Conglomerates: FPH posts reported net income of PHP2.4b.
First Philippine Holdings Corp (FPH – BUY) announced its full-year 2013 reported net income amounted to PHP2.4b, significantly lower than 2012’s PHP9.55b due to the exclusion of some PHP8.2b one-off gains in 2012 related to the sale of FPH’s share in Manila Electric Co (MER – HOLD) and Rockwell Land Corp (ROCK – Not rated). On a quarterly basis, we estimate FPH booked a reported loss of around PHP1b in 4Q13. To compare, Energy Development Corp (EDC – BUY), a 49%-owned subsidiary of First Gen Corp (FGEN – BUY) which in turn is 66.2% owned by FPH, similarly booked a reported loss in 4Q13 of around PHP610m. Excluding one-offs (consisiting mainly of forex losses and typhoon-related damages), EDC posted a recurring net income of PHP740m. Note that FPH only released a one-paragraph statement so we are still unable to estimate the company’s 4Q13 recurring profit.
Conglomerates: LPZ reported net income reaches PHP1.95b.
Lopez Holdings Corp (LPZ – BUY) disclosed in a one-paragraph statement that its reported net income amounted to PHP1.95b in 2013, down 54% from PHP4.29b in 2012. Implied 4Q13 reported loss reached PHP284m. LPZ’s subsidiary First Philippine Holdings Corp (FPH – BUY) also booked a loss of PHP1b in 4Q13 while its unit ABS-CBN Corp (ABSP - BUY) posted lower reported profits of PHP109m, down 29%. We will issue a more detailed report pending the release of its financials.
Conglomeratates/Utilities: AC to start construction of Mindanao plant in 2H14.
As reported by Business World, Ayala Corp’s (AC – BUY) wholly-owned subsidiary AC Energy Holdings Inc (AC Energy) is targeting the start of construction of a 405 MW coal-fired plant in Northern Mindanao by 2H14. The project is in partnership with Power Partners Ltd Co and consists of 3x135 MW units in Lanao del Norte. However, details such as the construction period and final cost of
investment are still being finalized.
Property: MEG allocates PHP5B to build 10 office towers in Iloilo.
Megaworld, (MEG -HOLD) the country’s top office developer and landlord, will build 10 office towers in the 72-hectare Iloilo Business Park by 2021. The office towers will provide a total of about 100,000sqm of office space inventory for the biggest cyberpark in Western Visayas, generating approximately 30,000 jobs in the information technology-business process outsourcing (ITBPO) sector. MEG is allocating PHP5b for the office towers in Iloilo Business Park. As part of the first phase of the IT-BPO cluster of the township, three office towers are set to be operational within this year – One Global Center, Two Global Center, and Richmonde Tower. These three towers are already included in our forecast this year and estimated to contribute 1% from start-up in August. Our total rental income forecast for MEG this year is PHP5.4b.
Economy: Airport PPP awarded to GMR-Megawide consortium.
The Mactan Cebu International airport public-private partnership (PPP) project worth PHP17.52b was awarded last Friday to the consortium of Bangalore-based GMR Infrastructure Inc (GMR) and
construction company Megawide Construction (MWIDE – Not rated). GMR-Megawide offered the highest premium of PHP14.4b among seven bidders in the auction last November. The project involves rehabilitation of the existing passenger terminal and theconstruction of a new one to increase the capacity to 25m passengers. The existing terminal was designed for 4.5m passengers but now serves around 7m a year. GMR expects to take over management of the Cebu airport terminal six months after the 25-year concession agreement is signed.
Economy: March headline inflation confirms downtrend.
Consumer inflation slowed to 3.9% YoY in Mar, lower than Feb’s 4.1% in Jan as the high-base effect from increased sin taxes on alcohol and tobacco last year wore off and housing and utilities inflation slowed. However, there was still pressure on food and non-alcoholic beverages as prices climbed 5.8%, faster than Feb’s 5.5%. 1Q14 headline inflation averaged 4.1%, higher than 4Q13 of
3.5%. We expect the downtrend to continue, barring extraordinary events, and maintain our 3.7% forecast for the year. The central bank expects 4.2% but we believe they may downgrade their forecast as they have done already twice this year
- ATR Kim Eng
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