Stock News 2010: EEI income up 6% in 1st half

Image by Getty Images via @daylifeMANILA, Philippines - Construction giant EEI Corp. said its net income went up six percent in the first half this year largely due to cost-containment measures and the significant decrease in interest expense.
In a financial report submitted to securities regulators, EEI said its net earnings rose to P308.56 million even as consolidated revenues fell six percent to P3.12 billion. Revenues from services also dropped 53 percent from P1.19 billion to P560 million.
Equity in earnings of associate and joint venture likewise plunged 61 percent to P120.62 million, contributing to the decline in revenues.
However, the lower contribution was tempered by the increase in revenue from construction contracts, rising 19 percent to P2.35 billion. Merchandise sales improved 13 percent to P143.06 million while real estate sales more than doubled to P71.9 million.
Interest income amounted to P30.7 million, down 16 percent from P36.42 million, owing to lower interest rate on dollar money market placements.
The company was able to contain its expenses, declining 12 percent to P2.94 billion. However, costs related to construction contracts increased nine percent to P1.89 billion.
During the period under review, EEI won a manpower supply contract for the Singapore Parallel Train Olefins Recovery Project for Shaw Stone & Webster Asia Inc., additional contract for NAIA Expressway and its related road project, package 4C Phase I for Department of Public Works and Highways (DPWH), the construction of the RCBC Savings Bank and Corporate Center in Fort Bonifacio, the construction of the Sun Residences of SM Development Corp. in Quezon City, the construction of the Phoenix semiconductor plant in Clark, Pampanga, and the atmospheric storage facilities for Petron Corp.
In addition, under a joint venture with Korea’s Hanjin Heavy Industries & Construction Co. Ltd., EEI is currently undertaking the P2.84-billion construction of Berth 6 of the Manila International Container Terminal for global port operator International Container Terminal Services Inc. EEI has a 30 percent stake in the joint venture.
Among the company’s overseas projects are the Inco Goro nickel mining project in New Caledonia, involving the commissioning and additional works for the nickel mining plant, and the $12-million pipe erection works of the inlet facilities covering electro-mechanical works for utilities, offsite and off-plot areas for the Qatargas 3 and 4 Onshore project for GAMA Qatar Co. WLL under the Chiyoda-Technip joint venture. These are expected to be completed towards the end of the current year.
Meanwhile, orders backlog from projects represents the value of workable production from ongoing contracts. As of end-June this year, EEI’s total domestic backlog had a net selling price of P6.42 billion, including the backlog of subsidiaries worth P412.42 million.
The backlog provided by the company’s overseas joint venture company, Al Rushaid Construction Co. (ARCC), as of the end of the first semester stood at P12.54 billion.
EEI had total consolidated assets of P8.95 billion as of June 30, 2010, registering a nine-percent growth from the end-2009 level of P8.18 billion.
The company remains optimistic about its prospects for the rest of the year as it continues to pursue new prospects for both local and foreign-based projects.
Zinnia B. Dela Peña
August 19, 2010 12:00AM
http://www.philstar.com/Article.aspx?articleId=603943&publicationSubCategoryId=66

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