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Shares decline on latest jobs data, pandemic concerns

Philippine Stock Exchange index

Philippine shares closed the week in the red after data showed that the country’s unemployment rate went down in March and as the country’s pandemic situation continue to cloud investor sentiment.

The Philippine Stock Exchange index (PSEi) went down by 24.07 points or 0.38% to close at 6,258.71 on Friday, while the all shares index decreased by 2.22 points or 0.05% to finish at 3,877.43.

“Philippine shares closed lower as investors focused their attention on the highly anticipated jobs data, while fund managers continued to assess the new set of earnings that came out,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The preliminary results of the Philippine Statistics Authority’s Labor Force Survey for March this year showed that around 3.441 million Filipinos are unemployed, lower than the 4.187 million recorded in February.

The country’s unemployment rate for the month was at 7.1%, the lowest since the 5.3% seen in January last year.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said the decline “[reflects] investors’ declining confidence towards the market amid the pandemic and economic concerns.”

“Investors continue to worry about the pace and the strength of our economic recovery due to the setbacks brought by the pandemic and the consequent strict quarantine measures reimposed in the NCR Plus,” Mr. Tantiangco said, referring to the National Capital Region and nearby provinces.

“Tailwinds that can boost sentiment remain missing,” Mr. Tantiangco said. in a Viber message.

Sectoral indices remained split on Friday. Mining and oil gained 136.89 points or 1.44% to 9,588.36; services climbed 18.98 points or 1.33% to 1,444.40; and industrials improved by 18.37 points or 0.21% to end at 8,628.65.

Meanwhile, property declined by 29.98 points or 0.97% to 3,044.26; holding firms fell by 42.47 points or 0.67% to close at 6,226.53; and financials inched down by 7.44 points or 0.53% to 1,390.35.

Value turnover went down to P4.66 billion on Friday with 2.10 billion shares traded, from the P5.28 billion seen the previous trading day with 13.84 shares switching hands.

Decliners narrowly outnumbered advancers, 106 to 104, while 35 names closed unchanged.

Net foreign selling increased to P637.59 million on Friday from the P460.67 million seen in net outflows recorded on Thursday. — Keren Concepcion G. Valmonte

Factory output slumps for 13th straight month

CHINA DAILY VIA REUTERS

Philippine factory output extended its losing streak to 13 months in March, according to the local statistics agency.

The output as measured by the volume of production index fell by 73.4% year on year in March, worse than the 43.3% drop in February and 20.4% decline a year earlier.

The March drop marked the steepest in seven months.

The index has been on a steady decline since March last year, when President Rodrigo R. Duterte locked down the entire Luzon island to contain a coronavirus pandemic.

The average drop in the first three months of the year averaged 43.6% compared with a 7.9% slump a year earlier.

The Philippine Statistics Authority said five out of 22 industry divisions slumped, offsetting the gains made in other subsectors.

Of the five that contracted, four were in double digits led by the manufacture of coke and refined petroleum products (-97.3%), tobacco products (-45.4%), machinery and equipment except electrical (-39.3%) and basic pharmaceutical products and preparations (-28%).

Capacity use averaged 61% in March, up from 60.4% in February. Of the 22 sectors, 17 had an average capacity use of at least 50%.

The IHS Markit Philippines Manufacturing Purchasing Managers’ Index (PMI), which uses a different set of parameters, posted a 52.2 reading in March, above the neutral 50 mark that separates expansion from contraction. But this was down from 52.5 in February.

“The ongoing lockdowns, partial or otherwise, accompanied by the steep decline in economic activity and demand from the domestic market remains the main reason for the downtrend experienced by the sector,” ING Bank NV Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

“On top of the lack of demand, industries are constantly asked to shutter and to reopen whenever the country is moved into and out of community quarantine status, which also complicates the planning and production process for the sector.” 

The country has been under various levels of lockdown since mid-March last year to curb COVID-19.

