Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 8260

Fruitas posts 41% higher earnings on lower expenses

EARNINGS of Fruitas Holdings, Inc. grew 41% in the first quarter on the back of cost-saving measures despite a double-digit decline in revenues.

In a statement Tuesday, the listed operator of food and beverage kiosks said its first quarter net income stood at P14.6 billion, higher than the P10.3 billion it recorded in the same period last year.

Revenues were tempered by the Luzon lockdown that came with the coronavirus pandemic, falling 12% to P374.1 million. The company said it had to temporarily suspend operations for most of its stores to observe the government’s quarantine restrictions.

Gross profit ended 9% lower at P224.3 billion, although gross profit margin improved to 60% from last year’s 58% due to tactical price adjustments that were carried over this year.

What helped Fruitas cushion its bottomline was reducing its operating expenses, which went down 15% to P172 million excluding depreciation and amortization.

“We experienced strong sales growth in the first quarter of 2020, although it was cut short by the quarantine. However, the cost containment measures we had earlier implemented, as well as our flexible cost structure, allowed us to cut costs to deliver higher net income in the first quarter of 2020 compared to 2019,” Fruitas President and CEO Lester C. Yu said in the statement.

He noted the company had a harder time in the second quarter because of the longer period of lockdowns across different regions, but its plan is to keep resuming operations at its stores to start recovery.

“The second quarter has been more difficult for us, but we look forward to reopening more stores, so the combined strength of our traditional channels and new revenue streams from delivery and partnerships can provide even better returns for our shareholders,” Mr. Yu said.

Fruitas previously said it had set its capital expenditures this year at P270 million, which it will direct to conversion or expansion of some existing stores.

The company ended 2019 with 1,068 stores in its portfolio. It owns brands such as Fruitas Fresh from Babot’s Farm, Buko Loco, Buko ni Fruitas, De Original Jamaican Pattie, Johnn Lemon, Juice Avenue, Black Pearl, Friends Fries, The Mango Farm, 7,107 Halo Halo Islands, Kuxina, Shou La Mien Hand Pulled Noodles and Sabroso Lechon.

Shares in Fruitas at the stock exchange recorded a one centavo or 0.77% uptick to P1.31 each on Tuesday. — Denise A. Valdez

PetroEnergy profit down 4% on lower wind power, new geothermal pricing

YUCHENGCO-LED PetroEnergy Resources Corp. saw its first-quarter earnings declined by 4% due to the lower contribution of its wind assets and the impact of electricity sales repricing of its geothermal plant.

The power company netted an attributable income of P126.04 million in the first three months of 2020, lower compared with P131.61 million it posted in the same quarter in 2019, based on its stock exchange disclosure on Tuesday.

Its total net income fell by 8% to P199.84 million from P216.96 million in the same period a year ago.

The company’s earnings were affected by the repricing of the electricity sales contract of Maibarara Geothermal, Inc. (MGI) to P4 per kilowatt-hour in mid-2019. The lower net income share of PetroWind Energy, Inc., as a result of the decline in wind speeds in the quarter, also contributed to the income slump.

However, it was partially offset by the increase in PetroSolar Corp.’s first-quarter income, which is lifted by the entry of the 20-megawatt Tarlac Solar Power Project (TSPP) 2 by PetroSolar Corp.

A 21% growth in oil revenues to P101.68 million also tempered the income drop. The revenue uptick was due to the contribution of newly opened production wells in the Etame block in Gabon, West Africa, which raised lifting volumes to 1.4 million barrels of oil (mmbo) from 1.1 mmbo.

PetroEnergy is engaged in both power generation from renewable sources, and oil exploration and production.

PetroGreen Energy Corp., which owns and manages MGI, PetroSolar, and PetroWind, is the renewables arm of PetroEnergy.

Both units of MGI’s Maibarara geothermal plants run continuously in the January-March period and delivered a total energy output of 64,665 megawatt-hours (MWh).

PetroWind’s Nabas project in Aklan province generated 35,479 MWh of energy in the same period.

PetroSolar’s TSPP 2, which is still in the testing and commissioning phase, produced 7,809 MWh of electricity in the quarter.

In February and March, the Department of Energy provided PetroSolar with certificates of confirmation of commerciality and endorsement for TSPP 2, respectively. The endorsement is a prerequisite to the issuance of the compliance certificate, which in turn will determine when the solar plant will officially run.

Meanwhile, PetroEnergy is part of a consortium that is involved in the exploration, exploitation, and production of the 307,360-hectare Etame block under a contract with the Gabonese government.

