazaro to take Mr. Zobel’s post as the vice-chairman of the executive committee.

Mr. Lazaro has been a non-executive director at Ayala since January 2007. He is a director at Integrated Micro-Electronics, Inc., Globe Telecom, and an independent director at Monde Nissin Corp.

He is also an independent adviser to the board of directors of Ayala Land, Inc. and a member of the BPI advisory council.

“I want to assure everyone that Fernando is in high spirits, but he has asked for some time to focus on his health and recovery,” Ayala Chairman Jaime Augusto Zobel de Ayala said in a Facebook post on Monday.

“Let us all give Fernando the support he needs to focus on improving his health, and Bong and Del our confidence as they take on their new roles,” he added. — Justine Irish D. Tabile

Globe’s credit profile seen to improve over next 6-9 months

GLOBE Telecom, Inc.’s credit profile is expected to improve over the next six to nine months, financial research firm CreditSights, Inc. said, citing the company’s “improving credit story.”

“We see potential for Globe’s deleveraging and capex (capital expenditure) funding buffer to enlarge from recently approved P32-billion equity rights offering (and) P80-90-billion tower sale…, (which) is expected to be completed by (the end of the year),” CreditSights said in its latest outlook report for Globe.

With these developments, the research firm anticipates “further improvements in Globe’s credit profile over the next six-nine months.”

Globe announced on Friday last week that it signed two sale and leaseback agreements for 5,709 telecom towers and related passive telecom infrastructure for over P71 billion.

It said that P53.5 billion of the proceeds will be used for capex and other major infrastructure expansions, with the remaining P17.7 billion going toward debt servicing.

“The first portfolio being sold consists of 2,180 telecom towers in Luzon, which will be acquired by MIESCOR Infrastructure Development Corp. for a total consideration of P26 billion, and leased back to Globe for an initial period of 15 years,” the Ayala-led company said in a statement.

The expected pre-tax transaction gain from the first portfolio will be P10.6 billion.

The second portfolio consisting of 3,529 towers will be sold to Frontier Tower Associates Philippines, Inc. for P45 billion, and also leased back over an initial period of 15 years. Pre-tax gain will be P15 billion.

It is in “advanced discussion” with another tower company for the sale and leaseback of an additional 1,350 telecom towers and related passive telecom infrastructure.

“We maintain our outperform recommendation on Globe, as we believe that its modest… growth and credit profile improvement prospects should cushion the credit risks from its sizable (2022) capex,” CreditSights said.

“Valuations are currently attractive in our view too.”

Outperform, according to finance website Investopedia, means “the company will produce a better rate of return than similar companies, but the stock may not be the best performer in the index.”

“We believe Globe’s hefty (2022) capex of P89 billion is sufficiently funded for, which should reduce the need for additional debt incurrence,” CreditSights added.

According to the research firm, its report is for informational purposes only. “Neither the information contained in this report, nor any opinion expressed therein is intended as an offer or solicitation with respect to the purchase or sale of any security or as personalized investment advice.”

Globe Telecom shares closed 3.57% higher at P2,320 apiece on Monday. — Arjay L. Balinbin

Gotianun firms’ net income declines

GOTIANUN-LED Filinvest Development Corp. (FDC) reported a 34.2% decline in its attributable net income to P1.47 billion in the second quarter after incurring high operating costs and expenses.

The company’s topline was up by 20.1% to P16.24 billion in the second quarter from the recorded P13.52 billion last year.

FDC’s costs were up by 31.7% in the second quarter to P6.74 billion while its expenses rose by 12.2% to P8.25 billion.

In the first half, FDC’s net income went down by 47% to P2.23 billion from P4.2 billion last year.

Its revenues, however, went up to P30.81 billion, an 11.2% increase from last year’s P27.7 billion.

“Core revenues registered a year-on-year growth of 11.2% […],  largely contributed by the core revenue increase in real estate segment, hospitality business and power and utility operations,” the company said in its quarterly report on Monday.

Its subsidiary, Filinvest Land, Inc. (FLI), registered a P526.98-million attributable net income for the three months ended June, 39.3% lower than P868.11 million a year ago.

FLI’s total revenue amounted to P4.67 billion in the second quarter, higher by 16.2% than the P4.02 billion last year.

Its costs from real estate sales went up by 6.3% to P1.79 billion while costs from rental services were up by 20.5% to P687.46 million.

Operating expenses were also up, with selling and marketing expenses amounting to P298.74 million and general and administrative expenses totaling P518.89 million.

Year to date, FLI’s net income slipped to P1.2 billion, 54% lower than year-ago’s P2.62 billion.

On the stock market on Monday, FDC shares went down by 0.99% or P0.07 to P7 apiece while FLI shares ended unchanged at P0.93 apiece. — Justine Irish D. Tabile

Chelsea losses shrink as business segments’ revenues grow

CHELSEA Logistics Infrastructure Holdings Corp. managed to trim its attributable net loss for the second quarter of the year to P587.63 million from P727.09 million previously, as revenues improved amid increased economic activities.

