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Wilcon income up 17% despite lower sales

WILCON Depot, Inc.’s net income for the third quarter rose by 16.7% to P622.14 million, higher than the P533.21 million logged in the same period last year despite net sales inching down because of mobility restrictions imposed during the quarter.

In a disclosure to the exchange on Wednesday, the listed home retailer reported a 1.9% dip in net sales to close the quarter with P6.62 billion from P6.75 billion year on year “in view of the almost two months of mobility restrictions as the Philippines recorded the highest number of daily cases, so far since the pandemic started.”

Wilcon’s comparable sales for the quarter also declined by 9.3%.

Meanwhile, gross profit for the three-month period amounted to P2.52 billion, up by 8.8% from P2.31 billion. The company’s gross profit margin rate stood at 38%.

“Hopefully, with the easing of restrictions as COVID-19 (coronavirus disease 2019) cases decline, our customers will be able to finish or start their home improvement projects in time for the Christmas holidays,” said Lorraine Belo-Cincochan, president and chief executive officer of Wilcon.

“We’re looking forward to a better fourth quarter,” she added.

Wilcon launched two depots in the third quarter, while a total of six depots were opened in the nine-month period ending September. This led to a 10% increase in operating expenses for the third quarter to P1.78 billion, while the nine-month total was up by 16.7% to P5.17 billion.

“To date, seven depots and one Home Essentials have been opened with the last two branches, one Home Essentials and one depot, opening back to back on [Oct. 15],” the company said.

Wilcon plans to open a total of nine new depots this year and one Home Essentials branch. The company spent P1.848 billion for capital expenditure projects by the end of the third quarter.

For the nine-month period, Wilcon generated P1.87 billion in net income, surging by 111.1% from last year’s P885.57 million “driven by higher net sales and gross profit margin partly offset by increased operating expenses.”

Sales climbed 27% in the three quarters to P20.05 billion compared with last year’s P15.79 billion, owing to the “generally uninterrupted operations” in Luzon stores. Comparable sales also went up by 16.9%.

The company’s gross profit for the nine-month period totaled P7.43 billion, improving by 36.7% from P5.44 billion year on year, which resulted in a gross profit margin rate of 37.1%.

On Wednesday, Wilcon shares at the stock market rose 6.21% or P1.85 to close at P31.65 apiece. — Keren Concepcion G. Valmonte

FAST Coldchain aims nationwide presence, investing P2 billion

FAST Logistics Group announced on Wednesday its entry into the cold chain sector, with the opening of its cold chain hubs in Cebu and Cavite.

The group launched the “Fresh by FAST” brand with the goal of offering an integration of refrigerated transport, cold storage for frozen and chilled temperatures, value-added services such as blast freezing, meat processing, packaging, and dry warehousing for related items that do not require refrigeration.

“When it came to the choice of where to put our first major investment in the cold chain, it is no accident that we chose Cebu. The Group considers Cebu our home, where our businesses in shipping and logistics took root many decades past,” FAST Logistics Group President and Chief Executive Officer William B. Chiongbian II said at a virtual press conference.

“So, I’m also announcing today the inauguration of the FAST Coldchain Hub in North Cebu, an integrated facility with more than 10,000 pallet positions,” he added.

The facility will serve fresh meat processors, importers, local producers, fruits and vegetable retailers, quick service restaurants, and pharmaceuticals, among others.

In July, the group opened its cold chain hub in Cavite to serve businesses in Luzon.

“These two hubs, plus the ones we manage for our principals, will bring our cold chain footprint to at least 30,000 pallet positions,” Mr. Chiongbian said.

“This is an expansion to our warehouse management footprint of more than 1.2 million square meters for dry storage,” he added.

The group is also looking at other locations to realize its vision of “a leading presence in cold chain nationwide,” on which it plans to spend P2 billion over the next two years.

