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SM Prime’s net income falls 48% in nine months

PROPERTY developer SM Prime Holdings, Inc. reported a consolidated net income of P14.4 billion in the nine months to September, a 48% decrease from its P27.6-billion posting last year.

In a press release on Monday, SM Prime said that its consolidated revenues fell 29% to P60.7 billion, as its mall business declined during the period.

Its Philippine mall businesses logged in revenues of P18.3 billion, which is 57% lower than last year. Rental income of local malls was recorded at P16.8 billion, which is 52% lower from P42 billion in the previous year.

According to SM Prime President Jeffrey C. Lim, the developer’s malls are “slightly recovering” amid the global health crisis, which has affected the local economy.

“SM Prime’s core businesses, primarily its malls, showed slight recovery as the government started to re-open more industries to help the economy going in to the second half of the year. We have also implemented tighter controls on our expenses achieving a major reduction in operating expenses quarter on quarter,” said Mr. Lim in a statement.

SM Prime’s residential business, led by SM Development Corp. (SMDC), posted a 7% revenue increase to P34.2 billion year-on-year.

With the construction of new and expanding projects, SMDC announced that it is expecting to increase its inventory and continue offering ready-for-occupancy units.

Meanwhile, SM Prime’s commercial properties business reported a P3.7-billion revenue in the nine-month period, with its operating income reaching P3.3 billion.

SM Prime’s hotels and convention centers business segment posted revenues of P1.3 billion as quarantine measures eased in the country.

On Monday, SM Prime shares closed at P34.20 apiece, down 30 centavos or 0.87% from the last session. — Angelica Y. Yang

Office supply gap seen in Davao

By Denise A. Valdez, Senior Reporter

NO NEW OFFICE space will be added to Davao City’s supply for at least three years, property consultancy firm JLL Philippines said.

In a recent briefing on its Davao real estate market overview, JLL Philippines said there is a projected gap in new office supply until 2024, giving property developers an opportunity by expediting ongoing projects.

“Beyond 2020, there’s an absence of supply for the next three years. Most of the office developments that we’ve seen are estimated to complete post-2023. That’s around 155,000 square meters of office projects in total, and that’s certainly going to create a bit of dearth,” JLL Philippines Head of Research Janlo de los Reyes said.

“It’s going to leave a limited amount of available office space in the market for the next three years. That will mean even though there’s a higher vacancy at this current time, we expect that the market will recover by next year,” he added.

The vacancy rate for office leasing in Davao stood at 22.2% as of the third quarter. “(This is) reflective of the softening of office demand, which has characterized the leasing market across all geographies in the Philippines in the last few quarters,” Mr. De los Reyes said.

He noted the coronavirus pandemic, which affected operations for all types of businesses, pushed companies to reassess entry and expansion plans.

While these plans may remain on the back burner until the end of the year, Mr. De los Reyes said demand may start picking up by 2021 on improving economic conditions.

“Even though it’s a gradual recovery, definitely a lot of this (vacant) space is being absorbed by the occupiers as demand confidence resurges in the next couple of years. And that’s going to put a lot of pressure in terms of supply,” he said.

The supply gap in the near term may also push some developers to tighten construction schedules, hoping to capture firms looking to locate in Davao.

“That sends an opportunity to some developers to maybe reevaluate their completion dates and project plans to take advantage of that recovery of the demand, and at the same time, the lack of competition that we’re going to face within the next three years,” Mr. De los Reyes said.

The Davao office market primarily grew because of offshoring and outsourcing locators in 2010, but it has diversified in recent years. Traditional businesses and flexible workspaces have taken a larger share of the market starting 2016.

“That’s a good thing because now you have a more diversified profile of demand drivers for the city… This trend is something that we can expect in Davao City for the next couple of years,” Mr. De los Reyes said.

Aside from the coronavirus pandemic, he said the eruption of Taal Volcano in January pushed businesses to start looking at alternative locations and more satellite offices outside Metro Manila.

“Definitely there’s a lot of opportunities that are still remaining in Davao. (Its pipeline of) infrastructure development,… coupled by the lack of office development in the next couple of years, presents an opportunity for a lot of players,” Mr. De los Reyes said.

BDO books higher net profit in 3rd quarter

BDO Unibank, Inc. posted a higher net income in the third quarter as its core businesses continued to grow despite the coronavirus pandemic.