Total revenues for the second quarter climbed 65.3% to P1.61 billion from P975.96 million previously, Chelsea Logistics’ second-quarter financial performance results showed.

“All business segments reported positive revenue growth during the quarter, particularly the passage segment,” the company said.

For the first half, the company’s attributable net loss was reduced to P1 billion from a loss of P1.07 billion in the same period a year ago.

Revenues for the first six months improved 36.6% to P2.91 billion from P2.13 billion previously.

“We are very encouraged by our Q22022 (second-quarter 2022) results with substantial improvements in revenues, especially for the passage segment,” Chelsea President and Chief Executive Officer Chryss Alfonsus V. Damuy said.

“Despite increases in our costs, the strong growth in our revenues was able to narrow our losses on a year-to-date basis,” he added.

Chelsea and its three shipping lines, Starlite Ferries, SuperCat, and Trans-Asia, recently launched Chelsea Travel, a unified online booking system for passengers.

The application will “further accelerate the recovery of our passage business,” Mr. Damuy said.

The group also plans to launch a loyalty application to provide freebies and rewards.

Chelsea Logistics shares closed 0.85% higher at P1.18 apiece on Monday. — Arjay L. Balinbin

PetroEnergy net income surges 39%

YUCHENGCO-LED PetroEnergy Resources Corp. posted an attributable net income of P178.23 million in the second quarter, a 39.1% increase from P128.16 million a year ago.

In its financial report filed with the stock exchange, second-quarter revenues stood at P720.96 million, 13.1% higher compared with P637.62 million in the same period last year.

In the first semester, the company’s attributable net profit increased by 51.5% to P355.19 million from P234.45 million. Revenues stood at P1.37 billion, up 11.4% from P1.23 billion last year.

In a media release, the company attributed its “robust financial performance” in the first half largely to the rise in global crude oil prices and higher offtake sales for PetroSolar Corp.’s Tarlac-2 solar power plant.

It said crude oil prices in the international market averaged at $111.26 per barrel from $64.63 per barrel previously.

PetroEnergy said that it derived the bulk of its revenues from electricity sales of the renewable energy (RE) power plants by operating units of its RE holding firm PetroGreen Energy Corp.

The company said its income drivers included the 32-megawatt (MW) Maibarara geothermal project by Maibarara Geothermal, Inc., the 70-MW Tarlac solar project by PetroSolar, and the 36-MW Nabas-1 wind project by PetroWind Energy, Inc.

Oil revenues from its minority stake in the Etame oil concession in offshore Gabon, West Africa also provided the balance of steady revenues for the company.

In July, PetroEnergy declared a 5% cash dividend or P0.05 per share to all its stockholders of record as of Aug. 15.

On Monday, shares in the company jumped by 4.04% or P0.20 to finish at P5.15 apiece on the stock exchange.

Cebu office market now stable — JLL

THE office market in Metro Cebu is now stable, driven mainly by demand from information technology-business process management firms, according to JLL Philippines.

“The market is stable but there is uneven performance in the office sector, wherein there has been a mix of stability and lackluster performance across indicators,” JLL Philippines Head of Research and Strategic Consulting Janlo C. de los Reyes said in a statement.

Office leasing volumes in Metro Cebu reached 23,825 square meters (sq.m.) in the second quarter.   

“Information technology and business process management (IT-BPM) firms continue to drive leasing activity, accounting to 67.3% as of the first half of 2022, while non-IT-BPM industries such as publishing, finance and banking, maritime technology, and engineering and architecture account for a cumulative 32.7%,” JLL Philippines said.   

IT-business process outsourcing (BPO) companies accounted for 4,600 sq.m. of move-ins in Cebu IT Park, and 4,300 sq.m. of move-ins in Cebu Business Park.

JLL Philippines noted that office pull-outs declined by 79.25% in the first half of 2022 from the second half of 2021.   

“Pull-outs have slowed down to around 9,872 sq.m., where we saw around 2,300 sq.m. BPO pull-out and 800 sq.m. corporate pull-out,” Mr. De los Reyes said.

The vacancy rate has eased to around 21.9%, from a peak of 23.7% in the fourth quarter of 2021.

“We saw the improvement from Cebu IT Park while Cebu Business Park registered an uptick,” he added.

However, Mr. De los Reyes noted “weak precommitment” levels in Metro Cebu, with most of upcoming office stock still vacant.

He noted office rentals will likely remain soft “owing to supply pressure from the sizeable volume of unoccupied future stock.”

Office rental rates were unchanged at P632 per sq.m. per month.

Meanwhile, the logistics market in the country is expected to see “exponential growth,” hitting 3.06 million sq.m. by 2025 and 4.80 million sq.m. by 2030 for Grade A and B logistics facilities, JLL Philippine said.