Anthony S. Dizon, president of the Cold Chain Association of the Philippines, said: “We hail the entry of the FAST group into the cold chain as a timely, appropriate and well positioned move to expand into integrated logistics.”

“The cold chain industry will continue to grow nationwide at a rate of 8% to 10% annually over the next five years, largely driven by population growth, shifting consumer preferences for frozen products, and access to regional export markets with the opening of the Association of Southeast Asian Nations (ASEAN) economic community,” he also noted. — Arjay L. Balinbin

Keeping kitchens streamlined

GERMAN kitchen manufacturer SieMatic recently launched the Pure SLX Kitchen in the Philippines. The line continues the brand’s hands-free design concept, introduced in 1960, and the minimalist principle of the SieMatic Pure style collection (2019).

The SieMatic SLX kitchen concept received the German Design Council’s German Design Award 2021. The same kitchen concept also received the Iconic Award 2020: Innovative Interior as “Best of Best,” the iF Design Award 2020, and the Red Dot Design Award 2020.

“Siematic invented the first ever handle-free kitchen in the year 1960. Over the years, many manufacturers caught up on this trend. And this style has been, now becoming one of the most popular styles worldwide,” said Volker Betsch SieMatic Sales Director handling Asia Pacific, Middle East, India, and Africa, during an online press launch on Oct. 21.

“We believe it’s a beautiful design that really elevates the kitchen, the living space. Hopefully, we will see [the SLX] in the coming years in many Filipino homes and have a good chance with the market to develop this even further in the future,” Mr. Betsch said.

The Pure SLX Kitchen has four key concepts: weightlessness, light, feel, and transparency.

The idea of “weightlessness” is seen in the drawers which are mounted to the back panel of glass cabinets to suggest an effect of floating. The drawers are built with mitered edges that appear practically seamless when closed.

The SLX island countertop is 6.5mm thick, which is five times thinner than the standard countertop in the industry. The countertop is illuminated from underneath to enhance the illusion of suspension.

Light in the SLX kitchen is used to emphasize the kitchen’s balanced proportions and sleek lines. Its temperature and brightness can also be controlled individually, allowing users to experience a different atmosphere in the kitchen with a slight adjustment of the light settings. It can be made dimmer for a more dramatic feel and brighter for a more vibrant mood.

For the “feel” concept, the kitchen’s recessed grip was completely redesigned as ribbed and concave for a haptic experience. For the idea of “transparency,” the design features transparent doors and panels, and minimal frames. The SLX glass cabinets are designed to seemingly link the kitchen to the living room.

To visit the SieMatic Manila showroom, interested parties have to book their on-site or virtual design consultation via siematic-philippines.com/contact-us. For more information, visit siematic-philippines.com/SLX. — MAPS

Vitarich to acquire shares in poultry firm

VITARICH CORPORATION FACEBOOK PAGE

LISTED VITARICH Corp. is set to acquire the shares of Luzon Agriventure, Inc. (LAVI) in local poultry firm Barbatos Ventures Corp. (BVC) in a bid to expand its income sources.

The company said in a stock exchange disclosure on Wednesday that its board of directors approved the terms of a memorandum of understanding (MoU) between Vitarich and LAVI for the acquisition of the BVC shares held by the latter.

Vitarich said BVC is a private domestic company engaged in poultry production, as well as the processing, raising, and breeding of chickens.

“The transaction is seen to have financial benefits to Vitarich in terms of additional source of income and additional cost savings, with minimal impact on cash flow,” the company said.

“It is also consonant to Vitarich’s plan for improving and ramping up production of dressed chicken and other products for its hotel, restaurant and institutions (HRI) clientele,” it added.

Under the MoU, Vitarich said the acquisition of BVC shares held by LAVI will have conditions such as the conduct of prior diligence and subsequent fairness opinion; consideration subject to actual appraisal value of the business capped at P45 million; payable in installments over three years from 2022 up to 2024; and compliance with regulations of the Securities and Exchange Commission and the Philippine Stock Exchange.