The Sy-led bank booked a net profit of P12.3 billion from July to September, up by 3% from P11.967 billion in the same period last year, it said in a disclosure to the local bourse on Monday.

This brought its earnings for the first nine months to P16.6 billion, down 48% from P32.1 billion in the comparable year-ago period as it set aside more loan loss provisions “in anticipation of potential delinquencies due to the pandemic.”

“Despite BDO’s promising results, the bank recognizes that the pandemic difficulties still lie ahead. The delinquency problem on loans have not yet peaked, interest rate caps on credit cards will be instituted soon and there are added costs in doing business as a result of necessary precautions inherent in the bank’s operations. All of these and more are seen to put pressure on the bank’s earnings,” the lender said.

“BOO believes that its strong business franchise and robust balance sheet place the bank in a good position to leverage on a post-pandemic economic recovery,” BDO added.

Return on average equity was at 5.97% as of September while return on average assets stood at 0.68%, down from 12.53% and 1.4% in the same period last year, respectively.

BDO’s quarterly report showed its net interest income grew 6% to P33.43 billion in the third quarter from P31.535 billion in the same period last year.

This came on the back of a 45.45% decrease in interest expense to P5.064 billion in the quarter, which offset a 6.27% drop in loans and other receivables to P33.972 billion and a 7.63% decline in gains from trading and investment securities.

In the first nine months, its net interest income climbed by 13% year-on-year to P99.825 billion.

The bank said loans rose six percent to P2.2 trillion as of September on the back of its corporate and consumer accounts.

“The bank remained supportive of its borrowing clients, ensuring continued access to their credit facilities to help them manage their funding requirements during these challenging times, notwithstanding loan payment deferments under Bayanihan I and II,” BDO said.

Even as its lending book grew, the bank’s gross non-performing loans (NPL) ratio stood at 1.97%, while its NPL coverage was at 138%. Total loan loss provisions in the first nine months stood at P23.8 billion.

Meanwhile, deposits with the bank went up 3% to P2.57 trillion at end-September on the back of the growth in its current account, savings account (CASA) deposits. The bank said its CASA ratio climbed to a new high of 79%.

On the other hand, non-interest income totalled P11.987 billion in the third quarter alone, sinking by 17.98% from comparable year-ago period, due to lower income from service charges, fees and commissions, foreign exchange gains, insurance premiums and other sources.

This brought its non-interest income for the first nine months to P36.772 billion, down from P44.123 billion last year.

“Wealth management remained resilient with trust volume and fees sustaining steady growth despite soft market conditions. However, some of the bank’s businesses, specifically those that rely on face-to-face interaction, are still gradually rebuilding their volumes,” BDO said.

BDO’s resources went up 7% to P3.3 trillion at end-September on the back of the growth of its liquid assets and loans and funded by deposits, bond issuances and capital.

Its capital base stood P378.6 billion. The bank’s capital adequacy ratio was at 14.3% while its common equity Tier 1 ratio stood at 13.2%, both above the regulatory minimum.

BDO shares closed at P95.25 apiece on Monday, down by P1.75 or 1.8% from its previous finish of P97 per share. — KKTJ

Now Corp. raises capital stock to P1.86 billion for expenditures

Now Corp. is hiking its authorized capital stock to P1.86 billion to raise funds for capital expenditures.

In a disclosure to the stock exchange on Monday, the company said its board of directors “unanimously” approved the increase in its authorized capital stock to P1.86 billion from P1.50 billion.

The capital stock will comprise of 2.57 billion common shares with a par value of P0.70 each and 60 million redeemable, convertible, non-participating, and non-voting preferred shares with or without detachable warrants with a par value of P1 per share.

“The dividend rate of the preferred shares shall be fixed by the board of directors. The subscribers to the preferred shares shall be entitled to the payment of dividend,” Now Corp. said.

The company said the increase in authorized capital stock will be “for capital expenditures, working capital, and other general corporate uses as well as additional investment in an affiliate.”

In an earlier disclosure, Now Corp. said it had partnered with Vietnam’s Viettel Business Solutions Corp. to offer information and communications technology (ICT) products and services in the country.

