Market Talk (April 2, 2014)

Conglomerates: GTCAP net earnings up 31% to PHP8.6b in FY13. 

GT Capital Holdings Inc (GTCAP – HOLD) posted FY13 consolidated net earnings of PHP8.6b, up 31% YoY. This compares with our PHP8.2b estimate and PHP8.9b consensus forecast. Consolidated revenues leaped 4.6x to PHP105.5b which the company attributed to the consolidation of Toyota Motor Philippines (TMP), Charter Ping An Insurance Corp (CPAIC), and Global Business Power Corp (GBP). Metrobank (MBT – HOLD) posted net income of PHP22.5b, 46% higher YoY. TMP’s net earnings expanded 50% to PHP4.2b, in line with our estimates, while Toyota Manila Bay Corp’s net income jumped 9% to PHP110m. Federal Land’s core net income surged 58% YoY to PHP1b as total revenues soared 85% to PHP7.9b. AXA Philippines grew net earnings 30% to PHP1.2b as premium revenues climbed 49% to PHP18.3b. CPAIC registered net earnings of PHP190m, a 12% decline due to the natural calamities claims late last year. As expected, GBP’s earnings fell 14% to PHP1.9b on continued soft WESM spot prices due to lower peak power consumption as well as damage from calamities last year. We shall review our estimates and issue a detailed report. 

Banks: RCB declares PHP1/sh cash dividend, plans to issue Tier 2 notes.

Rizal Commercial Banking Corp (RCB – BUY) declared PHP1.3b in cash dividends, or PHP1/sh for common and preferred shareholders. This is equivalent to 20.5% payout ratio and translates to 2.1% yield at current price. Other details are waiting for approval of the central bank. RCB also disclosed it plans to issue Basel III compliant Tier 2 notes with a minimum tenor of ten years with a call option on the fifth year. The issuance will be used to strengthen RCB’s capital and to support its expansion plans. Meanwhile, RCB also plans to infuse additional PHP3.5m in Luisita Industrial Park Corp to maintain its 35% stake. 

Telecom: TEL to take majority interest in Philippine Star. 

As reported by BusinessWorld, Philippine Long Distance Telephone Co (TEL – BUY) Chairman Manual V. Pangilinan said that TEL bought an additional 40% stake in the publisher, The Philippine STAR, bringing TEL’s total stake to nearly 60%. PhilSTAR Daily Inc President and Chief Executive Officer Miguel G. Belmonte clarified that the deal is still being finalized as of yesterday but the shareholder agreement was signed last Friday, 28 March. The Belmonte family will retain 20% interest while the balance will still be owned by various minority shareholders. He also said that the purchase price is “just below” PHP5b and includes the group of publications – The Philippine STAR; Pilipino STAR Ngayon, Cebu-based Freeman, Cebuano tabloid Banat, and People Asia magazine.

-ATR Kim Eng