“Should the conditions be fully satisfied and the acquisition of BVC shares eventually materialize, BVC will become a subsidiary of Vitarich,” the company said.

It said the implementation of the MoU consists of three phases, namely: valuation; transfer of ownership and possession of shares; and installment payment. The first phase will commence as soon as the MoU is signed and executed by Vitarich and LAVI, it added.

Sought for additional comment, Vitarich Assistant Corporate Secretary Mary Christine Dabu-Pepito told BusinessWorld via e-mail interview that the company is in discussions to acquire 100% of LAVI’s stake in BVC.

Ms. Dabu-Pepito added that the actual value of the planned acquisition has yet to be determined.

“It is (still) subject to the first two conditions indicated in the disclosure — specifically, the results of Vitarich’s due diligence review and assessment of the fairness of the actual appraisal value, not to exceed a ceiling price of P45 million,” Ms. Dabu-Pepito said.

According to its website, Vitarich is engaged in the business of producing hog, poultry, and other specialty feed requirements.

On Wednesday, shares of Vitarich at the stock exchange rose 4% or three centavos to finish at 78 centavos each. — Revin Mikhael D. Ochave

Christmas ham comes early

A READY-TO-EAT Christmas ham is already available in several Seda Hotel outlets —  though why wait for the holiday to enjoy it?

The hams were conceptualized a few years back by Seda Hotels Executive Chef Romualdo “Pepe” Castillo and Seda Hotels’ senior group general manager Andrea Mastellone as Christmas hamper fillers and corporate gifts. The project started out with a few hundred hams, but recently this increased to as many as 10,000 hams.

In a mixture of English and Filipino, Mr. Castillo said that people who used to order his ham said that their neighbors, relatives, and grandparents whom they had given hams to just couldn’t forget them.

During a press conference last week, Mr. Castillo talked about what goes into making his ham. Still, most of it was kept secret: the only thing Mr. Castillo revealed was that it is made from organic pigs not more than seven months old.

The pork, he said, is brined for a week in a special mixture, then carefully massaged every three hours to ensure the even absorption of flavors. It is then steamed and boiled with more secret ingredients before it is molded. Finally, it is glazed with the subtle flavors of freshly squeezed oranges, pure Palawan honey, and a sprinkling of sugar before being blow-torched to seal in all that goodness.

Asked about the proper way to prepare it, he said that it’s ready-to-eat, “like cold cuts.” As for baking and frying instructions, he says, “Init lang (just heat it).” Proud of his creation, he says, “It’s perfect (on its own).”

Seda Residences Makati Marc Cerqueda noted that Seda’s holiday ham is best savored with fine wines such as a dry pinot grigio or a rose. Consumed without its sauce, it goes well too with a pale Pilsen beer.

And for other ways to enjoy ham, Seda Nuvali hotel manager Armand Angeles suggests Japanese croquettes, no-bake frittata, and Seda ham humba (stewed park); while Seda Central Bloc Cebu hotel manager Ron Manalang says in Cebu, deep-fried cuapao (a type of stuffed steamed bun) is a perfect match with the Seda ham.

The ham lasts for six months in the freezer, though Mr. Mastellone warned, “If you open it, it lasts for a few minutes!” Not so much due to the ravages of time, but by ravenous hands.

The ham costs P1,500 for 1.1 kg (except in Cebu, where it costs P1,100).  Orders are now being accepted at Seda BGC, Seda Vertis North, Seda Residences Makati, Seda Nuvali, and Seda Central Bloc Cebu. — JL Garcia

MPTC steps up operations for ‘Undas’ due to expected higher traffic volume

METRO Pacific Tollways Corp. (MPTC) on Wednesday said its toll roads will step up their operations due to the expected higher traffic volume during Undas (All Saints’ Day and All Souls’ Day).

