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Big business scrambles for revival plan as coronavirus rewrites its future

By Denise A. Valdez, Reporter

WHILE the economic consequences of the global coronavirus crisis remain unclear, this black swan is shaking up both corporate and consumer behavior in a big way. It has precipitated massive changes across industries, showing that not even the world’s corporate giants are immune to the pandemic.

In the Philippines, a number of blue-chip companies have cut capital spending and suspended expansion plans this year, some of them laying off workers to stay afloat. Some of these big companies were forced to shift their focus to their main businesses, ruling out investments in new ventures.

While big companies make up less than 1% of Philippine enterprises, they provide about 3.33 million jobs, or more than a third of the country’s workforce, based on 2018 data.

“I think it is best to be financially prudent,” Manuel V. Pangilinan, chairman of the MVP Group of Companies that has interests in water, power, telecommunications, tollways and healthcare, said at an online media briefing last month.

“We believe that the focus of management has got to be on the existing operations and existing business portfolio of Metro Pacific Investments Corp. (MPIC),” he said, adding that MPIC had “no energy” to invest in new projects, especially overseas.

MPIC, the listed investment company of the MVP Group, is halving its 2020 capital expenditure to P80 billion as it cuts investments in new ventures such as hospitality and logistics. Earnings plunged by 47% in the first quarter from a year earlier to P1.9 billion after the main Philippine island of Luzon was locked down in mid-March to contain the pandemic.

President Rodrigo R. Duterte suspended work, classes and public transportation, ordering Filipinos to stay home except to buy food. He extended the strict quarantine twice for the island and thrice for Metro Manila, where infections are mostly concentrated.

The metro lockdown has been relaxed since June 1 and some businesses have been allowed to reopen with minimal workforce.

“We all say let’s get to the next few months and see where things shake out, because the whole world is second-guessing what recovery may look like,” MPIC Chief Finance Officer David J. Nicol said by telephone on May 24. “Everybody talked of V-shaped and U-shaped recovery, and now I see people talking about a long L. You know, none of us know.”

Fastfood giant Jollibee Foods Corp., which has given McDonald’s Corp. a run for its money in the Philippines, is cutting capital spending to P5 billion from P14 billion.

Property developer Ayala Land, Inc. told stockholders on April 22 it was reducing spending to P70 billion from P110 billion, while port operator International Container Terminal Services, Inc. told the stock exchange on April 24 it was trimming its capex to $100 million from $400 million.

“One thing that we’ve realized during this crisis after some quick self-reflection is, it is very difficult to plan long-term in an environment like this,” Ayala Corp. Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala told stockholders at a virtual meeting on April 24.

NO PLAYBOOK
Earnings of Ayala Corp., the parent company of Ayala Land that has interests in property, banking, telecommunications and water utility dropped by 17% to P6.7 billion in the first quarter after profit at its property, banking and industrial segments fell.

“There is no existing playbook for this kind of situation,” Mr. Zobel said. “We will be monitoring consumer behavior, market behavior, industry regulatory issues and just make an assessment of how the world has changed for us.”

Cebu Air, Inc., which was forced to stop operating budget carrier Cebu Pacific on March 19 due to travel restrictions worldwide, is likewise preparing for a new environment once the situation stabilizes and lockdown measures are eased.

“We are assessing our recovery plan, as the situation remains fluid,” Alexander G. Lao, vice- president for commercial planning at Cebu Air, said in an e-mail. “For now, we are planning for a gradual introduction of our network, but it depends on how things progress.”

He said one key challenge is how travel patterns would change after the quarantine. “While we believe leisure travel will rebound, some other segments will change. Business travel will probably be less as people get used to online meetings.”

The airline operator posted a net loss of P1.18 billion in the first quarter after making a profit of P3.36 billion a year earlier. Passenger revenue went down by more than a quarter to P11.39 billion.

The airline industry has sought support from the government through emergency credit lines, waiver of fees and wage subsidy. Lawmakers have drafted measures including capital infusion to support some industries such as airlines and tourism.

Cebu Air parent JG Summit Holdings, Inc. cut its capital spending this year to P58 billion from P82 billion.

During a stockholders’ meeting on May 14, JG Summit President and CEO Lance Y. Gokongwei said Cebu Air was renegotiating payment and delivery schedules for its aircraft orders. Before the pandemic, the company had planned to replace its older aircraft and expand its fleet to 83 aircraft by 2022 from 75 last year.