“The logistics market in the Philippines is still in the early stages of growth, and there’s positive sentiment in a growing market,” Charlie McNaught, JLL Philippines director for logistics and industrial, said.

Demand is driven by the “seismic shift” in consumer spending, as many have shifted to e-commerce platforms during the pandemic.

“There is an opportunity to introduce Grade A logistics to meet the demands of occupiers, as a lot of them improve their supply chain models and become more conscious of their ESG (Environmental, Social, and Governance) commitments,” Mr. McNaught said. — R.M.D.Ochave

Apex Mining earnings surge to P917M

APEX Mining Co., Inc. reported on Monday that its second-quarter net income surged by 337.1% or more than quadrupled to P917.64 million from P209.94 million the year before.

“This consolidated quarter net income is an all-time high for Apex Mining. We consistently look at maximizing revenue through increased production output and minimizing cost through prudent spending,” Apex Mining President and Chief Executive Luis R. Sarmiento said.

In its unaudited quarterly report, Apex Mining said its total revenues climbed to P2.54 billion, or higher by 65% from P1.54 billion in 2021.

Its Maco mine’s gold production climbed by 14% to 23,715 ounces (oz.) in the second quarter while its silver output rose by 29% to 99,645 oz.

Total tons milled in the second quarter rose by 15% to 197,891. Consolidated ounces sold for gold and silver were higher by 48% and 8%, respectively, to 24,083 oz. and 94,234 oz.

“In the second quarter, metal prices were higher by 3% for gold but lower by 17% for silver,” Mr. Sarmiento said, adding that the peso “was also weaker [but] our sound fundamentals protect us from shocks.”

In the second quarter, the firm said it began the construction of its accommodation facility for its employees in Brgy. Nueva Visayas in Mawab, Davao de Oro.

“Our employees are our greatest resource and we continue to prioritize their well-being. This new accommodation facility will provide better amenities for our hardworking miners,” Mr. Sarmiento added.

At the stock exchange on Monday, Apex Mining shares rose by 5% or eight centavos to close at P1.68. — Luisa Maria Jacinta C. Jocson

Savya now ready for occupancy

By Patricia B. Mirasol, Reporter

SAVYA Financial Center, the first green office development in ARCA South, Taguig City, is now ready for occupancy.

A project of Arthaland Corp. in partnership with Japan’s Mitsubishi Estate Co., Ltd., the building offers 59,868 square meters (sq.m.) of gross leasable office area.

Savya Financial Center uses contactless technology, such as touchless turnstiles and RFID (radio frequency identification)-equipped elevators. It also uses energy-efficient lighting and air-conditioning, double-glazed low-E glass, low-flow plumbing fixtures, and a rainwater harvesting and recycling system.

“It’s not easy being green, but Arthaland does it. We are always quadruple-certified,” Anna B. Marco, Arthaland’s commercial project channel director, said in an Aug. 11 media tour. “We want to be the ideal and preferred choice for both international and global locators, especially those who now value very much their sustainability scoring.”

The financial center, whose name is of Sanskrit origin and means “south,” has been pre-certified for Leadership in Energy and Environmental Design Gold Certification. It is on-track for the Philippine Green Building Council’s BERDE Certification, International WELL Building Institute’s WELL™ Building Standard, and the International Finance Corp.’s Excellence in Design for Greater Efficiencies Advanced Certification.

To encourage a sustainable lifestyle, the building has basement bicycle racks and shower facilities as well as a rooftop Potager garden, whose produce will be available to tenants.

“The provision of bike racks and accessible stairwells allow more movement for employees, creating a more active and dynamic work environment,” said Antonio G. Sabarre, a local director at JLL Philippines.

Tenants have an exclusive e-shuttle service to and from key pick-up and drop-off points across the greater Manila area, Mr. Sabarre added.

Savya, which is 60% sold, has a headline rental rate of P800 per sq.m.

Buyers have the option to lease under Arthaland’s Consolidated Leasing Solutions, starting at 100 sq.m.

JLL is the exclusive leasing agent of Savya Financial Center.

Vivant income slips by 23.5%

CEBU-BASED Vivant Corp. reported on Monday that its second-quarter attributable profit dropped by 23.5% to P416.88 million in the second quarter from P544.67 million in the same period last year.

In its quarterly report filed to the stock exchange, Vivant said that its revenues stood at P1.59 billion, up 3% compared with P1.64 billion in the same period last year.

Vivant’s year-to-date attributable net income was recorded at P452.02 million, down by 34.2% year on year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also went down by 28% year on year to P892.87 million due to a spike in the cost of generation cost, on the back of increased dispatch in 65%-owned Isla Norte Energy Corp. and the higher cost of purchased power of Corenergy Inc. as energy sales volume went up.

Vivant, through its subsidiaries and affiliates, has interests in power generation, power distribution, and the retail electricity supply business.

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