MPTC will “boost customer services and safety protocols” along North Luzon Expressway (NLEX), Subic–Clark–Tarlac Expressway (SCTEX), Manila–Cavite Expressway (CAVITEX), Circumferential Road 5 (C5) LINK, and Cavite–Laguna Expressway (CALAX) from Oct. 29 to Nov. 2, the company said in an e-mailed statement.

“Construction and lane closures along the mainline road of all MPTC expressways will be suspended from Oct. 27 until Nov. 2 unless safety repairs are necessary,” it noted.

“For those traveling with Class 1 or light vehicles, free 24-hour towing service to the nearest exit will be available from Oct. 29, 6 a.m. to Nov. 2, 6 a.m.”

With the implementation of the more relaxed Alert Level 3 in the National Capital Region, the company expects the average daily traffic along CAVITEX, C5 LINK, and CALAX to increase around 11% to 15%.

Traffic volume is expected to increase by 10% along NLEX and SCTEX.

The company encouraged motorists to use its cashless payment system to avoid queues at the cash lanes.

“We remain committed to provide our motorists with ease of travel, ensure their safety, and assist them immediately this season as we also continue to observe [the coronavirus] protocols for the protection of our customers and employees,” MPTC President and Chief Executive Officer Rodrigo E. Franco said.

MPTC is the tollways unit of Metro Pacific Investments Corp., one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

Yields on BSP’s term deposits mixed on deficit, dovish Fed

BW FILE PHOTO
YIELDS on the central bank’s term deposits were mixed after the release of data showing the government posted a wider budget deficit in September. — BW FILE PHOTO

YIELDS on the central bank’s term deposits were mixed on Wednesday as the government posted a wider budget deficit in September and as the US Federal Reserve chief said they could keep rates untouched to support the labor market.

Demand for the term deposit facility (TDF) of the Bangko Sentral ng Pilipinas (BSP) amounted to P548.928 billion, higher than the P480-billion offer but failing to beat the P585.627 billion in tenders seen a week earlier.

Broken down, the seven-day term deposits fetched bids amounting to P176.65 billion, surpassing the P160 billion auctioned off by the BSP but much lower than the P239.493 billion in tenders logged in the previous week’s offering.

Accepted rates for the tenor ranged from 1.7% to 2%, wider than the 1.7% to 1.78% band logged a week ago. This caused the average rate of the one-week deposits to slip by 1.66 basis points (bps) to 1.7521% from 1.7355% previously.

Meanwhile, demand for the two-week deposits amounted to P372.278 billion, higher than the P320-billion offer as well as the P346.134 billion seen in the previous auction.

Banks asked for yields from 1.73% to 1.8%, narrower than the 1.7195% to 1.82% range seen last week. This caused the average rate of the paper to dip by 0.22 bp to 1.7723% from the 1.7745% quoted on Oct. 20.

The BSP has not offered 28-day term deposits for more than a year to give way to its weekly offerings of bills with the same tenor.

The term deposits and the 28-day bills are used by the BSP to gather excess liquidity in the financial system and guide market rates.

“The TDF auction results reflect market participants’ search for yield in the longer tenor amid sustained stable market conditions, supported by ample liquidity in the financial system,” BSP Deputy Governor Francisco G. Dakila, Jr. said.

TDF yields were mixed on Wednesday following the budget deficit data released earlier this week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The government’s budget deficit widened by 30% to P180.9 billion in September from P138.5 billion a year earlier, as spending outpaced the pickup in revenues, data released by the Bureau of the Treasury on Monday showed.

For the first nine months of 2021, the fiscal gap reached P1.1 trillion, higher by 29.56% from the same period a year ago.

The market also factored in comments from Fed Chairman Jerome Powell, who said they could keep rates near zero even when they start tapering their bond purchases, Mr. Ricafort added.

Mr. Powell’s view is high inflation will likely subside in 2020, Reuters reported. Meanwhile, he said the Fed’s full employment goal could be met next year, if supply constraints ease as expected and if the service sector creates more jobs.

