By Adam J. Ang

Two listed companies of Edgar J. Sia II recorded profit growth in the second quarter with DoubleDragon Properties Corp. doubling its bottom line on the operations of its “resilient” leasable portfolio.

In a disclosure to the stock exchange, Friday, MerryMart Consumer Corp. posted a 23.91% increase in consolidated net income in the first half of the year to P13.67 million with total net revenues jumping 35.18% to P1.64 billion.

The grocery operator is rethinking its expansion plans to adapt to the so-called “new normal” spurred by the pandemic. “The team locates its branches in strategic locations factoring the post-pandemic new normal scenario,” Mr. Sia said.

The company is set to launch its online platform within the present quarter, while it is opening its first drive-thru outlet in Iloilo City in January 2021. Similar concepts will be launched in “various major thoroughfares” soon, the company official said.

On Aug. 8, it opened the doors of its two latest branches in Mindanao, bringing its total store count to nine. 17 more stores are in the pipeline so it can have a portfolio of 25 branches by yearend.

Meanwhile, DoubleDragon said its total net income grew twice to P4.40 billion in the first semester, with consolidated revenues climbing 45% to P8.11 billion as its leasable portfolio proved “resilient” during the lockdown phase.

Sans fair value gains, the property developer’s earnings were stable, while core profits increased by five times to P578.29 million from P114.60 previously.

“As COVID-19 (coronavirus disease 2019) quarantine measures are prolonged, consumer behavior is also altered, and most likely to stay. DoubleDragon is grateful that its portfolio has been tested to be truly resilient during this pandemic,” Mr. Sia said.

The company noted “high” occupancy in its three-star Hotel 101, as it has accommodated business process outsourcing (BPO) firm employees who continuously work during the quarantine period.

It also highlighted the relevance of its CentralHub industrial warehouse complexes at a time when “the impairment of mobility made consumer companies realize the importance of having warehousing facilities in various parts of the country in order to maintain efficient logistics.” “The company has a strong balance sheet and is capitalizing in the strength of its financial position in light of these unsettled times,” Mr. Sia said.

Moreover, DoubleDragon is now in “advance preparations” for the filing of its real estate investment trust offering, which will list its first basket of mature income-generating assets, according to DoubleDragon Chief Investment Officer Hannah Yulo-Luccini.

On Friday, shares in MerryMart grew by 2.73% to close at P3.01 each, while DoubleDragon’s shares were unchanged at P15.00 apiece.

JG Summit Holdings, Inc. incurred a P720-million loss in the first half of the year, along with an 89% decline in after-tax core profit because of the severe impact of the coronavirus pandemic to some of its businesses.

The listed conglomerate on Friday said the impact of the public health crisis became more pronounced in the second quarter as harsh lockdowns continued to batter its operations, particularly in its airline, petrochemical, and property businesses.

Yet, it qualified that its diversified portfolio helped cushion the pandemic’s blow “with strong profits coming from food, banking, and core investments in telecoms,” according to JG Summit President and Chief Executive Officer Lance Y. Gokongwei.

The period’s net loss, which is a reversal of the firm’s P17.4 billion profit a year ago, came from a one-off mark-to-market valuation loss on fuel hedges and its share in Manila Electric Co.’s (Meralco) impairment on its investment in Singapore-based PacificLight Power Pte. Ltd. in the first quarter.

JG Summit’s food business operating margin and “better” net interest margins, and trading gains in its banking unit helped its core profit to stand at P1.4 billion, compared with the P13.4 billion it recorded in the same period in 2019.

It saw consolidated revenues down by 26% to P116.5 billion in the first semester.

By business segment, Cebu Pacific Air, Inc. posted a 61% drop in total earnings to P17.33 billion, pulled down by reduced passenger, cargo, and ancillary revenues.

JG Summit’s petrochemicals group saw its revenues plunge by 61% to P7.22 billion because of lower average selling prices and volumes.

The earnings decline in both segments was tempered by the topline growth in the conglomerate’s other businesses.

Universal Robina Corp.’s (URC) earnings slightly increased to P67.41 billion on the back of revenue growth in its sugar and branded consumer foods sales.