Meanwhile, Aboitiz Equity Ventures, Inc. has also cut its spending to P47 billion from P73 billion.

“During the Asian financial crisis, our decision to remain financially prudent (we did not hold any debt) bid well for the company,” said Sabin M. Aboitiz, president and CEO at the listed holding company that has interests in power, banking, food, infrastructure, property and construction.

“We expect the same approach to benefit us as we face the COVID-19 crisis,” he said in an e-mail.

NEW NORMAL
Aboitiz Equity’s net income fell by 42% to P2 billion last quarter, dragged by a 43% drop in contributions from its power unit.

During the pandemic that has sickened more than 18,000 and killed almost a thousand people in the Philippines and in which as many as 10 million people could get laid off, workers at bigger companies are more likely to keep their jobs, Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc. said in a May 21 e-mail.

“Since these companies are huge and well-capitalized, they are poised to overcome the challenges of an economic crisis due to the pandemic, and they can even lend direct support to government efforts directly related to the containment of the virus,” he added.

Cutting capital spending may be the only way for companies to stay afloat, Jervin S. de Celis, a trader at Timson Securities, Inc. said in a mobile phone message. “While this may negatively affect the labor and employment conditions in the country for now, these companies have to survive so they can hire back people when the pandemic is over.”

Talks of a “new normal” have never left boardrooms, but Mr. Asuncion thinks some sectors will find it difficult to adjust until a COVID-19 vaccine is found.

Those offering essential goods and services are expected to recover within months, while nonessential ones such as travel and tourism may take longer.

The Philippine Stock Exchange index (PSEi) has remained volatile, trading between 5,400 and 5,900 since April.

The bourse has since recovered after falling to a record 4,623.42 points on March 19, but foreign investors have been net sellers for 49 out of 52 days from March 12 to May 29.

“The stock market has not digested the full information and may have to wait until earnings results come out,” Mr. Asuncion said. “It will have to adjust soon enough, taking into account potential losses, spending and earnings decline,” he added.

The stock index is likely to end the year at 6,200 to 6,600 points, according to estimates from brokerages BPI Securities Corp. and First Metro Investments Corp.

Mr. Nicol of MPIC said it might take a while before the company goes back to the level it was at when the year started.

“There could be a very sharp contraction in the second quarter,” he said. “The third and fourth quarters will still be below where we were last year. But there will be a distinct uptick trajectory each quarter.”

House passes P1.3-trillion stimulus bill on 2nd reading

By Genshen L. Espedido, Reporter

THE House of Representatives on Monday approved on second reading a P1.3-trillion stimulus package that the government hopes will boost economic growth amid the coronavirus crisis.

Under House Bill 6815 or the Philippine Economic Stimulus Act (PESA), P568 billion will be allocated in 2020 for mass testing (P10 billion); wage subsidies (P110 billion), cash-for-work program (P30 billion); assistance to students (P15 billion); loans for micro, small and medium enterprises or MSMEs (P50 billion); zero interest loans by Land Bank of the Philippines and Development Bank of the Philippines (P50 billion) and loan guarantees (P40 billion).

This year’s allocation also includes assistance to various sectors such as MSMEs (P10 billion); tourism (P58 billion); industry and services (P44 billion); transportation (P70 billion); and agri-fishery (P56 billion) and funding for the National Development Corp (P25 billion) to “minimize permanent damage to the economy.”

For 2021, P80 billion will be allocated for further mass testing (P10 billion), loans for MSMEs (P25 billion), loan guarantees (P20 billion) and additional funding for the National Development Corp. (P25 billion).

Meanwhile, a P650-billion budget for the “Build, Build, Build” program will be spread over three years starting 2021 covering infrastructure projects supporting universal health care, education, and food security.

An estimated 4.1 million employees from the MSMEs are expected to benefit under the economic stimulus package.

The bill also requires the National Economic and Development Authority (NEDA) to submit to Congress a long-term plan for building economic resilience within six months after the lifting of the various forms of quarantine. It also creates an Economic Stimulus Board (ESB) to identify the components of the fiscal stimulus package, and monitor the delivery of each intervention.