From March 29 to April 11 this year, Metro Manila and the provinces of Bulacan, Cavite, Laguna and Rizal were placed under the strictest quarantine level. These are now under a more relaxed modified enhanced community quarantine until May 14.

“I do not expect a stark pickup in manufacturing activity outside a possible bounce due to base effects,” Mr. Mapa said. “Overall growth momentum is lacking and the Philippine economy continues to hobble down a lower growth trajectory.”

Manufacturing was among the top contributors to economic growth in the past few years based on the national accounts.

The same could be said about the revised 9.6% drop in economic output last year, when the sector caused a 1.83 point drop, second only to a 2-point drop caused by a construction slump. — AMPY

Exports spur Philippine foreign trade rebound

REUTERS

The country´s trade-in-goods deficit narrowed in March as exports grew at the fastest pace in a decade, the Philippine Statistics Authority reported on Friday.

Merchandise exports avanced by 31.6% to $6.68 billion after dropping by 1.5% in February, according to preliminary data.

The export tally for March was bigger than $5.35 billion a month earlier and $5.08 a year ago.

Meanwhile, merchandise imports expanded by 16.6% to $9.10 billion in March, higher than the 8.9% growth in the previous month.

March export growth was the fastest since 46.8% in September 2010, while import growth was the fastest since 26.2% in October 2018.

This brought the trade deficit to $2.41 billion in March, smaller than the $2.71-billion gap in February, as well as the $2.73-billion shortfall in March last year.  

Year to date, exports have increased by 7.6% to $17.56 billion compared with the Development Budget Coordination Committee’s (DBCC) projection of a 5% growth for the year.

Imports also have grown by 3.2% to $25.56 billion this year from $24.76 billion a year earlier. This was still below DBCC’s 8% target this year.

To date, the trade balance has hit an $8-billion deficit, narrower than last year’s deficit of $8.45 billion.

Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc. traced the numbers to base effects.

“The reopening of the economy in these first months of 2021 was also a clear factor as more people were out and businesses were open for more economic activity,” he said in an e-mail. “Corporate demand for imports and other inputs was also observed during this first quarter,”

Nicholas Antonio T. Mapa, a senior economist atING Bank N.V. Manila, cited the “strong showing” of the mainstay electronics sector in driving export growth this year.

“Demand for electronics and subcomponents will likely remain high given the global chip shortage — a development that could bode well for this sector in the coming months,” he said.

Danilo C. Lachica, president of the Semiconductor and Electronics Industries in the Philippines, Inc. said global demand for electronic products has continued to increase despite a global coronavirus pandemic.

“The electronics industry directly accounts for about 10% of the country’s gross domestic product,” he said  In an e-mail. “If we consider the secondary effects of the industry’s supply chain, the total impact is about 20% of our GDP.”

Electronic products, which made up more than half of total exports in March, increased by a quarter to $3.60 billion.  Semiconductors, which account for more than three-fourths of electronic products, also grew by 21.3% to $2.73 billion.

Manufactured goods, which include electronic products, rose by 36.3% year on year to $5.57 billion. These items made up 83.3% of total goods exported during the month.

“We expect the base effect-induced expansion for both exports and imports to continue in the coming months, with the Philippine economy relatively more open in 2021 compared with last year,” Mr. Mapa said.

“Demand for electronics components given the global chip shortage may also help lift demand for the export sector,” he added.

UnionBank’s Mr. Asuncion said the state´s ability to hit export and import targets would depend on a bigger reopening of the economy, more fiscal stimulus spending and an efficient vaccination program.

He added that the March trade figures bode well for first-quarter economic performance, but it may not be enough to push growth.

The trade momentum would likely have been sustained in April, though imports probably softened after a tighter lockdown, Robert Dan J. Roces, chief economist at Security Bank Corp. said in an e-mail.