“I do think it’s time to taper. I don’t think it’s time to raise rates. We think we can be patient and allow the labor market to heal,” Mr. Powell said at a virtual appearance on Friday.

The Fed is expected to begin reducing its pandemic-driven asset purchases by next month. — L.W.T. Noble with Reuters

Dining In/Out (10/28/21)

NESPRESSO Special Reserve Hawaii Kona

Asia Society’s food crawl focuses on Thailand

ONE of the best ways to understand a culture is through its food, so Asia Society Philippines presents another installment of its Eyes on Asia series focusing on Southeast Asian cuisine, the “S.E.A Digital Food Crawl,” on Nov. 5. The S.E.A. Digital Food Crawl is a three-part series that highlights the diverse and rich culture of Southeast Asia by taking its viewers on a journey through different countries’ cuisines. While the talks are online, the food crawl experience is real: audience members have the chance to purchase the dishes at the center of the talks, have them delivered right to their doorsteps, and join the live demo and discussion with featured chefs and cooks. The first stop is Thailand. Done in partnership with Manila House, Asia Society Philippines’ S.E.A. Digital Food Crawl explores the history and culture of Thailand through the country’s signature street food, Pad Thai. The Thai episode will feature Manila House Executive Chef, Piya Suthasiri. Audience members can order the Pad Thai paired with a Cha Yen, a Thai iced tea kit. For more information, visit Asia Society Philippines’ website, Facebook, Twitter, or Instagram pages at @AsiaSocietyPH S.E.A.

Max’s caps anniversary month with a chicken blowout

MAX’S Restaurant is capping off its 76th anniversary celebration this month with another great deal and high-profile limited-edition collaborations. Due to popular demand, Max’s is bringing back its Chicken Blowout on Oct. 29 — its Sarap-to-the-Bones Fried Chicken is offered at P200 off its usual price for both Regular and Family Whole Fried Chicken. The P200 discount on Whole Fried Chicken will be available in all Max’s stores nationwide except Cebu, Antique, Bukidnon, and Pavia. Price starts at P299 for Regular Whole Fried Chicken. Customers can avail of this one-time deal for dine-in, take-out, and delivery. Meanwhile, Max’s has collaborated with award-winning photojournalist Hannah Reyes Morales for a special 2022 documentary calendar that emphasizes how the most special days are those spent with family. Customers can get the anniversary calendar for free when they buy any regular-priced Max’s product for a minimum of P2,000 at select stores. This will be available for dine-in, take-out, and delivery starting Oct. 31. Max’s is also collaborating on limited-edition T-shirts with Linya-Linya. These Max’s x Linya-Linya shirts combine the signature wit of the Linya-Linya brand with favorite items from the Max’s menu. Customers can get these shirts for free when they buy any Max’s Set Meal good for 10, for dine-in, take-out, and delivery. The shirts will be available in select stores only starting Oct. 29. For more information, visit the official Facebook page at @MaxsRestaurant.

Citi, Bistro Group offer treats for vaccinated cardholders

CITI Philippines and The Bistro Group have teamed up to give vaccinated Citi credit cardholders a treat: vaccinated Citi credit cardholders will get a P150 eGift voucher when they dine in at any participating restaurant of The Bistro Group in Metro Manila. Too, they can also get a 15% discount on their total bill when they use their P150 eGift Voucher and pay using their Citi credit card with a minimum of P1,500 food bill. Citi credit cardholders can avail of this treat until Nov. 5. They must pre-register at the Giftaway site (www.gft.ph/gj21) using their unique code to redeem the eGift voucher. With their voucher code, vaccination ID, and Citi credit card ready, customers can enjoy a wide selection of dishes at The Bistro Group’s 16 brands and 54 participating restaurant outlets, such as TGIFridays, Italianni’s, Denny’s, Buffalo Wild Wings, Bulgogi Brothers, Fish & Co., Red Lobster, Las Flores, Tomatito and more. For details, visit www.citibank.com.ph/finedelights or follow @CitiPhilippines on Facebook.