It has a 2.53% minority stake in the group. Other parties to the Etame contract are Addax Petroleum Etame, Inc. with 33.90%; Sasol Petroleum West Africa Limited with 30%; and VAALCO Gabon (Etame), Inc., the block’s operator, with 33.58%.

The consortium was able to develop four oil fields, namely: Etame, Avouma, Tchibala, and Ebouri. These prospects yielded 112 mmbo between 2002 and 2019.

It is still developing new oil prospects which are expected to raise the field’s output to 22,000 barrels of oil per day (bopd) from 11,000 bopd.

Last year, PetroEnergy reported a 23% drop in net income to P533.93 million, compared with P694.91 million it posted a year ago.

Its bottom line in 2019 was hit as oil income fell with lower crude volumes and prices.

On Tuesday, shares in PetroEnergy expanded by 3.45% to close at P3 each. — Adam J. Ang

Broadway theaters to remain closed until Jan. 2021

BROADWAY theaters will remain closed through Jan. 3, 2021, industry group the Broadway League said on Monday, extending their coronavirus-related shutdown for another four months.

The New York City theaters, which went dark in mid-March, had previously set a tentative reopening date of Sept. 6, but social-distancing requirements for audiences, actors and production staff have made it impossible for plays and musicals to resume.

Thirty-one Broadway shows were in production when the shutdown began. Those that come back are expected to resume over a series of rolling dates in early 2021, the Broadway League said in a statement. The organization is developing safeguards to help prevent the spread of the coronavirus among audience members, actors and staff.

Producers of some shows, including the stage musical version of the Disney film Frozen, have said they will not return at all.

Others are looking even further ahead to the spring of 2021.

The debut of The Music Man, starring Hugh Jackman, was shifted to May 2021 from October 2020.

Music Man rehearsals were to have begun June 29, but due to the ban in New York City on large gatherings, they were rescheduled to early February. — Reuters

Security Bank to close bond offer ahead of schedule on strong demand

SECURITY BANK Corp. will close its offer of two-year bonds on July 3, Friday, more than a week ahead of schedule, after seeing strong reception for the issue.

Security Bank Executive Vice-President and Treasurer Raul Martin A. Pedro said in a statement on Tuesday that the strong demand seen prompted the bank to cut the offer period to July 3 from the initial closing date of July 15.

“We appreciate the overwhelming support that our investors and clients have been giving our bond offer. In view of the strong demand we have received so far, we are shortening the offer period,” Mr. Pedro was quoted as saying.

The listed bank is offering P5 billion in two-year peso denominated bonds with a fixed interest rate of 3.125% per annum.

The lender also has the option to upsize the volume it will accept.

The issue has a minimum investment of P1 million and increments of P100,000 thereafter.

Security Bank said the offer forms part of the bank’s P100-billion peso bond and commercial paper program.

The bond program was established in December 2018 with an initial amount of P50 billion, which was eventually increased to P100 billion.

The bank is looking to list the bonds on the Philippine Dealing and Exchange Corp. on July 24.

Philippine Commercial Capital, Inc. (PCCI) is the sole bookrunner of the transaction. PCCI and Security Bank Capital Investment Corp. are the joint lead arrangers and selling agents for the issuance.

The latest issue will be the second for the bank this year following the P2 billion in 5.5-year long-term negotiable certificate of deposit (LTNCD).

The lender is also awaiting central bank approval for its P50-billion LTNCD program.

Security Bank saw its net income jump 21% from a year ago to P2.9 billion in the first quarter, with its revenues rising by 75% to P13.2 billion on the back of strong growth in its core income and trading gains.

As of March 31, the lender had total assets of P784.4 billion.

It currently has 309 branches and 839 automated teller machines all over the country.

Security Bank’s shares slipped by P1 or 0.96% to close at P103 apiece on Tuesday from Monday’s close of P104 each. — B.M. Laforga

Century Pacific boosts income target as canned food demand rises

CANNED food manufacturer Century Pacific Food, Inc. (CNPF) is expecting to record a high-teens growth in its bottomline this year due to the increased demand for its products in light of the coronavirus pandemic.

CNPF Executive Chairman Christopher T. Po told stockholders in a meeting Tuesday the company continues to record heightened demand for its products several months into the pandemic.

“We anticipate ending the year surpassing our typical target of 10–15% growth. We are looking instead to deliver high-teens type of earnings growth, or better, this 2020,” Mr. Po said.

CNPF posted a 31% earnings jump in the first quarter to P1.04 billion due to the surge in local demand for its products with the imposition of a Luzon lockdown in March.