Rising imports after the economy is reopened would boost the trade deficit and likely lead to a weaker peso, he said. “We think that the government targets this year for exports and imports at 5% and 8% are attainable.” — Lourdes O. Pilar

Central bank raises P100 billion at auction

BW FILE PHOTO

The Philippine central bank raised P100 billion from short-term securities it sold at an auction on Friday as rates fell due to easing inflation.

The Bangko Sentral ng Pilipinas (BSP) fully awarded the 28-day bills after getting  P116.024 billion in bids. But the demand was 23% smaller than the P151.5 billion at last week´s auction.

The debt paper fetched an average 1.783%, down by 2.2 basis points from 1.805% last week.

Yields sought by banks ranged from 1.77% to 1.8%, lower than 1.79-1.82% last week.

“The results of the BSP bill auction continue to show that market conditions remain normal amid ample liquidity in the financial system,” central bank Deputy Governor Francisco G. Dakila, Jr. said.

“Moving forward, the BSP’s monetary operations will continue to be guided by its assessment of the latest liquidity conditions and market developments.”

The central bank uses the short-term bills and term deposit facility to mop up excess liquidity in the system and guide short-term interest rates.

Easing prices of goods and services may have pulled down the rates, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

Inflation quickened to 4.5% in April, same as in March but faster than 2.2% a year earlier. This marked the fourth straight month that inflation exceeded the annual 2-4% target of the central bank.

Last month’s inflation was lower than the median 4.7% in an analyst poll by BusinessWorld last week. It was within the BSP’s 4.2-5% estimate.

The final pork tariff rates that the economic team and senators agreed upon earlier this week may have also helped pull down rates, Mr. Ricafort said. 

The move to increase the minimum access volume and lower tariffs for pork imports aims to temper rising meat prices.

Offshore, lower US Treasury bond rates also contributed to easing local bond yields, Mr. Ricafort said.

The rate of the benchmark 10-year Treasury note fell to 1.58% on Thursday from 1.63% at the start of the week.

Meralco power rates to increase in May

PHILIPPINE STAR/MICHAEL VARCAS

POWER rates in the Manila Electric Co. (Meralco) service area are expected to rise in May with the typical household expected to pay an additional P37 on its monthly bill, the first to not include the refunds for over-recoveries in transmission and other charges, Meralco said.

Meralco said in a statement Friday that the overall power rate for May is P8.5920 per kilowatt-hour (kWh), against P8.4067 per kWh in April.

The May rate is also lower than the year-earlier level of P8.7468 per kWh.

The typical household is defined as one that consumes 200 kWh.

It added that households consuming 300 kWh, 400 kWh, and 500 kWh will see their bills increase by P55, P73, and P90, respectively.

According to the distribution utility, the increase was due to the completion of the refund of over-recoveries in pass-through charges ordered by the Energy Regulatory Commission (ERC).

The ERC released an order on Dec. 29 directing Meralco to refund P1.4 billion worth of over-recoveries in transmission and other charges.

“Meralco implemented the ERC-approved adjustments starting January 2021 and completed the refund of over-recoveries in April. The impact on residential customers, from the months of January to April 2021, was a refund of around P0.15 per kWh,” the power distributor said.

Meralco said the generation charge for May also increased to P4.5474 per kWh from P4.5370 per kWh in the previous month.

This is due to the P0.2541 per kWh increase in the agreed power rates as a result of low dispatch levels from the San Gabriel combined cycle natural gas-fired plant in Batangas, operated by First Gen Corp., which committed the plant’s full capacity for six years  starting 2018.

Wholesale Electricity Spot Market (WESM) charges also stayed high due to tight supply on the Luzon grid.

“However, these were offset by lower charges from the Independent Power Producers which decreased by P0.1921 per kWh,” Meralco said.

“Power supply agreements provided 52% of Meralco’s energy requirement while WESM share was down to 7% this month. Independent power producers share this month was 41%,” it added.

Meralco said the transmission charge for residential customers also rose by P0.0933 per kWh as a result of higher ancillary service charges and with the end of the refunds, while a net increase of P0.0816 per kWh was recorded from taxes and other charges.