The Philippines is Viettel’s 11th overseas market, according to Now Corp. Viettel currently operates in Vietnam, Laos, Myanmar, Cambodia, Burundi, Tanzania, Mozambique, Cameroon, Peru, and Haiti.

The two firms will be exploring opportunities in digital transformation consulting services, artificial intelligence, data analytics, and cybersecurity.

Now Corp. affiliate Now Telecom Co., Inc. announced last month that the National Telecommunications Commission (NTC) had “extended” its provisional authority to install, operate, and maintain a nationwide mobile telecommunications system.

The extension is not specific to 3G mobile communications technology, but can extend to 4G and 5G technologies, the company said.

The NTC said the extension comes with conditions, which include the infusion of additional capital of at least P1.9 billion based on the company’s first two years’ capital expenditure of P6.3 billion as submitted and approved by the Securities and Exchange Commission.

Shares in Now Corp. on Monday closed 0.82% lower at P4.85 apiece. — Arjay L. Balinbin

DMCI Homes completes 2 buildings of luxury project

DMCI HOMES will start turning over residential units from the two buildings of its Oak Harbor Residences project this month, after construction was recently completed.

In a statement over the weekend, the property arm of Consunji-led DMCI Holdings, Inc. said it is ready to accept move-ins at the Parañaque City project, which marks the company’s first project under the DMCI Homes Exclusive brand.

The completed portion of the luxury waterfront property are the 16-storey Lauderdale and 15-storey Westport buildings, which have a total of 262 units. DMCI Homes will accommodate physical and virtual turnovers to owners.

“DMCI Homes will strictly implement physical distancing and stringent health protocols to ensure everyone’s safety. Payment via online facilities and digital channels is also encouraged to ensure a convenient and safe move-in experience for unit owners,” it said.

The units located on the upper ground floor up to the sixth floor of both buildings will be prioritized. Units on the seventh floor up to the penthouse will follow.

The third building of the project, which will account for 164 units across 15 storeys, is currently under construction. It is targeted for turnover by December 2021.

The 11,871-square meter Oak Harbor Residences was launched in 2016 to introduce the company’s DMCI Homes Exclusive brand. It offers luxury amenities targeted to premium clients.

DMCI Homes said the property was a big seller when it was launched, with all units “easily sold out” under an introductory price between P9.9 million to P34 million.

“Many of its buyers were drawn by the combination of prime location and urban conveniences, as well as its offering of a spectacular Manila Bay view and cityscapes…,” it said.

Oak Harbor Residences is located along Jackson Avenue in Asiaworld, Parañaque City. — Denise A. Valdez

UnionBank net income climbs 11% in Q3

UNIONBANK of the Philippines, Inc. booked a higher net earnings in the third quarter driven by double-digit growth in its recurring income.

The Aboitiz-led bank posted a net profit of P4.2 billion in July to September, higher by 11% in the comparable year-ago period, it said in a disclosure to the local bourse on Monday.

This brought its nine-month net profit to P8.5 billion, 0.9% lower from a year ago, due to higher loan loss reserves, which hit P7.5 billion in the first nine months due to the continued weakness in the economy amid the coronavirus pandemic.

This translated to a return on equity of 11.6%.

The bank’s total assets stood at P758 billion as of September, rising by 11% from P685.8 billion a year ago.

UnionBank’s net interest income in the third quarter jumped by 27% to P7.6 billion from P5.9 billion a year ago on the back of “significant margin improvement” and as fee income increased by 18% to P621.7 million on higher service charges.

Meanwhile, revenues in the first nine months grew by 33% to P31.8 billion driven by a 36% increase in net interest income to P21.4 billion. Non-interest income also rose by 26% to P10.4 billion in the period on the back of higher trading gains.

UnionBank said loans went up by 3% year-on-year to P355.8 billion at end-September from P346.3 billion last year.

On the other hand, total deposits jumped by 29% to P539.9 billion on the back of the 33% growth in current account, savings account deposits. This caused its net interest margin to rise 92 basis points to 4.6%.

UnionBank shares closed at P55 apiece on Monday, rising by 35 centavos or 0.64% from its previous finish of P54.65 per share. — KKTJ

iWant releases horror movie anthology in time for Halloween

IT’S a few days before Halloween and in line with the spooky season, streaming service iWant is coming out with a horror movie anthology starring Jake Cuenca and Ivana Alawi as people who want to take the easy way out only the easy way out has dire consequences.