A joint Congressional oversight committee will be created to monitor the implementation of the stimulus package. The committee will be comprised of the co-chairpersons of the House economic stimulus cluster, and chairpersons of the Senate committees of Economic Affairs, Ways and Means and Finance.

The bill also authorizes the President to reallocate and realign the General Appropriations Acts of 2019 and 2020, and allocate cash, funds and investments held by any government-owned or -controlled corporations or any national government agency to provide funding support.

The Secretary of Finance is also authorized to direct the National Treasurer to borrow in the form of bonds and loans to fund the provisions of the bill.

“What we badly need is fiscal stimulus to ensure that liquidity is not trapped. With more government spending, business confidence can return, animal spirits are awakened, and bullish markets can eventually return. Kailangang kumilos ang gobyerno para siguradong makautang ang maliliit na negosyo at gamitin ang utang sa tamang paraan (The government has to act to ensure that small businesses can get loans and use these in the right way),” Marikina Rep. and co-chair of the Defeat COVID-19 Committee’s economic stimulus cluster Stella Luz A. Quimbo said during her sponsorship speech on May 27.

During the House plenary, the measure was amended to require the government to give preference to products, materials and supplies made in the Philippines when making procurements to implement relevant provisions of the bill.

The bill was also amended to define mass testing as “testing of all individuals…who are at high-risk of contracting COVID-19 infections.”

The bill will still have to be approved on third reading, before it will be transmitted to the Senate.

Meanwhile, the Joint Foreign Chambers of the Philippines (JFC) urged Congress to approve the PESA bill as soon as possible.

“We encourage the House plenary to approve the historical measure on 2nd Reading on June 1 and 3rd Reading on June 4 before its scheduled recess. The Senate is considering six stimulus bills given the very large amounts being considered and the forthcoming recess we ask the Congress to approve the final legislation soon after resuming session in late July to provide very needed funds for economic recovery,” the JFC said in a statement.

The statement was signed by the American Chamber of Commerce of the Phils., Inc., Australian-New Zealand Chamber of Commerce Phils., Inc., Canadian Chamber of Commerce of the Phils., Inc., European Chamber of Commerce of the Phils., Inc., Japanese Chamber of Commerce & Industry of the Phils., Inc., Korean Chamber of Commerce of the Phils., Inc. and the Philippine Association of Multinational Companies Regional Headquarters, Inc.

Meanwhile, the House of Representatives also approved on 2nd reading House Bill 6865 which seeks baseline COVID-19 testing for the vulnerable members of society.

It also approved on third and final reading House Bill 6505 which seeks to grant full insurance coverage to all qualified agrarian reform beneficiaries of the Comprehensive Agrarian Reform Program.

Phoenix swings to loss in volatile market

By Adam J. Ang

PHOENIX Petroleum Philippines, Inc. (Phoenix) reported a P215 million net loss in the first quarter, reversing its P415 million net income recorded in the same period in 2019, as overall revenues and volume declined on volatility in the oil market.

In the first three months of 2020, the fuel company saw its total volumes down 5% despite “strong” growth in its retail and liquified petroleum gas (LPG) segments, while its overall revenues went down by 9% as average selling prices followed that of the decline in global oil prices.

“We were not spared but we were able to navigate the downturn better because of our earlier investments in strategic, higher-margin areas such as retail and LPG,” Phoenix Petroleum Chief Executive Officer Dennis A. Uy said in a statement.

The listed independent oil firm noted a 39% increase in LPG volumes in the January-March period, while its retail volume also went up by 9%, building on the progress of its network expansion last year.

“Our portfolio today is more diversified, with LPG particularly thriving in this pandemic. From a non-essential item in the kitchen, LPG became an essential household product, especially during the Enhanced Community Quarantine (ECQ),” Mr. Uy said.

“Despite the healthy performance of its LPG and Retail segments, the downturn in Commercial business and the unfavorable global oil environment pushed [Phoenix] into reporting a loss of P-215mn for the quarter,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message.

By March, Phoenix runs 660 fuel stations in the country.

The oil company’s first-quarter performance was “challenged” by the Taal Volcano eruption in January and the global coronavirus disease 2019 (COVID-19) pandemic, along with the government’s lockdown measures, according to Philstocks Financial, Inc. Senior Research Analyst Japhet Louis Tantiangco.