Crown Plaza restaurant reopens

CROWNE Plaza Manila Galleria’s Chinese restaurant Xin Tian Di has resumed daily operations. It is now open daily from 11 a.m. to 9 p.m. Only fully vaccinated individuals ages 18-65 years old will be allowed to enter the premises. Diners must present their physical vaccination cards upon arrival. Prior reservations required due to limited seat availability. To book a slot, call 8790-3100 or send an e-mail to mnlcp.xintiandi@ihg.com. Meanwhile, the hotel is celebrating Halloween with a DIY Halloween Cupcake Kit. Order a kit via www.crowneplazamanila.com.

Mang Inasal offers new chicken empanada

MANG Inasal now carries a new merienda (snack) item: the Crunchy, Chunky Chicken Empanada. Inside the crisp, buttery pastry shell of the empanada is a mix of chicken chunks, potatoes and raisins. It is available per piece (starts at P49), in packs of three (starts at P145), and in boxes of six (starts at P289). It can be paired with either the Palabok or with the Extra Creamy Halo-Halo. Both Merienda Savers come with Lipton Iced Tea (starts at P95). The chicken empanada is now available in all Mang Inasal stores nationwide (https://bit.ly/3hBwAax). It can also be ordered through takeout or delivery via manginasaldelivery.com.ph, GrabFood or foodpanda.

Nespresso’s Special Reserve Hawaii Kona returns

FIRST introduced in the Philippines in 2020, Nespresso’s Special Reserve Hawaii Kona coffee has made its seasonal return in local Nespresso boutiques, pop-up stores, and online at www.nespresso.ph. In the Hawaiian language, Kona means “leeward,” which pertains to the western side of the island that’s protected by the mountains from the effects of the trade winds. Only coffee that’s grown in this very small region, such as Nespresso’s Special Reserve Hawaii Kona, can be labeled Hawaii Kona. The coffee is made of 100% Arabica Kona beans. The coffee is medium roasted in a single batch and ground to medium size. This heightens the intensity while letting the exotic fruit notes prevail in the cup — it is best served as an espresso. Hawaii Kona is produced in very limited quantities — it’s smaller than other Nespresso limited-edition coffees due to its rarity.

Rico’s Lechon now offers Frozen Lechon Baka and more

THE NEWEST entry in Rico’s Lechon’s ready-to-eat (heat) food packs assortment is Rico’s Frozen Lechon Baka. Now available in leading supermarkets and grocery stores, Rico’s Frozen Lechon Baka has two sizes; the Junior Size Original (250 gm) for P350 and the Fiesta Size Original (600 gm) priced at P810. The spicy variant is priced at P380 for the Junior Size and P870 for the Fiesta Size. Other frozen food pack variants are Lechon Baboy, Dinuguan Special, Lechon Paksiw, Lechon Sisig, Lechon Pares, Lechon Binagoongan, and Lechon Humba. They are available at leading supermarkets, groceries, and convenience stores in Metro Manila and selected provinces. Customers can also pre-order for pick-up and delivery by contacting the Lechon Fulfillment Center at 0917-814-7648 or (02) 7799-0810. For more information, visit www.ricoslechon.com.

Viber celebrates a Cebuano Food Feast

FREE messaging app Vibe celebrates Cebu’s culinary specialties and other food through a first-of-its-kind partnership with food and delivery platform Let’s Eat Bai. Let’s Eat Bai has launched its own Viber Community giving members exclusive access to promos and updates from their favorite local food businesses as well as food reviews and trivia. To make their conversations more appetizing, Viber and Let’s Eat Bai have created a special sticker pack that also redirects users to the Community after download. Let’s Eat Bai has become the go-to e-commerce platform for Cebuanos who are looking for food, drinks, and groceries.