“Meanwhile, collection of the Universal Charge-Environmental Charge amounting to P0.0025 per kWh remains suspended, as directed by the ERC,” Meralco said.

However, Meralco said the increase in May power rates was mitigated by the ongoing P13.89 billion refund ordered by the ERC, based on the actual weighted average tariffs compared to the interim average rate for distribution-related charges from July 2015 to November 2020.

In February, the ERC directed Meralco to refund that amount, which is equivalent to P0.1528 per kWh, over 24 months or until the total is fully given back to customers.

Last month, a consortium made up of Meralco Power Gen, a subsidiary of Meralco; Aboitiz Power Corp.; and Taiwan Cogeneration International Corp., said it will not be pursuing the development of a planned 600-megawatt (MW) coal-fired plant in Subic, Zambales. The consortium is known as Redondo Peninsula (RP) Energy Inc.

Asked to comment, Meralco Head of Utility Economics Lawrence S. Fernandez said the cancellation of the RP Energy project will not affect the power supply.

“As I see it, there is no direct impact on Meralco’s supply portfolio. We don’t have a power supply agreement with Redondo,” he said during a virtual Friday briefing on the company’s power rates.

Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave

Metro Manila hog deliveries approaching 390,000

REUTERS

HOG deliveries to Metro Manila from various parts of the country are nearing 390,000 animals as the authorities seek to expand the pork supply to head off an inflation crisis, the Department of Agriculture (DA) said.

The DA said in a report that an additional 4,731 hogs were delivered to Metro Manila on May 6, which brought the total delivered supply to 388,367 hogs since the implementation of price controls via Executive Order (EO) No. 124 issued on Feb. 8.

Of the total, 1,570 hogs were sourced from Antique, Iloilo, and Negros Occidental; followed by 1,420 hogs from Batangas; and 692 from Oriental Mindoro and Marinduque.

Other areas that provided hogs were Sorsogon and Camarines Sur with 531; Zamboanga del Sur 250; Bukidnon and Misamis Oriental 245; and Tarlac 23 hogs.  

Since Feb. 8, Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) accounted for 41.3% of the hog shipments to Metro Manila, followed by Western Visayas with 21.3%, and Mimaropa (Mindoro, Marinduque, Romblon, and Palawan) 12.6%.

The DA said 28,203 kilograms of pork in carcass form also arrived in Metro Manila on May 6 which brought total deliveries to 2.69 million kilogram since Feb. 8. Majority of the carcasses were sourced from Central Luzon.

Earlier in the year, the DA projected a pork supply deficit of 400,000 metric tons (MT) as a result of the African Swine Fever (ASF) outbreak.

The price caps were lifted on April 8. The price ceilings for pork shoulder (kasim) were set at P270 per kilogram (/kg) pork belly (liempo) P300/kg, and whole chicken P160/kg. 

Instead, the DA implemented a suggested retail price (SRP) for imported kasim of P270 /kg, with imported liempo at P350/kg.

Recently, the Senate and the economic team of President Rodrigo R. Duterte reached a compromise on the recommended amendments to EO 128, which had lowered the tariffs on imported pork in a bid to increase supply.

Under the compromise, the tariffs for pork imports inside the minimum access volume (MAV) quota were to be set at 10% in the first three months and up to 15% in the following nine months.

Out-of-quota pork import tariffs were also recommended to be set at 20% for the first three months and 25% in the succeeding nine months.  

MAV refers to agricultural commodities that can be imported at lower tariffs under the World Trade Organization (WTO) trading system.

The original terms of EO 128, issued on April 7, had reduced the tariff rates for pork imports within the MAV quota to 5% in the first three months and to 10% in the following nine months. Out-of-quota pork imports were to be charged 15% and 20% over those periods, respectively.

Before the issuance of the EO, in-quota pork imports paid 30% tariff while out-of-quota pork imports paid 40%.