“The said factors have led to lower oil demand as seen in the decline in the sales volume of the company. This, coupled with the lower average selling prices, led to a 9% decline in consolidated revenues,” he said.

The company has kept its inventory levels to half of terminal capacity, alleviating the burden on its working capital.

It has cut cash requirements by P2.3 billion this year, P1.5 billion of which is from capital expenditure reduction and the remaining P800 million is from savings from marketing, advertising, and travel, as it shifted to digital channels.

During Phoenix’s annual stockholders’ meeting last Friday, shareholders approved the company’s initial P57 million capital provision for its upcoming road transport business unit.

They also supported its P4.9-billion investment in Duta, Inc., Phoenix’s property holding subsidiary, over the next three years.

“Moving forward, with the longer quarantine periods in the [second] quarter, together with the depressed international oil prices including the plunge in April, we may see further weakness in [Phoenix’s] upcoming financial results,” Mr. Tantiagco said.

Separately on Monday, Phoenix named Henry Albert R. Fadullon as its new president, a position previously held by the company’s founder Mr. Uy.

Mr. Fadullon has served as Phoenix’s chief operating officer since 2017. Mr. Uy will become the chairman of the board and chief strategy officer.

Phoenix also sought to amend its corporate term to a perpetual existence from 50 years previously.

On Monday, shares in Phoenix fell by 1.91% to close at P11.28 each.

House panels want Lopez in ABS-CBN franchise hearings

By Genshen L. Espedido, Reporter

TWO panels at the House of Representatives are calling on ABS-CBN Corp.’s Chairman Emeritus Eugenio Gabriel L. Lopez III to attend the next hearings on the franchise renewal of the media network.

“I saw the agenda and I think we will discuss the issue of citizenship. I think there are questions that are personal to him. I would not know how to deal with this, Mr. Chair, if he is not present,” Deputy Speaker Rodante D. Marcoleta said during the joint hearing of the House committees on legislative franchises, and good government and public accountability on Monday.

After Mr. Marcoleta’s manifestation, Palawan Rep. and House committee on legislative franchises chair Franz E. Alvarez ordered the secretariat to send an invitation to Mr. Lopez. The two committees will convene again on Wednesday morning to resume their deliberations on the network’s franchise.

ABS-CBN Chief Executive Officer Carlo Joaquin Tadeo L. Katigbak said that Mr. Lopez is a natural born Filipino citizen given that his parents are both Filipinos.

“Totoo po na may US passport si Mr. Lopez. Ito ay dahil ipinanganak siya sa America, at sa batas ng America, kahit hindi Amerikano ang magulang mo, kapag ipinanganak ka sa US, automatic po na may hawak ka rin na American citizenship,” he said during the joint hearing.

(It’s true Mr. Lopez has a US passport. This is because he was born in America, and under its laws, even if your parents are not American, if you’re born in the US, you automatically hold American citizenship.)

“The fact that he holds a US passport does not negate in any way his Filipino citizenship from birth,” Mr. Katigbak added.

Meanwhile, Solicitor General Jose C. Calida said he was not at “loggerheads” with Congress on the issue of the media network’s franchise.

“I only cautioned the NTC (National Telecommunications Commission) of its possible encroachment on the legislative power in issuing a provisional authority without a law authorizing such action. I never mentioned the name of Speaker (Alan Peter S.) Cayetano and any congressman in my advisory letter to the NTC or in any of my subsequent press releases,” he said.

The two House panels called on Mr. Calida last week to join the hearings on ABS-CBN’s franchise, noting that they would “resort to compulsory processes” if he failed to join the succeeding meetings.

During the hearing of the House committee on legislative franchises on March 10, the NTC told lawmakers that it would issue a provisional authority allowing ABS-CBN to operate while Congress hears its franchise renewal.

On May 5, the commission issued a cease-and-desist order against the media network instead, forcing ABS-CBN to stop its broadcast operations.

Fruitas plans debt cut, holds back foodparks

Fruitas Holdings, Inc. (Fruitas) is postponing plans to expand its foodpark business to invest P25 million from its initial public offering (IPO) proceeds in debt repayment.

In a stock exchange disclosure Monday, the food and beverage kiosk operator said its board of directors approved tweaking the previously announced allocation of its P820 million proceeds from last year’s public offer.

The P150-million allocation for debt repayment, which was already disbursed in 2019, will be increased to P175 million as it takes the budget originally allocated for foodpark expansion.

“Since there is no immediate funding requirement for its foodpark business, the company’s board decided to re-allocate the funds to further reduce the debt level of the group, which will also reduce its interest expense,” it said.

Allocations for other projects will remain as is: P470 million for store network expansion and improvement, P40 million for commissary expansion, and P135 million for acquisitions and introduction of new concepts.

Specifically, P147 million of the P470 million budget for store network expansion will be disbursed to Fruitas subsidiaries through new equity or advances this year. “While the subsidiaries await full deployment of the funds, this will be used by the subsidiaries as working capital,” it said.

The P40-million budget for commissary expansion will be used to upgrade Negril Trading commissaries, the buko water commissary in Quezon City and a Cebu commissary within the year. Fruitas also previously said it bought a property in Sasa, Davao City to be used as office and warehouse.

The P135-million budget for acquisitions and introduction of new concepts will be disbursed from 2020 to 2021. Fruitas has so far completed four acquisitions since its IPO in November.

The company earlier said it was setting aside P270 million for capital expenditures this year. “Fruitas is cognizant of potential changes in the market and may update and/or re-allocate its 2020 capex budget accordingly,” it told the stock exchange on May 29.

“The store network expansion and store improvement program for 2020 will cover establishment of new stores, and improvement of existing stores, including expansion or conversion of some stores into potential CocoDelivery hubs. This also includes an allotment for the purchase of delivery vehicles to support the expanded network and reach our customers more efficiently,” the company added.

Shares in Fruitas at the stock exchange ended flat on Monday at P1.25 apiece. — Denise A. Valdez

Shakey’s net profit falls 35% on store closures

SHAKEY’S Pizza Asia Ventures, Inc. (Shakey’s) posted a 35% drop in net income for the first quarter as operations in its restaurant chain were halted by the Luzon-wide lockdown in March.

In a statement Monday, the restaurant chain operator said its net income fell to P114 million in the three-month period as gross revenues ended flat at P1.83 billion.

It noted it was recording a 21% systemwide sales growth in the first two months of the year, but it dropped in the following month with the implementation of quarantine restrictions in relation to the coronavirus disease 2019 (COVID-19) pandemic.

Only 9% of Shakey’s network of 290 stores were operational in the second half of March, and these stores were only servicing delivery and carry-out customers. Shakey’s ended the quarter with systemwide sales of P2.3 billion.

“The temporary closure of a significant number of our stores, combined with the impact of operating leverage and various fixed costs, dampened our bottom line during the period. We expect the second quarter to be worse, possibly the most challenging I’ve experienced in my career, as we feel the full effects of limited operations and incremental costs due to the crisis,” Shakey’s President and Chief Executive Vicente P. Gregorio was quoted in the statement as saying.

But he noted the company has made efforts to gradually reopen its store network. Some 256 stores or 91% of Shakey’s network have already resumed operations.

“We are grateful that our multi-channel and multi-format approach…has allowed us to weather through the challenges… We were able to re-open stores located outside malls early into the quarantine period, and our existing delivery and carry-out platforms gave us a strong base from which to build and support the growth in in-home food consumption,” Mr. Gregorio said.

“All these, I believe, put Shakey’s in a good position to bounce back, macro environment permitting,” he added.

Shakey’s stores that are not located in malls make up 46% of its store network. Sales from delivery and carry-out services made up 37% of its total sales for the period.

“We are… taking a more prudent approach over the next few months… In the meantime, we will continue to enhance and invest in existing delivery, digital, and carry-out platforms — building on what we have, as well as introducing new and exciting innovations,” Mr. Gregorio said.

Shares in Shakey’s at the stock exchange grew 27 centavos or 4.66% to P6.07 each on Monday. — Denise A. Valdez

AllHome doubles 2019 net income to P1.1 billion

VILLAR-LED AllHome Corp. (AllHome) doubled its net income in 2019 to P1.1 billion as revenues surged on the back of an aggressive store expansion.

In a statement Monday, the listed home development retailer said its 2019 performance marked a banner year for the company, as revenues shot up 68% to P12.1 billion.

“Together with AllHome’s debut in the stock market, 2019 was a milestone for the company also in terms of operations as we registered strong growth in both topline and bottomline numbers… We are very pleased with the company’s solid performance in achieving our full year target,” AllHome Chairman Manuel B. Villar, Jr. said in the statement.

The company attributed its robust performance last year to the opening of 22 new stores across the Philippines. This raised AllHome’s total assets to 45 stores, comprising 22 large mall-based, 10 large free-standing and 13 specialty stores.

AllHome President Benjamarie Therese N. Serrano said the company’s plan is to introduce new store formats to expand AllHome’s customer base.

“We will launch the first phase of AllHome which will be carrying majority of our Hard categories, to areas where it’s still in the early stage of housing construction with a plan to eventually expand it to a regular AllHome once home buyers ‘start to move-in’,” Ms. Serrano said.

AllHome said the coronavirus disease 2019 (COVID-19) pandemic has been posing a threat to its supply chain. But it said the proceeds from its stock market listing last year gives the company a layer of financial security to continue store expansion.

“We believe that the home improvement industry will bounce back as soon as the lockdown is lifted as there will be pent-up demand after staying at home for almost three months,” AllHome Vice-Chairman Camille A. Villar said.

AllHome has started reopening its store network as quarantine restrictions have started to ease. But as the COVID-19 pandemic still lingers, it will be maintaining safety protocols in stores such as requiring face masks and temperature checks and maintaining physical distancing of one to two meters for customers.

The company has also opened an online shop to accommodate customers without having to go to its physical stores.

Shares in AllHome at the stock exchange fell five centavos or 0.93% to P5.31 each on Monday. — Denise A. Valdez

Cebu Landmasters’ earnings dip 4% on higher costs, expenses

By Denise A. Valdez, Reporter

PROFITS of Cebu Landmasters, Inc. (CLI) slid 4% in the first quarter as its operating expenses outpaced the growth of its revenues.

In a regulatory filing Monday, the listed property developer said its net income attributable to the parent company stood at P572.23 million in the three-month period, down from P598.54 million in the same period last year.

Consolidated revenues improved 13% to P2.11 billion, lifted by growth across its various business segments and new contributions from its hotel segment, which opened in September 2019.

Real estate sales contributed P2.06 billion, higher by 11% due to increased sales in its properties in Cebu, Bacolod and Cagayan De Oro. But consolidated reservation sales dropped 27% to P2.82 billion due to the delay in launching new projects in the first quarter.

Commercial leasing added P16.6 million in revenues, up 13% from a year ago. This was attributed to CLI’s larger gross leasable area totaling 14,302 square meters (sq. m.) from last year’s 10,110 sq. m. The company finished the quarter with an occupancy rate of 87%.

Property management fees jumped 85% to P10.24 million after CLI completed and turned over two projects in 2019. Hotel operations opened a new revenue stream which contributed P20.69 million during the period.

However, the growth in its topline was dragged by higher costs and expenses. Cost of sales and services rose 27% to P1 billion due to construction work in new and existing projects and costs from hotel operations. Operating expenses grew 37% to P264.83 million due to an increase in salaries and employee benefits.

The company said it plans to take on 2020 with the launch of 14 new projects worth P19.4 billion. “We expect demand for quality housing and residential units to rise prompted by the greater desire for safer and better planned living environments in the aftermath of COVID 19 (coronavirus disease 2019 pandemic),” CLI Chairman and CEO Jose R. Soberano III said in a statement.

“Over the years, CLI has built a reputation for offering great value to its buyers and is ideally positioned to serve this rising demand,” he added.

In an online investors’ briefing yesterday, CLI Chief Finance Officer Beauregard Grant L. Cheng noted the company has already showed recovery in terms of reservations sales in April and May, which stood at P2.02 billion for the two months against P1.39 billion in the whole of second quarter last year.

“Despite the challenging environment, we were still able to generate P2 billion worth of reservation sales in April and May this year… [W]e already outpaced that of quarter 2 last year. This is a testament to how our business model has been able to adapt,” he said.

CLI is focusing on economic vertical and horizontal housing this year, especially in the Visayas and Mindanao regions where recovery is expected to unfold faster.

Mr. Soberano said CLI is setting its performance guidance for 2020 at plus or minus 10% for both its topline and bottomline.

“As we are quick to adapt to this new normal and catch-up to 100% site operations, we are aiming to achieve a full-year guidance that will closely match 2019 levels,” he said.