CLI breaks ground for P1.5-B Iloilo condo

CEBU Landmasters, Inc. (CLI) on Wednesday said it broke ground for a P1.5-billion premier condominium tower in Iloilo City, which is already 75% sold.

Terranza Residences is a partnership between the listed Visayas-Mindanao (VisMin) property developer and International Builders Corp. (IBC) under a joint venture called GGTT Reality.

“The VisMin residential market continues to hold a lot of promise for us. More so in Iloilo because we have partnered with IBC, a successful local business known also for its philanthropy,” said Jose R. Soberano III, chairman and chief executive officer of CLI.

CLI is tasked to develop and manage the condominium, while IBC will build and manage the retail part of the development. Designed by Edward Co Tan + Architects, the tower will follow a traditional Filipino bahay na bato (stone house) theme.

Meanwhile, Vision Properties Development Corp. was assigned as the general contractor for the project.

The 33-story Terranza Residences is CLI’s second Iloilo City project. It is expected to be completed by 2025, bringing in as much as P2.4 billion in revenues.

It will be home to 600 units on a 2,539-square meter (sq.m.) property. The residential segment will offer one-bedroom units spanning 24 sq.m. to 174 sq.m., which may be combined, as well as penthouse units with 117 sq.m. of space to as much as 174 sq.m.

The project will feature a sky lounge, a rooftop garden, a play area, fitness gym, and a helipad.

“CLI’s strong reservation sales in the first nine months of the year attest to sustained and strong VisMin housing demand,” the company said. It recorded a 13% growth to P11.8 billion in reservation sales in the three quarters to September.

Shares of Cebu Landmasters at the stock exchange inched up on Wednesday by 0.68% or two centavos to close at P2.95 each. — Keren Concepcion G. Valmonte

Visa says overseas card spending jumped by 38% as more countries eased restrictions

CONSUMERS are slowly getting back to the skies, but it’s not fast enough for Visa, Inc.

While overseas spending on the firm’s cards jumped 38% during the firm’s fiscal fourth quarter, a bigger increase than analysts were anticipating, the firm warned that widespread border closures are still a hindrance. Cross-border travel likely won’t reach pre-pandemic levels until the summer of 2023, said Chief Financial Officer Vasant Prabhu. 

“Cross-border travel is recovering well, but it’s still well below pre-COVID levels, with the pace of recovery depending on border openings,” Mr. Prabhu said Tuesday on a conference call with analysts. “COVID variants are still with us and vaccination rates remain low in large parts of the globe. With these factors as the backdrop, forecasting the trajectory of the return to normalcy remains difficult.”

Cross-border transactions are especially lucrative for Visa because the network can charge higher fees for those purchases. In all, Visa is now assuming revenue in its fiscal year 2022 to climb by a percentage at the “high end of the mid-teens.” Analysts had been expecting a 20% jump.

Visa shares sank as much as 4.1% to $222.22 in extended trading in New York. The stock has climbed 6% this year, compared with the 22% advance of the S&P 500 Information Technology Index.

For its fiscal first quarter, Visa expects revenue to rise by a percentage in the “high teens.” Analysts in a Bloomberg survey forecast a 22% increase.

Governments around the world have begun lifting travel restrictions and vaccines are proliferating in developed markets, allowing consumers to begin traveling again. Excluding the impact of currency swings, overall spending on Visa’s network jumped 17% to $2.78 trillion in the period ended Sept. 30, the company said in a statement. That just missed the $2.79 trillion average of analyst estimates.

Visa said revenue for the quarter ending Sept. 30 rose 29% to $6.6 billion. While that topped estimates, the payments network warned that it will begin spending more on both marketing and technology platforms.

The payments giant set aside a whopping $2.39 billion in incentives and rebates to lure merchants and banks to use the firm’s networks. That was more than the $2.36 billion analysts anticipated.