Also part of the compromise was the reduction of the expanded MAV import quota to an additional 254,210 metric tons (MT), from the 404,000 MT previously recommended by Mr. Duterte to Congress. — Revin Mikhael D. Ochave

Globe income rises 11% on lower non-operating charges, CREATE law

BW FILE PHOTO

Globe Telecom, Inc. announced on Friday an 11% increase in its first-quarter attributable net income, owing to a newly signed tax relief law and a decrease in non-operating charges.

Globe’s attributable net income reached P7.31 billion in the first three months, up from P6.58 billion in the same period in 2020, the Ayala-led telco said in a statement to the stock exchange.

“Despite the resurgence of COVID-19 (coronavirus disease 2019) cases in the country and the lingering uncertainties from the pandemic, we are encouraged by the improvements in Globe’s first quarter results,” Globe President and Chief Executive Officer Ernest L. Cu said.

“Looking ahead, we believe that Globe is well positioned to provide more digital solutions and innovative offers to make our services more relevant to our valued customers, especially during this time of crisis,” he added.

The company’s total revenues for the first quarter rose 4% to P42.85 billion from P41.19 billion in the same period in 2020. Service revenues — which include mobile, home broadband, corporate data, and fixed line voice — increased 2.5% to P37.81 billion from P36.88 billion previously.

Expenses increased 14.1% to P35.77 billion from P31.36 billion previously. This item covers general, selling and administrative expenses; depreciation and amortization; cost of inventories sold; interconnect costs; finance costs; and impairment losses.

Globe said its net income was “up 11% relative to the same period of 2020, as the decline in non-operating charges fully offset the hike in depreciation expenses.” Non-operating charges dropped 41.18% to P1.29 billion from P2.2 billion previously.

The company’s first-quarter operating costs, including subsidy and depreciation charges, stood at P28.7 billion, up 15% versus the first quarter of last year. Globe also said the higher equity share in net income of its affiliates resulted in lower non-operating expenses.

The lower taxes following the retroactive impact of Republic Act No. 11534 or the Corporate Recovery and Tax Incentives (CREATE) law resulted in the improvement in Globe’s after-tax income to P7.34 billion from P6.58 billion previously. The recently implemented law reduced the income tax rate to 25% from 30%.

“Excluding the impact of CREATE adjustment, normalized NIAT (net income after tax) would have been P5.0 billion, or 27% lower year on year,” Globe noted. At an online briefing, Globe Chief Finance Officer Rizza Maniego-Eala said the company saved “P330 million” in the first quarter because of the CREATE law. “That is positive for the company to help us reinvest in our massive network buildout throughout the country,” she said.

“Our capex (capital expenditure) for this year is P70 billion, with P19 billion spent in the first quarter,” she also noted.

Globe’s EBITDA (earnings before interest, taxes, depreciation and amortization) was P18.3 billion, down 11% year on year due to higher operating expenses.

“This led to weaker EBITDA margin to end the quarter at 48% from 56% a year earlier,” it noted.

The company’s first-quarter core net income, which excludes the impact of non- recurring charges, and foreign exchange and mark-to-market charges, increased 13.4% to P7.44 billion from P6.56 billion in the same period in 2020.

Globe Telecom shares closed 1.16% higher at P1,831 apiece on Friday. — Arjay L. Balinbin

PSALM: ‘winning’ negotiator offers P3B for Malaya power plant

State-led Power Sector Assets and Liabilities Management Corp. (PSALM) has declared Fort Pilar Energy Inc. as the winning entity in the negotiated sale of the government’s 650-megawatt (MW) Malaya thermal power plant in Rizal province.

In a statement on Friday, PSALM said Fort Pilar Energy submitted the highest offer at P3,123,500,000, which exceeded the minimum offer price of P1,845,222,000 set by the agency’s board of directors.

It described the privatization of the power plant as “a success.” It held the negotiated sale on Friday.