Robinsons Land Corp. also saw revenue growth of 3% to P15.22 billion, driven by a 66% earnings uptick in its residential division, though, this was offset by a 42% revenue decline from shuttered malls.

Its banking arm, Robinsons Bank Corp., posted a 23% increase in revenue to P4.79 billion, mainly due to higher interest income from finance receivables, which came from loans portfolio expansion and higher trading gains.

The conglomerate claimed having a “strong” balance sheet with gearing and net debt-to-equity ratios at 0.72 and 0.55, respectively, by end-June.

“With the strength of our balance sheet coupled with our organizational capabilities to quickly adapt to the new normal and respond to changing consumer needs, I am confident in our ability to compete and take advantage of emerging opportunities ahead,” Mr. Gokongwei said. Shares in JG Summit fell by 4.96% to close at P61.30 each on Friday. — Adam J. Ang

First Philippine Holdings Corp. (FPH) saw its net profit in the first semester fell by 26% to P3.5 billion as the pandemic pulled down its income from operations.

In a regulatory filing, the Lopez-led holding company saw its topline falter by 21% to P53.9 billion on reduced power and real estate sales.

The company incurred one-off losses due to coronavirus pandemic-related expenses, which reached P235 million. Excluding these, its recurring net income in the period stood at P10.2 billion, lower by 21% from over a year ago.

FPH’s electricity sales declined by 18% to P10.4 billion on lower revenues from First Gen Corp.’s natural gas plants, hydro platform, and geothermal unit.

The power company in a separate disclosure said its recurring attributable profit dwindled by 15% to P6.7 billion in the first half of the year as the decline in power demand worsened in the second quarter when the economy entered into recession.

Its total revenues from power sales fell by 15% to P47.7 billion in the January-June period. First Gen’s natural gas plants delivered P4.5 billion to the holding firm’s recurring revenues, down 16% as it continues to suffer from low electricity sales in the second quarter. Making up 61% of their parent’s revenues, the gas plants posted a 17% drop in earnings due to lower average natural gas prices and a decline in their dispatch.

Energy Development Corp. posted a slightly lower earnings’ share of P2.4 billion because of a slump in revenues from lower electricity prices. It netted P2.4 billion in revenues, forming 36% of First Gen’s topline.

Its hydro platform, First Gen Hydro Power Corp., brought in P200 million, a 68% share decline, due to lower prices at the Wholesale Electricity Spot Market (WESM). Its revenues, which account for 2% of its parent’s earnings, plunged by 47% to P900 million on poor spot market sales.

Meanwhile, FPH’s real estate sales dropped by over half, or 52%, to P2.2 billion because of the combined reduced sales take-up and slow construction completion of Rockwell Land Corp. following quarantine restrictions.

It also earned 23% less from contracts and services, which stood at P3.2 billion, because of the slowdown in construction activities and drilling services of First Balfour, Inc. and ThermaPrime Drilling Corp., as well as the reduced lease revenues of Rockwell’s commercial spaces due to rent concessions.

Merchandise sale earnings dropped by 26% to P805 million as First Philippine Electric Corp. sold fewer electrical transformers after its plant went on a shutdown.

On Friday, shares in FPH inched up 0.25% to close at P59.15 each, while First Gen’s shares declined by 3.83% to close at P22.60 apiece. — Adam J. Ang

Casual dining restaurant group Max’s Group, Inc. further bled as it incurred another loss in the second quarter to shed P602.9 million in the first six months of the year.

In a disclosure to the stock exchange on Friday, the listed restaurant operator said its second- quarter systemwide sales from both company-owned and franchised stories plunged by 68.9% to P1.6 billion. Same-store sales also fell by 55.8%.

Its revenues declined by 71.1% to P1.1 billion between April and June as its local stores were trading via delivery and take-away channels. Its mall sites, comprising almost half of the group’s domestic network, were shut from mid-March to May due to quarantine restrictions.

“The poor performance for the second quarter of the year was, as expected, a result of the historic challenges the industry faces during this global pandemic. We have taken this opportunity to leverage our core sources of strength to underpin a strategic transformation geared towards our eventual recovery,” Max’s President and Chief Executive Officer Robert F. Trota said.

In the first half, Max’s systemwide sales fell by 42.5% to P5.6 billion, with same-store sales declining by 26.5%. Its revenues in the same period also faltered by 46.2% to P3.8 billion.

Despite a volatile business landscape, the company remained committed to renew its business. It is presently diversifying its consumer services and platforms to adapt to changing consumer behavior, Mr. Trota said.

Max’s brands Yellow Cab and Krispy Kreme showed resilience and market relevance during the quarantine phase due to “intrinsic demand” in delivery and take-away channels.

A “progressive” sales recovery of Max’s Restaurant and Pancake House brands was seen after lockdowns were eased to allow dine-in in physical restaurants.

The pandemic’s impact “demanded that we rethink how we can do more with less, and rebuild our foundation for sustainable growth,” said Max’s Chief Operating Officer Ariel P. Fermin.

The restaurant group has “rapidly identified and scaled green shoots,” such as ready-to-cook meal formats, alternative on-the-go services, work-from-home meals, and multi-brand cloud kitchens to widen its reach while addressing consumers’ safety concerns.

Moreover, it has recalibrated its operations through technology transfer across commissaries to avoid redundancies in suppliers, toll manufacturers, and hubs. The company also combined logistics to cut transportation costs and lift service levels via dynamic routing and co-loading.

“At store level, we aim to improve margins through a combination of optimal pricing, rationalized menus, and shared materials across brands and products to leverage on volume,” Mr. Fermin added.

Max’s will “control” its store network expansion and accelerate the closure of unprofitable stores for the rest of the year, minding its adherence to scheduled pipeline, Mr. Trota said. “We believe we have the right strategic fundamentals in place for a robust return to profitability,” he added.

The company is running its store network in 745 locations, with 686 in the Philippines and 59 located in various sites in North America the Middle East, and Asia. About 85% or 630 stores were operational as of end-June.

On Friday, shares in Max’s inched down 0.14% to close at P4.88 each. — Adam J. Ang

Alliance Global Group, Inc.’s (AGI) net income in the first semester plunged by 67% to P4.1 billion as quarantine restrictions limited the operations of its businesses

The Andrew Tan-led firm in a stock exchange disclosure, Friday, said its total revenues between January and June fell by over a quarter to P61.4 billion.

“The country’s strict two-month lockdown weighed heavily on most of our domestic operations,” AGI Chief Executive Officer Kevin L.Tan said. The government placed the country under enhanced community quarantine in mid-March and April.

By segment, its property arm Megaworld Corp. posted a lower income share of P5.4 billion, down 33%. Its total revenues in the first half fell by a quarter to P23.8 billion as the harsh lockdown pulled down its earnings from mall rents, real estate sales and hotel revenues.

Spirits producer Emperador, Inc. delivered a slightly improved profit contribution of P3.3 billion to its parent. The whiskey manufacturer saw flat earnings, which stood at P21.5 billion, as a liquor ban affected its local sales.

Travellers International Hotel Group, Inc., the operator of Resorts World Manila, incurred a P3.7-billion net loss in the period, especially when the quarantine put a temporary halt to its casino gaming operations. Its gross revenues took a 53% dive to P7.8 billion.

Golden Arches Development Corp., also known as McDonald’s Philippines, shed P709 million in the period with total revenues down by 37% to P9.7 billion. From only 38% of the fast-food giant’s stores operating at the start of the lockdown, 84% are trading by May, though, at limited capacity.

Diverse income streams lessened the pandemic’s impact on AGI’s group performance, the company said.

“We take comfort from the fact that we have managed to diversify our sources of income, either by type of products or by geographic contribution, and this has helped us mitigate the impact of this pandemic on our group performance,” Mr. Tan said.

AGI’s digital transformation aided its businesses during the strict community quarantine, according to Mr. Tan. He said that the company has to modify its product offerings and to acquire new skills to adapt to changes in consumer behavior.

On Friday, shares in AGI fell by 2.81% to close at P5.87 each. — Adam J. Ang