Net income soared 68% to $3.6 billion in the quarter, or $1.65 a share. Excluding one-time items, Visa said profit was $1.62 a share, which was higher than the $1.54 average of analyst estimates compiled by Bloomberg. — Bloomberg

A look at COVID’s effect on food purchases

A WOMAN shops for vegetables at a grocery store in Cubao. — PHILIPPINE STAR/MICHAEL VARCAS

SOME of the effects of the coronavirus disease 2019 (COVID-19) pandemic on food and beverage sales are an increase in sales in basic products, lower sales in impulse products, and an expansion of e-commerce sales, according to speakers at a recent lecture on the F&B industry.

The French Chamber of Commerce and Industry in the Philippines (CCI-France) laid out government updates and spending patterns of Filipino shoppers in a talk called “Behind the Cuisines: The Changing Phases of the Food and Beverage Industry,” held on Facebook Live on Oct. 22. Celebrity chef Erwan Heussaff had a cooking demonstration the next day.

“We’re now at almost two years into the pandemic, and the disruption in the Philippines remains quite significant,” said Marie-Anne Lezoraine, Managing Director of Kantar Worldpanel Division during the talk. “At the moment, we remain at a lower level of expenditure. We’re very hopeful that recovery is in progress.”

In a series of charts, Ms. Lezoraine explained why spending remains low for Filipino households. “The factors really are, of course, the impact of the current health situation and the necessary lockdowns that have happened.” These have disrupted the shopping behavior of Filipinos, and “to a certain extent, the purchasing power of some parts of the population.”

According to her, prior to the pandemic, Filipinos were among the most frequent shoppers in the world, a trait that applies to shopping for food and beverage (F&B) as well. E-commerce has inflated in the country, as noted by Department of Trade and Industry Secretary Ramon Lopez earlier in the talk. “In 2020, the use of e-commerce in F&B increased by 210% because of the pandemic.”

“There are still huge amounts of opportunity for e-commerce growth. This channel can probably play in the future a greater role in offsetting some of the brick-and-mortar stores’ losses,” said Ms. Lezoraine.

She also noted the increase of spending in some goods, particularly in essentials such as flour, margarine, butter, instant noodles, canned fish, cooking oil, and seasonings. However, “It has been a little bit tougher for these categories which are more impulse categories,” she noted, resulting in lower sales in chocolate and ice cream, for example. “Any progress in the front of mobility will surely help those categories recover.”

She noted some trends that will still be relevant in 2022: the prioritization of food, an economic recovery driven by middle- to lower socio-economic classes, the value of proximity in shopping, and the importance of sustainability (particularly with regards decreasing plastic waste).

Still, she said: “We’ve really seen some brands performing quite well, and as a result, I’m very confident to say that across all categories, there are really pockets of growth and successes that can be found.” —  JLG

SEC clears Cirtek’s P3.5-B shares offer

THE Securities and Exchange Commission (SEC) has given Cirtek Holdings Philippines Corp. the go signal to offer as much as P3.5 billion of preferred shares to the public.

“In its meeting on October 26, the Commission En Banc resolved to render effective the registration statement of Cirtek covering 50 million preferred B-2 Subseries C and D shares at an offer price of P50 per preferred share, with an oversubscription option of up to 20 million preferred shares,” the commission said in an e-mailed statement on Wednesday.

According to the latest timetable submitted to the SEC, Cirtek Holdings’ offer period is slated for Nov. 25 to Dec. 3.

Shares will be listed and traded on the main board of the Philippine Stock Exchange, with the listing of the preferred shares scheduled for Dec. 10.

Cirtek Holdings may net up to P3.44 billion from the preferred shares offer, should the oversubscription option be fully exercised.

Proceeds from the offer will be used to refinance the company’s existing debt, for partial repayment of maturing debt, for capital expenditures, and to fund the working capital of its subsidiaries.

Cirtek Holdings assigned PNB Capital and Investment Corp. as the sole issue manager, lead underwriter, and sole bookrunner for the offer. — Keren Concepcion G. Valmonte

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