The anthology, titled Sitsit (the Filipino onomatopoeic expression for “pssst”), is set to hit the streaming service on Oct. 31 and will have two parts, Scorpio and Aswang, directed by Ato Bautista and Erin Pascual, respectively.

In Scorpio, Jake Cuenca plays an aging, lustful photographer who takes a potion that turns him into a young man in order to win the heart of the woman he is obsessed with. In Aswang, Ivana Alawi plays a money-hungry prostitute who wants to turn her life around and befriends a stray dog which may be more than what it seems.

“Actually, before I accepted the role, I told the management that I was scared of taking it because I have never been in a lead role before,” Ms. Alawi said in the vernacular during the media conference on Oct. 23 via Zoom.

Misgivings and fears aside, Ms. Alawi accepted  because she “always wanted to star in a horror [film].”

“I wanted to play a crazy character, a murderous one. In YouTube, I am myself, but when I entered this [shoot], when I started shooting for this, it was different,” she explained.

Ms. Alawi first rose to fame on YouTube doing vlogs and eventually became a model and actress.

The anthology was shot before COVID-19 quarantine measures were put in place so the cast and crew were able to shoot on location, which included a scene on a street in Poblacion, Makati which Ms. Alawi admitted unnerved her.

“There were so many people and it was hard to get into character,” she said.

Sitsit airs starting Oct. 31 on the iWant TFC app which can be downloaded from the Google Play Store or the Apple App Store or accessed via iwanttfc.com. — ZBC

Philex halts underground mining after reported coronavirus cases

PHILEX MINING Corp. temporarily suspended its underground operations on Oct. 23 and 24 to mitigate community transmission after several of its employees tested positive for the coronavirus disease 2019 (COVID-19).

In a disclosure to the stock exchange on Monday, Philex Mining said that after conducting mass testing, it recorded 26 COVID-19 positive cases in its Pacdal mine site as of Oct. 23.

Most of the patients were working in underground operations.

According to the mining firm, some of the patients were quarantined in the medical and isolation facilities of its Pacdal mining site in Benguet while other employees were transferred to Baguio General Hospital.

Philex Mining said it had started to perform contract tracing procedures to determine employees and their family members who were in possible close contact with the COVID-19 patients.

The company added that it plans to finish the mass testing of its 1,000 personnel who may be exposed.

“Additional isolation and quarantine facilities are being readied for any eventualities,” Philex Mining said in the disclosure.

To prevent the spread of the virus, Philex Mining has implemented health measures in its mine site such as the wearing of face masks and face shields, social distancing and implementation of 24-hour curfew, disinfection activities, and strict inspection at its main gate.

Meanwhile, the mining company said it was too early to declare the potential impact of the event to its operations and financial results.

Philex Mining added that it planned to resume its mining operations by Sunday afternoon.

On Monday, shares in Philex Mining at the stock exchange rose 0.18% or P0.01 to close at P5.61 each. — Revin Mikhael D. Ochave

Club Paradise is world’s 1st green private estate

CLUB PARADISE PALAWAN is the first “green” private estate to be included in Green Destinations’ list of top 100 sustainable destinations of 2020.

The annual global initiative organized by Green Destinations highlights sustainable tourism stories and good practices of destinations.

Club Paradise Palawan implements an EcoConserve project, which covers various sustainable practices in its operations. The company has sought to reduce plastic consumption and add an alternative supply of clean water to surrounding communities. It also promotes sustainable food sourcing, tapping Taranuman Farm for restaurant supplies.

The 700-meter beach falls also within a Biosphere Reserve of the United Nations Educational, Scientific and Cultural Organization, a nesting site for Hawksbill and Green Sea turtles.

Discovery Hospitality Corp. manages Club Paradise Palawan, Discovery Shores Boracay, Discovery Suites in Ortigas, and Discovery Primea in Makati.

LANDBANK prices maiden sustainability bonds, closes offering on first day due to oversubscription

LAND BANK of the Philippines closed its maiden offering of sustainability bonds on the first day on strong demand from investors. — BW FILE PHOTO

LAND BANK of the Philippines (LANDBANK) closed its bond offering on its first day following strong demand from investors.

The state-lender said in a statement on Monday that the offer period for the bonds, which was supposed to run from Oct. 26 to Nov. 6, was cut short due to “very strong demand and oversubscription.”

