Mining: AT’s tough 1H15 priced in; U/G to HOLD. 1Q15 net loss of
PHP637m continued from 4Q14 as metal prices declined and mill concerns
remained. Rising copper prices & completion of mill works in June will
moderate 2Q15F loss; expect 2H bottom line in the black. Decline in share
price has brought it close to our TP, upgrade to HOLD.
Consumer: EMP 1Q15 profits down 18%. Emperador Inc (EMP – BUY)
disclosed yesterday its 1Q15 earnings amounted to PHP1.4b, implying an
18% drop YoY. This is disappointing as 1Q accounted for only 20.2% of
our full-year forecast of PHP6.9b, slightly lower than consensus. In 2013-
2014, 1Q accounted for 24.7-27.9% of full-year earnings. Net sales grew
16% to PHP8.9b, behind management’s target of 35% growth for full-year
2015. We note EMP is coming from a high 1Q14 base as sales got a big
boost from trade loading ahead of a price increase then. In 1Q14, sales
grew 22%, EBIT went up 36% while net income grew 19%. But we also
note 1Q15 would include contributions from newly acquired Whyte and
Mackay. We will come out with a detailed note as soon as EMP releases
their financial statements.
Conglomerates: AGI reports PHP3.4b net profit in 1Q15. Alliance
Global Group Inc’s (AGI-Not Rated) reported PHP3.4b net profit to equity
holders in 1Q15 was down 12% YoY due to lower net income contributions
from Megaworld Corp (MEG-BUY), Emperador Inc. (EMP-BUY) and
Golden Arches Development Corp (GADC). MEG reported net profit of
PHP2.34b, 12% lower due to one-time gains of PHP600m booked in 1Q14.
Meanwhile, EMP’s net income of PHP1.4b was 14% down as the company
is coming off a high base in 1Q14 boosted by trade loading. GADC
reported a 5% decline in net profits to PHP161m as higher revenues were
offset by a faster increase in cost of inventory due to higher raw material
prices and shift in product mix. On the other hand, Travellers International
Hotel Group (RWM-BUY) reported 2% growth in net profits to PHP1.7b in
1Q15 due to lower operating costs and expenses.
Consumer: PGOLD-ALI JV to open up to 10 supermarkets in three
years. The Philippine Daily Inquirer quotes a top official from Puregold
Price Club Inc (PGOLD – BUY) as saying its 50-50 joint venture with Ayala
Land Inc (ALI – BUY) intends to open 10 mall-based supermarkets within
three years. The first one is expected to be launched in the next few
months while a second store will be opened also within the year. The JV,
which intends to put up supermarkets in ALI’s upcoming projects, has not
yet finalized its brand name although it has been loosely dubbed by the
media as Ayagold. Our forecasts do not yet include the JV’s impact to
earnings and valuation.
Utilities: TA's Renewable received green light from ERC. Trans-Asia Oil and Energy
Development Corp's (TA-BUY) wind-energy development unit, Trans-Asia Renewable Energy
Corp. (TAREC), got the Final Certificate of Approval to Connect (FCAC) for its 54MW wind
farm. This allows the project to connect to National Grid Corp of the Philippines (NGCP). The
wind farm is expected to produce 120.79 GWH of electricity per year to support the yearly
electricity demand of almost 48,000 households and contribute reduction of 65,000 tons of
carbon dioxide a year.
Utilities: AP seeking banking loans of up to PHP44b for two new projects. Aboitiz Power
(AP-HOLD) announced that Therma Visayas Inc. will borrow up to PHP34b for its 510MW base
load plant in Cebu while Hedcor Sabanagan Inc will borrow up to PHP10b for its 68MW Manolo
Fortich run-of-river hydropower plants in Bukidnon. The construction is now ongoing and the
plant in Cebu is expected to operate in 2018 while the hydro plant is targeted for end-2017. AP
has allocated PHP52b in capex this year to reach its goal of increasing total capacity by over
2,000MW in the next five years.
Telecoms: TEL's Smart unveils new plans for mobile-data use. Philippine Long Distance
Co (TEL-HOLD) subsidiary Smart Communications released four new postpaid offers namely:
the Roaming Plan for frequent travellers; the Consumable Plan with flexible elements and
highest volume allocation for LTE; the Tri-Net Plan for those who need unlimited calls and SMS
to Smart, Sun and Talk 'N Text subscribers; and the Multi-Plan that comes with multiple lines
under a single account.
Banks: BPI declares PHP0.90 semi-annual cash dividend. Bank of the Philippine Islands
(BPI – HOLD) declared PHP0.90/sh cash dividend in 1H15. Record and payment dates have
yet to be finalized. We expect another PHP0.90/sh cash dividend in 2H15, bringing total cash
dividends for the year to PHP1.80/sh. Based on yesterday’s closing price, this translates to
1.8% dividend yield.
Gaming: Tiger Resorts finds new partner for casino project., Universal Entertainment
Corp, owned by Kazuo Okada, has sold its 40% stake in Eagle II Holdco Inc to All Seasons
Hotels & Resorts Corp, 100% owned by Antonio Cojuangco. All Seasons is the new partner of
Tiger Resorts Leisure and Entertainment Inc for its USD2b casino project and is the owner of
the land in which the casino will be built. The sale could be the legal remedy to finally
completing the project.
- Maybank ATR
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