Shares in CLI at the stock exchange increased two centavos or 0.54% to P3.71 each on Monday.

Apex income up 28% on gold, silver prices

MINING company Apex Mining Co., Inc. reported a 28% increase in its consolidated net income for 2019 to P306 million due to higher gold and silver prices.

In a disclosure to the stock exchange on Monday, the company said its parent company net income before the share of subsidiaries’ losses rose 6% to P351 million.

Apex Mining’s revenues likewise climbed 6% to P5 billion, while the average gold price last year was at $1,389 per ounce while silver was priced at $16.1 per ounce.

In a statement, Apex Mining President and Chief Operating Officer Luis R. Sarmiento said the higher milling tonnage and recovery rates helped in augmenting the company’s lower gold output while increasing its silver production.

“The strengthening of the metal prices towards the latter part of the year, with gold breaking above $1,500 per ounce and silver reaching $17 per ounce, somewhat offset our lower production,” he said.

Milling throughput of the company’s Compostela Valley-based Maco mine increased to 711,788 tons, equivalent to a daily average of 2,063 tons while mill recovery was at 85.5%.

However, Apex Mining said its ore grade fell to 3.19 grams of gold per ton and 20.47 grams of silver per ton. The mining company sold 2% lower gold at 64,763 ounces while silver went up 22% to 369,616 grams.

“We could have produced more gold ounces this year were it not for the lower ore grade which we had to contend with passing through the lower grade zones of the Maco mine in the first half of the year,” Mr. Sarmiento said.

Apex Mining said the rehabilitation and construction work at the Benguet-based Sangilo mine of its wholly owned subsidiary Itogon-Suyoc Resources, Inc. continued in 2019.

The target operating date was moved to the first week of July due to the community quarantine imposed in Benguet province, as a result of the coronavirus pandemic.

“Developments are awaited over the Sampaguita gas field offshore northwest of Palawan covered by Service Contract 72 where wholly owned subsidiary, Monte Oro Resources & Energy, Inc. holds a 30% participating interest,” the company said.

On Monday, shares in Apex Mining rose 5.62% or P0.05 to close at P0.94 each. — Revin Mikhael D. Ochave

BDO boosts loan loss provisions by P20 billion

BDO UNIBANK, Inc. has increased its loan loss provisions to P22.1 billion as it factored in the impact of the coronavirus disease 2019 (COVID-19) and the government’s lockdown measures.

In a filing with the local bourse on Monday, BDO said it is boosting its loan provisions by P20 billion, which will add to the P2.1 billion it had already set aside in the first quarter.

“The move, following a comprehensive review of its loan portfolio, is anticipatory in nature and is meant to safeguard the bank’s balance sheet,” the bank said.

“With these additional provisions, BDO expects that its coverage ratio will remain strong and among the highest in the country,” it added.

The Sy-led lender said it will also allocate a total of 170 basis points as anticipated credit costs for the pandemic.

Citing government estimates that economic output could shrink by as much as 3.4% this year, BDO is factoring in a possible increase in delinquencies due to the disruptions in business operations, tightness in corporate activity, as well as a drop in consumption.

“While the bank expects an increase in the NPL (nonperforming loan) ratio, actual write-offs or losses are seen to be much less. Despite the additional provisions, the bank’s capital adequacy ratio is expected to remain stable…,” BDO said.

The lender’s NPL ratio was at 1.3% in the first quarter, while NPL cover was at 151.4%.

BDO’s capital adequacy ratio stood at 13.8% while common equity Tier 1 ratio was at 12.7% as of the first quarter. Total capital base reached P372.2 billion.

Aside from the additional loan loss provisions, BDO also declared cash dividends for the second quarter at P0.30 per share payable on June 29 to all stockholders of record as of June 17.

The bank’s net income dropped by 10.2% to P8.8 billion in the January to March period from the P9.8 billion recorded a year ago, dragged by the impact of the weak capital market to its investment portfolio. Meanwhile, net interest income amounted to P33 billion.

BDO’s shares ended trading at P99 apiece on Monday, down by P1.40 or by 1.39% from its Friday close. — L.W.T. Noble

PLDT Enterprise backs pandemic-hit businesses

THE Enterprise business of PLDT Inc. said it is ready to enable businesses trying to survive the coronavirus pandemic by helping them digitize their products and services.