Panic buying as a result of the lockdown lifted the company’s consolidated revenues 24% to P12.1 billion, coming mostly from the 31% growth in revenues from its branded business.

Mr. Po said CNPF is targeting to double its business over the next five years, sustaining growth of 10-15% compounded annually in both top and bottomline.

He noted the company has recorded a 15% compounded annual growth rate from 2014 to 2019, doubling revenues to P40.6 billion from P20.4 billion and net income to P3.1 billion from P1.6 billion.

“We are entering both a new decade and a new five-year growth cycle well-positioned to sustain this positive momentum. And we, as a team, are highly motivated to continue delivering similar results,” Mr. Po said.

CNPF is setting a P2.1 billion budget for capital expenditures this year, which will be supported by internally generated funds. This will cover expansion plans such as in its meat facility in Laguna, which is scheduled to finish works by the first quarter of 2021.

“It is a unique feature of our business that we are able to do well in both good times as well as the more challenging ones. In good times, we are aiming to consistently grow two times (the country’s gross domestic product). But during more challenging periods, we can even outperform given the nature of our products,” Mr. Po said.

CNPF is the manufacturer of food brands such as Century Tuna, Argentina, 555, Angel and Birch Tree.

Shares in the company at the stock exchange ended Tuesday’s session up 10 centavos or 0.69% to P14.60 apiece. — Denise A. Valdez

Murdochs may be potential investors in Art Basel owner

RUPERT MURDOCH, the entertainment and media mogul, is interested in providing capital to MCH Group AG, the company that organizes Switzerland’s Art Basel shows, Swiss newspaper Finanz und Wirtschaft reported on Saturday.

MCH Group announced earlier in June that it is examining a capital increase to finance investments aimed at implementing its corporate strategy. The group said it was looking for new investors, as well as existing shareholders, to participate in the capital raise.

The Swiss events company is in advanced discussions with interested parties and James Rupert Murdoch, son of Rupert Murdoch and former chief executive officer of Twenty-First Century Fox, Inc. who is negotiating the possible investment on his father’s behalf, according to the Swiss newspaper, which cited sources it didn’t identify.

MCH Group declined to comment to Bloomberg.

The company said on Wednesday that its majority owner, the Swiss canton of Basel-Stadt, holds a 33.5% stake and has decided to waive its subscription rights in the capital raise, allowing for a potential new investor to take majority control. The canton’s government has also approved the conversion of a 30 million-Swiss franc ($32 million) loan into share capital.

The event organizer has been badly affected by lockdowns and bans on public gatherings in recent months as governments have tried to restrict the spread of the coronavirus.

The MCH group decided to completely cancel its flagship Art Basel show, which was originally scheduled to take place in June, amid worries about health risks and global travel restrictions.

The decision was made after talks with galleries, collectors, partners, and experts, event organizer MCH Group said in a statement Saturday. Earlier this year, MCH postponed Art Basel, which was originally supposed to take place this month.

Art Basel joins dozens of other fairs and auctions that have been delayed or canceled due to the coronavirus, including the Venice Biennale.

“Our teams are now focusing on the digital offerings around Art Basel, as well as on the realization of Art Basel in Miami Beach and Design Miami in December 2020,” MCH Group Chief Executive Officer Bernd Stadlwieser said.

The show in Basel, Switzerland, drew crows of 93,000 people last year and was the largest contributor to the group’s profit, according to Finanz und Wirtschaft. MCH Group’s market capitalization is approximately 104.2 million Swiss francs.

The group also canceled its flagship Baselworld 2021 event, which was due to take place Jan. 28 to Feb. 2 next year, after key watchmakers decided to ditch it. — Bloomberg

AUB to review accounts to assess client needs

Asia United Bank Corp. (AUB) will review individual accounts to assess client needs during the coronavirus pandemic and ensure the bank’s stability.

AUB Chairman and Chief Executive Officer Abraham T. Co acknowledged how the virus outbreak resulted in “economic damage for customers without the fault of their own.”

“We have an obligation to help them but at the same time, we also have an obligation to ensure the safety for the depositor and the financial stability of our bank,” Mr. Co said during the bank’s online annual stockholders meeting on Tuesday.

“So we have to review all the accounts one by one, to ensure that all the ways are addressed and our customers are properly helped,” he added.

AUB President Manuel A. Gomez said the bank is preparing for the economic impact of the pandemic, which will likely affect their asset quality.

“Preparing for it means riding out the current crisis by keeping a healthy balance sheet, staying liquid and prioritizing and proactively managing the deployment of both financial and non-financial resources to effectively manage the market and credit risks,” he said.