PSALM President and Chief Executive Officer Irene Besido-Garcia said that after several attemps to privatize the plant in the past two years, “we are very happy to have finally received financial bids substantially above” the minimum offer price.

“PSALM definitely needs the proceeds of this privatization activity to pay for the remaining stranded contract costs and stranded debts,” she said, adding that the Malaya power plant “contributed to the losses of PSALM the past many years and so we really looked forward to selling it.”

The agency said the other qualified negotiating party, AC Energy Corp., submitted an offer of P2,220,000,000.

The sale of the plant is on an “as-is where is” basis. It includes the 300-MW unit 1 and the 350-MW unit 2 as well as the underlying land located in Pililla, Rizal.

PSALM said the results of the negotiation are subject to a post-qualification process “to ensure that the winning negotiating party indeed met all the financial and legal requirements as indicated in the negotiation procedures.”

It added that the proceedings were witnessed by representatives of the Commission on Audit, the Department of Finance, the Department of Justice and National Power Corp.

The Malaya plant is being dispatched by privately owned National Grid Corp. of the Philippines as a “must run” unit, or a power plant that is compelled to run and provide the needed power to ensure reliability of supply in the Luzon grid.

PSALM said on the turn-over date, the plant will no longer be required to run as such as approved by the Department of Energy.

Robinsons Land earnings dip but ‘positive outlook’ seen ahead

Robinsons Land Corp.’s net income for the first quarter fell by 13% to P2.9 billion year on year despite a double-digit growth in revenues, the company reported in a regulatory filing on Friday.

Consolidated revenues for the period amounted to P16.67 billion, 35% higher than the P11.57 billion generated a year ago, due to increased economic activity.

“Business environment in the first quarter improved on the back of reduced quarantine restrictions and increased economic activity,” Robinsons Land President and Chief Executive Officer Mr. Frederick D. Go said in a statement.

Robsinsons Land’s EBITDA (earnings before interest, tax, depreciation, and amortization) declined by 50.5% to P4.17 billion from last year’s P6 billion, while its EBIT (earnings before interest and taxes) for the period dipped by 38.5% to P2.91 billion from P4.73 billion.

The company’s commercial centers division saw its revenues decline by almost 22% from the same period last year to P2.25 billion from P2.87 billion, while its EBITDA fell by 45% to P1.13 billion from P2.06 billion.

Robinsons Land said revenues for the segment improved by 22% from the previous quarter, while EBITDA went up by 65%.

The company did not provide comparative figures for the last quarter of 2020.

“Operational GLA (gross leasable area), number of operational tenants, and foot traffic showed signs of recovery in the first three months of the year,” the company said.

Around 20 Robinsons Malls have set up drive-thru saliva collection sites for COVID-19 (coronavirus disease 2019) testing and 17 vaccination centers, all done in collaboration with the Philippine Red Cross and local government units.

“We maintain a positive outlook for the future after the successful rollout of vaccination programs,” said Mr. Go.

Meanwhile, Robinsons Land’s hotels and resorts division recorded a 45% drop in revenues to P258 million from the P468 million in the first three months of last year.

But compared with the preceding quarter, the hotels and resorts segment’s revenues grew by 14% due to the improved performance of Go Hotels, the company said. The segment mainly catered to essential business sectors and the demand for temporary accommodation.

Realized revenues from the company’s residential segment went down by nearly 70% to P2.03 billion versus last year’s P6.7 billion due to the adoption of a new accounting treatment. Without this treatment, the company said revenues for the segment would have only declined by 19%.

Net sales take-up for the residential segment declined by around 28% to P2.82 billion from P3.9 billion.

“However, realized residential numbers continued to reel from delays in project completion caused by the COVID-19 pandemic,” the company said.

In March, Robinsons Land launched its first luxury horizontal property project Forbes Estates Lipa, which spans across a 21-hectare estate in Batangas.

Revenues from its office buildings division slid by six percent to P1.52 billion from P1.43 billion year on year. The segment ended the quarter with an EBITDA of P1.2 billion and an EBIT of P979 million.

Robinsons Land aims to complete five office projects that it describes as “ideal” for business process outsourcing firms, namely: Cybergate Iloilo 1, Cybergate Galleria Cebu, Cybergate Bacolod 2, Cyber Omega, and Bridgetowne East Campus 1.

Its industrial and integrated developments division finished the three-month period with P56 million in revenues, 42% lower than the P96.4 million seen in the first quarter of 2020.

“Developmental revenues from the partial recognition of gains and interest income on the sale of [a] prime lot to Shang Robinsons Properties, Inc. (SRPI) reached P97 million,” Robinsons Land said.

The segment generated P83 million each for its EBITDA and EBIT during the period.

Robinsons Land also realized revenues of P10.5 billion from the first phase of its China project, Chengdu Ban Bian. The overseas business also closed the quarter with an EBITDA and EBIT of P973 million each.

“The company has recovered 89% of its invested capital with the repatriation of $200 million,” Robinsons Land reported.

For the first three months, Robinsons Land spent P4.98 billion in capital expenditures covering land acquisitions, developments for malls, offices, hotels, and warehouse facilities, and for the construction of residential projects. The capital spending is 15.7% lower than the P5.91 billion spent year on year.

Shares of Robinsons Land at the stock exchange went up by eight centavos on Friday, closing at P16.50 apiece. — Keren Concepcion G. Valmonte

AyalaLand Logistics’ profit up 10% on prudent spending

AyalaLand Logistics Holdings Corp. saw 10% profit growth in the first three months to P165 million, it said in regulatory filing on Friday, citing prudent spending and cost-management initiatives.

The double-digit growth was realized despite its consolidated revenues falling by nearly 20% to P964 million from P1.2 billion in the first quarter last year.

AyalaLand Logistics, a listed subsidiary of Ayala Land, Inc., focuses on real estate logistics and industrial estate development.

The company earned P383 million from the sale of industrial lots during the January-to-March period, which is nine percent higher than last year’s P351 million on lot sales at Pampanga Technopark. It said it “[reflects] healthy demand from local locators.”

Meanwhile, commercial leasing revenues dropped by 33% to P125 million from P186 million year on year.

“Operations of South Park Corporate Center remained stable, however, this was tempered by the limited operations of South Park mall and Tutuban Center,” the company said.

Warehouse leasing revenues amounted to P123 million, posting a 13% growth from P109 million due to an improvement seen in rentals.

“We anticipate that our operations across our business lines will overcome the challenging business environment,” AyalaLand Logistics President and Chief Executive Officer Maria Rowena M. Tomeldan said.

The logistics company is aiming to expand this year by growing its warehouse gross leasable area (GLA) to 500,000 square meters (sq.m.), widening its presence to 10 key areas in the country from the current five, and by creating new business platforms by 2025.

AyalaLand Logistics broke ground for the second phase of ALogis Naic at Cavite Technopark in January, which will add 16,000 sq.m. to the company’s GLA once completed by the end of this year.

Another 6,000 sq.m. were added to the company’s GLA in March after ALogis Calamba, bringing the company’s ALogis portfolio to a total of 213,000 sq.m. in warehouse GLA.

Its recent acquisition of a cold storage facility in Laguna Technopark last April gave birth to the company’s cold storage segment, which was named “ALogis Artico.”

“Our diversified portfolio and our continuing efforts to build up our assets [put] ALLHC in a solid position to steer its course towards recovery and long-term growth,” Ms. Tomeldan said.

Shares of AyalaLand Logistics at the stock exchange declined by 1% on Friday, closing at P2.97 apiece from P3. — Keren Concepcion G. Valmonte

Atlas Mining swings to profit on higher copper prices

Atlas Consolidated Mining and Development Corp. on Friday reported a first- quarter net income of P420 million, a turnaround from its losses a year ago, on the back of higher copper prices.