“Technology has become a critical tool for businesses wishing to thrive during and after the pandemic. PLDT Enterprise — the b2b arm of the Philippines’ leading ICT and digital services provider — aims to support businesses in this endeavor with its latest strategic thrust,” PLDT Enterprise said in a statement on Monday.

It said that in order for enterprises to operate under the new business landscape, they should invest in digital technologies that would “strengthen their resilience and enable them to mitigate disruptions in the future.”

It noted that the coronavirus pandemic has caused the recalibration of business models among organizations.

“For instance, digital learning has now been put into the mainstream, brick-and-mortar businesses were forced to adopt e-commerce platforms, and multiple other industries sought to provide contactless transactions. And PLDT Enterprise intends to support more businesses in these digital transformation initiatives with its wide range of fixed, wireless, and ICT solutions,” PLDT Enterprise said.

Juan Victor I. Hernandez, senior vice-president and head for PLDT and Smart Enterprise Business Groups, said: “We at PLDT Enterprise stand with all the organizations in the private and public sector. As an ICT provider, we place it upon ourselves to help businesses rediscover and reinvent themselves using technology.”

He said the goal of PLDT Enterprise is to make a positive impact on every business.

“We wish to do that by providing the information and communications technology requirements of businesses across industries that will enable them to become more resilient and prepared for any other future disruption,” he said further.

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

Malls try to woo back shoppers

SHOPPING MALLS continue to implement health and safety protocols to ensure their customers can have a safe shopping experience, as Metro Manila is now under a general community quarantine.

Following government guidelines, mall operators are implementing standard health protocols such as requiring all customers to wear face masks and conducting temperature checks upon entry.

Malls have also placed hand sanitizers, alcohol dispensers and foot baths at entrances. A few open shops have also provided alcohol dispensers for customers.

For some shoppers, the malls’ measures give them some peace of mind, despite worries about the coronavirus.

Marie Soriano (not her real name) has not gone to a mall since the implementation of the enhanced community quarantine in mid-March.

“Nakakapanibago mag-punta sa mall ngayon. Maganda na may mga alcohol pero medyo nakakakaba pa rin, even if naka-mask na (I’m not used to going to the mall today. It’s good that there is alcohol but still kind of nervous, even if I wear a mask),” she said before going inside the Ayala Trinoma Mall in Quezon City.

To discourage people from lingering, mall operators are required to set the air conditioning temperature at 26 Celsius and to remove free Wifi.

Malls are also limiting the number of people allowed to go inside, and to implement social distancing. Customers are asked to observe a two or three-step gap when using the escalator, while floor markings indicate where customers are supposed to stand while in line.

Araneta City opened its three Quezon City malls — Farmers Plaza, Gateway Mall and Ali Mall — on Monday. Since Farmers Plaza and Gateway are adjacent to the Metro Rail Transit Line 3 and Light Rail Transit Line 2, respectively, the company said it is implementing heightened security and sanitation at the entrance of the two malls.

“As we slowly go back to our usual daily routine, we continue to comply with the directives of the national and local government. This is to ensure that the City of Firsts will remain a safe place for everyone,” Antonio T. Mardo, senior vice-president for operations of Araneta City, said in a statement.

SHOPPING
To cater to customers who are still wary of going outside, some mall operators are now offering personal shopper services, as well as online delivery or pick-up services.

Vista Mall and its anchor stores AllHome and All Day Supermarket have expanded personal shopper services amid the “new normal.”

“Adopting new and innovative ways to enable customers to still purchase essentials and other needs for their homes has become a priority for Vista Mall and its business partners,” the Villar-led company said in a statement.

AllDay Supermarket launched its personal shopper delivery service at the onset of the enhanced community quarantine. Other brands under the AllValue Group such as AllHome, AllSports, AllToys and Finds Discount Store, which have stores at Vista Malls, also offer the personal shopper service through Viber. Customers can have the items either delivered or picked up.

At Ayala and Robinsons Malls, customers can order in advance from selected open mall tenants via phone call or SMS and get the order at the designated stations outside the mall. Ayala Malls has a service called DriveBuy, while Robinsons Malls has pickup stations in Robinsons Place Manila, Robinsons Galleria and Robinsons Magnolia. — Cathy Rose A. Garcia

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