Mr. Gomez said the bank will continue to boost its technology to provide continued services amid the social distancing measures in place.

“In these contactless times, we cannot overemphasize the need to intensify IT (information technology) collaboration to overcome the limitation the pandemic has brought,” he said.

He added that AUB will continue to ramp up its presence in “areas demonstrating vibrant business activities” and will focus on keeping their low-cost current account, savings account standing.

The bank’s net earnings rose 7.36% to P1.183 billion in the first quarter from the P1.101 billion seen a year ago, according to the bank’s financial report for the period.

Its net interest income also jumped 27.26% to P2.762 billion from P2.17 billion in the comparable year-ago period.

Meanwhile, total operating expenses increased by 7.03% to P1.522 billion from P1.421 billion.

The bank’s shares ended trading at P47.40 apiece on Tuesday, up by 0.85% or 40 centavos from its previous close. — L.W.T. Noble

Alsons Consolidated to hold its virtual stockholders’ meeting on July 23

Star artist’s market implodes after collectors ‘paid too much’

HIS brooding self-portraits and glittering abstractions used to be the must-have trophies for billionaires, celebrities and investors — from Francois Pinault to Leonardo DiCaprio.

These days, Rudolf Stingel’s works are a hard sell. JN Contemporary Art, an entity affiliated with the Nahmad art dynasty, sued Phillips auction house for reneging on an agreement to include its painting by the Italian artist in a “major” auction, after guaranteeing it for $5 million.

It’s a stark reversal for one of the most commercially successful and sought-after living artists, whose new paintings have sold for about $3 million. At its peak in 2017, Stingel’s works totaled $44.2 million at auction, according to Artprice.com. One of them, consigned by Pinault, fetched a record $10.6 million. Speculative trading on the secondary market was rampant. But the activity slowed in the past two years, with more lots failing to find buyers. There isn’t a single Stingel at Sotheby’s big contemporary auctions this week — or at Christie’s next month.

“It’s dead,” Jeremy Larner, a New York art dealer, said of the Stingel market. “Everyone wants out of their Stingels right now, but they can’t. They paid too much.”

A key player in the Stingel market was Inigo Philbrick, an art dealer arrested in June on US charges that he defrauded victims out of more than $20 million to finance his business. From 2016 to 2019, Philbrick sold the same works to different investors, sometimes using them as collateral on loans while hiding others’ ownership interests, according to federal prosecutors in Manhattan. Stingel’s paintings, including his portrait of Pablo Picasso, are among the contested items.

CARPET, STYROFOAM
Stingel is known for probing processes and styles, which range from photo-realism to abstract. He has turned to carpet, aluminum, and Styrofoam as his surfaces, left shoe marks on canvases and painted animals and saints. His works gained critical and commercial acclaim after the Whitney Museum retrospective in 2007. In 2013, he staged a sprawling show at Pinault’s Palazzo Grassi in Venice. Investors took note — and prices took off.

“It became too quickly a megabucks market for trophy-hunting collectors,” said Benjamin Godsill, an art adviser. “The prices outstripped people’s ability to buy the work. And that sucked a lot of oxygen out of the market.”

Stingel’s Untitled (2009), at the center of the JN Contemporary Art complaint, depicts a snowy mountain range. Works from this series were exhibited at Gagosian gallery in 2014, selling for about $3 million each. Four years later, one of them doubled in price at Sotheby’s.

JN Contemporary Art consigned its landscape to Phillips last year to be offered in a “major spring 2020 evening auction,” according to the June 9 complaint in Manhattan federal court. The auction house agreed to give the consignor a $5-million guarantee for the 11-by-15-foot canvas, according to court documents.

But like the rest of the art world, Phillips was in pandemic lockdown and had to postpone its major auctions in New York. In early June, the company notified Joseph Nahmad, the manager of JN Contemporary Art, that it was terminating the contract because of “circumstances beyond our or your reasonable control,” according to the complaint.

‘FALSE PRETEXT’
Phillips “is making a commercial decision to illegally terminate a contract based on its belief that the current commercial market for works of art by Rudolf Stingel is not strong,” JN Contemporary Art said in court papers. “Defendant is disingenuously using COVID-19 as a false pretext for an unlawful termination.”

Nahmad and Phillips declined to comment, and a spokeswoman for Gagosian gallery, which represents Stingel, had no immediate comment.

The lull in the Stingel market may be temporary.

“I feel tremendously bullish about Rudolf Stingel for a long term if you can secure it for a decent price,” Godsill said.