The listed company, which incurred a P37-million net loss in January-March 2020, said in a regulatory filing that revenues in the first quarter this year fell 11% to P3.58 billion from P4.04 billion previously.

Its earnings before interest, tax, depreciation, and amortization (EBITDA) improved 3% to P1.68 billion from P1.62 billion.

For the period, Atlas Mining said the price of copper rose 55% to $3.93 per pound from $2.53 per pound, while gold price increased 14% to $1,797 per ounce compared to $1,574 per ounce last year.

Its wholly owned subsidiary, Carmen Copper Corp., had weaker production due to lower grades of ore milled since they were sourced from stockpiles. Copper grades fell 33% to 0.215% from 0.321%, while gold grades fell 19% to 5.77 grams per dry metric ton.

“This caused copper metal production to decrease from 27.92 million pounds in 2020 to 15.93 million pounds in 2021. Gold production decreased by 52% from 11,169 ounces to 5,346 ounces,” Atlas Mining said in the disclosure.

“Copper metal content of concentrate shipments decreased by 36% to 17.02 million pounds and gold content decreased by 46% to 5,239 ounces,” it added.

Atlas Mining President Adrian Paulino S. Ramos said the company’s first-quarter results are a reflection of the resilience and stability of its operations, which benefited from improved commodities markets.

“We are ever more confident that with our focus on operational stability, safety and efficiencies, Atlas Mining will sustain the growth it has achieved,” he said.

On Friday, shares of Atlas Mining at the stock exchange rose 1.35% or 11 centavos to close at P8.28 apiece. — Revin Mikhael D. Ochave

Roxas Holdings’ losses pile up as La Niña hits sugar output

ROXAS HOLDINGS, Inc. suffered a P333.39-million attributable net loss during its fiscal year’s January-March second quarter due to the effects of the La Niña weather phenomenon on sugar production.

The listed sugar and ethanol producer’s net loss attributable to the equity holders of the parent company is an expansion from P266.19 million a year ago, it told the stock exchange on Friday.

Revenues from contracts with customers amounted to P1.54 billion, 24.1% lower than the P2.03 billion it had the year earlier, while operating expenses fell 23% to P133.98 million from P173.94 million last year.

For the six-month period of its fiscal year ending in September, Roxas Holdings recorded P572.49 million in attributable net loss, bigger than the P300.07 million a year ago.

Its October-March revenues from contracts with customers totaled P1.89 billion, a 3.6% drop from the P1.96 billion recorded the previous year.

First-half operating expenses went down 9.9% to P305.86 million compared with P339.38 million a year earlier.

Roxas Holdings Chairman Pedro E. Roxas attributed the company’s performance to lower sugarcane yields amid an increase in the volume of milled cane, which cancelled out the operating gains and improvements.

He said the company felt the negative effects of an extended La Niña, which hampered the growth of sugar canes and affected farm productivity.

“The overall decline in cane quality (sugar content of canes) is a concern for the entire sugar industry, so much so, that the Philippine Sugar Regulatory Administration (SRA) has intervened and suspended the United States quota for exports in early April,” Mr. Roxas said in the disclosure.

Roxas Holdings President and Chief Executive Officer Celso T. Dimarucut said unpredictable weather affected the company’s business operations during the previous two quarters.

He added that heavy rains caused a delay in the harvesting of canes, thus prolonging the company’s milling cycle.

Meanwhile, the company’s ethanol plant – San Carlos Bioenergy, Inc. – posted better production during the past two quarters, Mr. Dimarucut said.

“This was the result of a strategic shift in the sourcing of the company’s primary raw material, with the increase in milling from sugarcane syrup, whilst maintaining flexibility in the use of molasses, as prices soften,” he said in the disclosure.

“We are now fully focused on implementing solutions to address the factors causing volatility and higher costs in our industry and our group. Efforts are currently underway to regain our position in the market,” he added. — Revin Mikhael D. Ochave

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