LANDBANK priced its maiden issue of sustainability bonds at an interest rate of 2.5872% payable quarterly. The papers have a tenor of two years.

The lender earlier said it is looking to raise at least P3 billion from the offering. It had yet to disclose the total amount raised from the bonds as of press time on Monday.

Standard Chartered Bank served as the sole lead arranger and bookrunner for the transaction. It was also a selling agent together with LANDBANK.

The bank last week said the funds raised from the transaction will be used to finance its loan programs for green and social projects.

For green projects, included are those related to climate change mitigation and adaptation, biodiversity conservation, as well as pollution control, among others, the bank said.

Meanwhile, initiatives on basic infrastructure, food security, essential services, affordable housing, and employment generation, are considered social projects.

State-owned Development Bank of the Philippines in November 2019 likewise sold P18.125 billion worth of sustainability bonds. — LWTN

Short film tilt looking for stories of ‘resilience and strength’

LOCAL ketchup brand UFC is celebrating its 50th year through a short film competition meant to showcase the “resilience and strength [of Filipinos] in the face of tremendous challenges,” according to a press release.

Called the UFC Reel Life: Nagsasama-samang Sarap Short Film Competition, the tilt is open to all filmmakers in the Philippines. Each entry must have a maximum length of five minutes including the opening and closing credits.

Entries must also use “at least one UFC product as an organic part of the narrative,” in order to show “the integral role of UFC products in empowering Filipinos to create nagsasama-samang sarap (bringing together the delicious) moments every day,” said the release.

The UFC products that should be in the film include: UFC Tamis Anghang Banana Catsup, UFC Sweet Chili Sauce, UFC Tomato Sauce, UFC Gravy, UFC Hot and Spicy Banana Catsup, UFC Hot Sauce, UFC Spaghetti Sauce, UFC Ready Recipes, and UFC Fresh Selections.

All videos submitted should be recorded in a horizontal format and must be no less than 720 HD, though filming in 1080 HD is highly recommended. Entries shall be judged by a panel where the top 30 will be chosen based on the following criteria: Thematic Storytelling (40%), Creativity and Originality (40%), and Technical Execution (20%).

Deadline for submission of entries is on Nov. 30 with the top 30 finalists to be announced on Dec. 3, and winners to be named on Dec. 14.

The 30 finalists will automatically receive a gift pack from UFC and winners will take home the following: 1st Prize, P100,000; 2nd Prize, P50,000; 3rd Prize, P20,000; Best Actor, P5,000; Best Actress, P5,000; Best Cinematography, P5,000; Best Screenplay, P5,000; Best Editing, P5,000; Best Director, P15,000; and, People’s Choice Award, P15,000.

Those interested in joining the contest must send their entries through ufcreellife@gmail.com and must include the contestant’s name, title of the film, contact number, names of cast and crew, and a photo of the director. For larger files, use wetransfer.com to create a shareable link which can be included in the e-mail. — ZBC

Phoenix set to open FamilyMart convenience stores in Cebu

PHILIPPINE FamilyMart CVS, Inc. is set to launch three convenience stores in Cebu this week.

The retail company owned by Phoenix Petroleum Philippines, Inc. will be opening compact stores in two fuel stations at V. Rama and Banilad and a stand-alone shop in Banawa on October 28.

“There has been a clamor from our loyal customers in Cebu,” FamilyMart General Manager Bernard C. Suiza was quoted as saying in a disclosure to the stock exchange, Monday.

“Made possible through our franchisees, we will innovatively showcase our blockbuster products to Cebuanos in the most convenient and safest format possible,” the official added.

The company said the compact store format is ideal for get-and-go transactions during this time of a pandemic. Motorists will be aided by station personnel so they don’t have to get out of their vehicles. 

“This is our way of providing our business partners another channel for added revenue while offering more value to customers as we bring our stores closer to more communities,” Mr. Suiza said.

As part of its safety initiatives, FamilyMart earlier introduced an online ordering and delivery system and the FamilyMart on Wheels concept, which goes around neighbors to offer basic goods.

Phoenix Petroleum acquired the franchise for the Japanese retail company in 2017.

Shares in Phoenix fell by 3.86% to close at P12.96 on Monday. — Adam J. Ang

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