As for those who bought at the peak, “they might have paid tomorrow’s price today,” he said, “but in 20 years it will look like a very perceptive trade.” — Bloomberg

Thrift lenders push for lower reserve ratio to boost lending to small businesses

The Chamber of Thrift Banks (CTB) is pushing for a lower reserve requirement ratio (RRR) to help encourage lending to embattled small businesses.

“We are still pushing for a reduction in thrift banks’ regulatory reserve requirement from four percent to three percent since a one percent decrease will mean additional billions of pesos in liquidity which thrift banks can provide borrowers with access to credit with longer term and at reasonable rates particularly during these times,” CTB President Cecilio D. San Pedro said during the group’s virtual General Membership Meeting on Tuesday.

The central bank slashed the RRR of universal and commercial banks by 200 bps to 12% in a bid to boost liquidity during the lockdown. However, the reserve requirement ratios of thrift and rural banks were maintained at four percent and three percent, respectively.

The Monetary Board has authorized Mr. Diokno to cut banks’ RRR by up to 400 bps this year.

The BSP also reduced the minimum liquidity ratio (MLR) of standalone thrift, rural and cooperative banks to 16% from 20% in April. Mr. San Pedro said the relief measure is a welcome development for their industry.

“With the reduced MLR… the resulting increase for thrift banks may be used to foster greater financial inclusion for its main target market — the MSMEs (micro, small, and medium-sized enterprises) and the consumer sector,” he said.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Monday that the option to cut RRR is still on the table, noting they are monitoring the liquidity in the financial system.

BSP data showed domestic liquidity or M3, the broadest measure of money supply in an economy, grew 16.2% year on year to P13.6 trillion in April, faster than the 13.3% pace in March.

However, outstanding loans disbursed by universal and commercial banks rose at a slower pace of 12.7% that month from the 13.6% seen in March.

Mr. San Pedro said the CTB has been working with the Japan International Cooperation Agency (JICA) in developing a credit risk database eyed to enhance lenders’ credit assessment capacity, foster a transparent scoring model and promote financial intermediation among MSMEs.

“The Monetary Board approved the role of BSP as a responsible agency for this credit database project,” he said. — LWTN

Cosco Capital core income up nearly 15%

COSCO Capital, Inc. posted a 14.8% increase in consolidated core net income last year to P9.32 billion, which the listed retail holding firm attributed to the continuous organic expansion of its business segments and higher consumer spending.

In a disclosure to the stock exchange on Tuesday, the Lucio L. Co-led company reported a 115.5% increase in its net income attributable to equity holders of the parent company to P11.6 billion.

Cosco reported a 13% jump in its core attributable net income to equity holders to P5.87 billion in 2019, while its consolidated net income shot 81.5% to P15.39 billion, which included its one-time gain from the sale of Liquigaz, versus P8.48 billion in 2018.

The company’s grocery retailing businesses, namely: Puregold Price Club, Inc. and S&R Membership Shopping Club, accounted for 30% of total profits, followed by its liquor distribution with 11% and commercial real estate with 10%.

“The group’s specialty retailing segment, Office Warehouse, Inc., accounted for 1% of net profit. Cosco parent only including the one-time gain on sale of Liquigaz contributed 48% of profits,” the disclosure said.

In 2019, the consolidated revenues of Cosco’s grocery retailing segment went up 9.5% to P154.5 billion while its consolidated net income increased 9.2% to P6.77 billion.

Excluding the company’s one-time gain from the sale of its Lawson equity investment in 2018, the core net income of Cosco’s grocery retail segment rose 16% during the period.

A total of 28 new Puregold stores and two new S&R Warehouse clubs were opened by the company in 2019.

Cosco’s liquor distribution business reported a 22.5% increase in its revenues to P10.72 billion due to a 43% increase in volume of cases it sold in 2019.

“The growth is primarily driven by the continued strong sales performance of Alfonso Light Brandy and Alfonso Brandy,” the company said in the disclosure.

Revenues for Cosco’s commercial real estate segment had a 5.7% growth to P2.15 billion while net income rose 12.8% to P1.23 billion.

The company’s special retailing business segment operated by Office Warehouse, Inc. reported a 17.3% increase to its revenues to P2.45 billion with a same-store sales growth of 12.2%. Office Warehouse currently has 89 stores in operation.

On Tuesday, shares in Cosco fell 2.5% or P0.13 to close at P5.06 per share. — Revin Mikhael D. Ochave

How PSEi member stocks performed — June 30, 2020

Here’s a quick glance at how PSEi stocks fared on Tuesday, June 30, 2020.

1...8,2598,2608,261...13,121Page 8,260 of 13,121
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube