Investing Stocks in Philippines: John Gokongwei

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Tuesday, February 26, 2013

Stock News 2013: MVP, Gokongwei ink deal to bid for P17.5-B Mactan airport project

Photo of Manny (Photo credit: Wikipedia)

After their game-changing partnership in the telecommunications business, businessman Manuel V. Pangilinan and tycoon John Gokongwei have formed a new alliance to jointly bid for the P17.5-billion Mactan Cebu International Airport passenger terminal redevelopment project.

Pangilinan-led infrastructure holding firm Metro Pacific Investments Corp. and the Gokongwei-led JG Summit Holdings disclosed to the Philippine Stock Exchange on Monday the signing of an agreement to create a joint venture firm called MPIC-JGS Airport Consortium, Inc. This firm will be majority-owned by MPIC while JG Summit will own 33 percent. An airport operator partner will be given a 10 percent stake.

The consortium formed by two of the country’s largest conglomerates will bid for the rehabilitation and expansion of the Mactan-Cebu International Airport and will also explore other airport projects that may be rolled out by the government in the future.

MPIC and JG Summit, with a combined market capitalization of P398 billion, are pooling resources in what is expected to be stiff bidding to redevelop the Mactan-Cebu airport, the country’s second largest international gateway, under a public-private partnership (PPP) framework. The Ayala and Aboitiz conglomerates earlier teamed up for the project while another strong contender is San Miguel Corp., the lead operator of the Caticlan airport which is a gateway to Boracay Island.

“We are pleased to be partnering with JG Summit, one of the country’s diversified conglomerates pioneering in products and services that have become household names. The strong ties of the Gokongwei family in Cebu, through its ancestral roots and economic contribution in various real estate developments and retail businesses account for a deep sense of commitment to further improve Cebu’s business links to the rest of the world,” said MPIC chair Pangilinan.

MPIC’s experience as the leading infrastructure investment company transforming regulated businesses in water utilities, electricity distribution, toll roads and other public infrastructure projects combined with the expertise of JG Summit in the fields of commercial real estate, hotel and property development, and air transportation is seen creating a strong alliance in the government’s airport rehabilitation project.

Pangilinan added: “Integrating both our management expertise, corporate governance adherence and solid track record in developing large-scale infrastructure projects will strengthen the capabilities of the airport in responding to the needs of both passenger and airline customers. Achieving world-class status and modernization for our fast growing air transport sector will be better served as we join hands in the reforms that will contribute to the growth of the country’s economy.”

http://business.inquirer.net/109331/mvp-gokongwei-ink-deal-to-bid-for-p17-5-b-mactan-airport-project

Saturday, February 23, 2013

Stock News 2013: Gokongwei plans more power, ethanol projects in Negros

Official seal of City of Bacolod (Photo credit: Wikipedia)

Tycoon John Gokongwei Jr. has announced plans to put up power and ethanol plants on Negros Island.

Gokongwei said on Thursday that the Gokongwei group would put up an ethanol plant at the Universal Robina Sugar Milling Corp. (Ursumco) compound in Manjuyod, Negros Oriental.

He said the ethanol plant would be operational by the end of the year.

The Ursumco ethanol plant will use molasses, a byproduct from the processing of sugar cane into sugar, to produce ethanol.

Meanwhile, other byproducts from the sugar mills would be used to fuel power plants.

One proposed power plant would be located at the Southern Negros Development Corp. (Sonedco) property in Kabankalan City in Negros Occidental, Gokongwei said.

The power plant will generate electricity using bagasse, a renewable biomass residue from the sugar mill, as feedstock, according to the investor presentation of United Robina Corp. (URC).

The power plant would supply Sonedco’s electricity requirement while the surplus power would be fed to the power grid in the area.

The URC company officials disclosed that the power plant would have a capacity of 40 megawatts and would cost around $60 million.

If the ventures into ethanol and power production would turn out to be economically viable and competitive, Gokongwei said the group would consider putting up more ethanol and power plants.

Gokongwei, chairman of JG Summit Holdings, was in Bacolod to receive a plaque declaring him an adopted son of Bacolod as well as a copy of an executive order that named him the honorary mayor.

http://business.inquirer.net/108043/rcbc-posts-24-profit-growth

Monday, October 29, 2012

Stock News 2012: JG Summit eyes more overseas acquisitions

The Paragon, a high-end shopping mall, along Orchard Road, Singapore. (3mp version) (Photo credit: Wikipedia)

Taipan John Gokongwei’s investment vehicle JG Summit Holdings Inc. is seeking to expand its presence overseas with plans to acquire food and beverage firms within ASEAN as well as real estate properties across the globe.

BJ Sebastian, senior vice-president at JG Summit, said the conglomerate is on the lookout for real estate assets elsewhere in the world which it can develop as part of efforts to shore up its land bank to ensure a steady stream of projects.

The Gokongwei Group, through its 36.1 percent controlling interest in United Industrial Corp. Ltd., has a presence in the improving real estate sector in Singapore and China, particularly in Chengdu, Tianjin, Shanghai and Beijing.

UIC has a portfolio of 2.2 million square feet of office space and one million square feet of retail space in Singapore.

Among UIC’s best known commercial landmarks include the UIC Building, Singapore Land Tower, SGX Centre, The Gateway, Stamford Court, Marina Square (a massive shopping and hotel complex in the Marina Bay) and West Mall (a suburban shopping complex).

UIC also has major residential projects such as The Belleforte, The Paterson, and Stevens Loft in Orchard Road, as well as One Amber and Grand Duchess at St. Patrick’s in the popular East Coast area.

Sebastian said demand in the Singapore retail and hospitality sectors is seen to be resilient due to the influx of international retailers and buoyant visitor arrivals. He also sees the office rental market to continue to be competitive amid a tough global business environment.

On the homefront, the group’s property arm Robinsons Land Corp. will continue its expansion program, targeting to open four new malls, two office buildings and at least three new Gohotels for its fiscal year ending September 2013.

Sebastian said RLC has increased its landbank by 111 hectares year-on-year to 534 hectares as of end-June this year, good for four to five years of development. “The higher landbank will give each business unit a medium-term project pipeline visibility,” he said.

The group’s food and beverage unit Univesal Robina Corp. is scouring Asia for possible acquisition targets. “We’re looking at firms with strong brands and a wide distribution network, Sebastian said.

He noted that URC’s international revenues increased five-fold in nine years from $84 million in 2003 to $443 million in 2011. In the nine months of its fiscal year ending September this year, revenues rose six percent as most countries posted growth except for Thailand.

From 29 percent contribution to total branded consumer foods group sales in 2003, URC overseas operations’ share increased to 39 percent last year.

URC’s products are available in China, Vietnam, Indonesia, Malaysia and Thailand. Plans are now underway to set up shop in Burma as it expects international operations to grow as big as its domestic business in five years.

URC is also the dominant market leader in candies, chocolates, biscuits, cup noodles and tea beverage. It grew the local non-carbonated beverage market with the successful launch of C2 Cool & Clean Green Tea, building on the global trend towards health and wellness.

URC later forayed into other areas of the non-carbonated beverage market, such as juices, energy drinks and ready-to-drink coffee, among others.

Meanwhile, the group is on track to complete the construction of its $800 million naptha cracker plant - the first in the country – by late 2013. Located in Batangas, the plant will produce 320,000 metric tons of ethylene annually when it starts commercial operations by early 2014.

The naptha facility is estimated to generate annual sales of around $1 billion on full production and at current prices.

http://www.philstar.com/Article.aspx?articleId=864442&publicationSubCategoryId=66

Thursday, July 19, 2012

Stock News 2012: Cebu Pacific, Zest Air seek Papua New Guinea route

English: Zest Air logo (Photo credit: Wikipedia)
Budget airlines Cebu Air Inc. of taipan John Gokongwei and Zest Airways Inc. of Amb. Alfredo Yao are seeking the go-signal from the Civil Aeronautics Board (CAB) to fly to Papua New Guinea.

The CAB is set to hear the consolidated application of Cebu Air, which operates under the Cebu Pacific brand, and Zest Air for designation as official Philippine carrier and allocation of entitlements to Papua New Guinea on July 24.

The low cost carriers are seeking 540 seat entitlements each.

The CAB is mandated by Republic Act 776, as amended by Presidential Decree 1462, to regulate, promote, and develop the economic aspect of air transportation in the Philippines and ensure that existing policies are adapted to the present and future air commerce of the Philippines.

The law also vests supervision, jurisdiction, and control over all carriers engaged in air commerce in the Philippines as well as their property, equipment, franchise and facilities.

“Pursuant to the provisions under RA 776, as amended, notice is hereby given that Cebu Pacific and Zest Air have filed with the CAB their respective petitions for designation as official Philippine carrier and allocation of entitlements to Papua New Guinea under Route 1 in accordance to the existing Confidential Memorandum of Understanding,” CAB hearing officer Maria Cecilia Cawilan stated in a notice of hearing.

The Philippines and Papua New Guinea agreed to increase flight entitlements between the two countries in August last year. The amended air services agreement increased entitlements to 600 seats per week from the previous 150 seat per week.

Likewise, a new route was also agreed for all airports outside Manila at 1,500 seats per week to help meet the growing tourism between the Philippines and Papua New Guinea.

Cebu Pacific currently operates 10 Airbus A319, 20 Airbus A320 and eight ATR-72 500 aircraft. Its fleet of 38 aircraft – with an average age of 3.6 years – is one of the youngest aircraft fleets in Asia.

On the other hand, ZestAir was established in September 2008 after the former Asian Spirit was taken over by the Yao Group through AMY Holdings Corp.

http://www.philstar.com/Article.aspx?articleId=827893&publicationSubCategoryId=66

Friday, June 15, 2012

Stock News 2012: URC raises P7.44B from treasury shares

Universal Robina (Photo credit: Wikipedia)
Universal Robina Corp. (URC), the food and drink manufacturing arm of the John Gokongwei family, has raised P7.44 billion from the sale of treasury shares to institutional investors.

In a disclosure to the Philippine Stock Exchange, URC said it sold 120 million common shares previously held as treasury shares at P62 each or a 4.8 percent discount to the previous closing price and a 2.3 percent discount to the 30-day volume weighted average price.

The shares were crossed through a special block sale at the PSE yesterday.

CLSA Ltd. acted as sole bookrunner and sole placing agent for the sale.

URC said proceeds from the share sale will be used to fund potential acquisitions and for general corporate purposes.

The company has been expanding its footprint overseas and will soon open a new factory in Burma. Its international operations currently account for about a third of its business and is seen to grow as big as its domestic operations in around five years.

For this year, URC has set a capital spending of P5.2 billion, 14 percent higher than the P4.56 billion spent a year before. Majority of the capital budget, or 80 percent, will be used for the continued expansion of its branded consumer foods segment operations — primarily snack foods production facilities in the Philippines and biscuit factories in its two biggest markets, Thailand and Vietnam.

The remaining 20 percent of the capex will go to the construction of a $27-million bioethanol plant at URC’s sugar milling complex in Negros Occidental.

Bioethanol is a form of renewable energy intended to provide a more environmentally and economically friendly alternative fossil fuels such as diesel and gasoline. It can be made from very common crops such as sugarcane, potato and corn.

The bioethanol plant, which will churn out 100,00 liters of fuel a day, is projected to contribute a little over one percent to company’s revenues.

URC grew its net earnings in the first half of its fiscal year ending September 2012 by 36.5 percent to P4.48 billion due to significant improvement in market values of bond and equity holdings and lower foreign exchange loss from foreign currency-denominated transactions.

Sales rose 6.6 percent to P35.49 billion while core sales went up 13 percent.

URC is involved in a range of food-related businesses, including the manufacture and distribution of branded consumer foods, production of hogs and day-old chicks, manufacture of animal and fish feeds, glucose and veterinary compounds, flour milling, and sugar milling and refining.

http://www.philstar.com/Article.aspx?articleId=817222&publicationSubCategoryId=66

Wednesday, May 16, 2012

Stock News 2012: JG Summit profit soars 77% to P4.91 billion

Universal Robina (Photo credit: Wikipedia)
JG Summit Holdings Inc., the investment vehicle of taipan John Gokongwei, said its net earnings grew 76.7 percent in the first quarter to P4.91 billion, boosted by a dividend income from its investment in Philippine Long Distance Telephone Co. (PLDT) as well as higher mark-to-market gains.

Consolidated revenues went up 13.9 percent to P33.48 billion, mainly driven by the strong performance across all business units, the company said in a statement.

The food business contributed P18.2 billion to total revenues, up from P16.74 billion. The airline business, through Cebu Pacific, chipped in P9.34 billion while property pumped in P3.35 billion. Petrochemicals contributed P1.38 billion while banking pitched in P709.96 million.

Dividend income from its PLDT investment amounted to P1.9 billion.

Core earnings before tax increased 49.9 percent to P5.89 billion while the group’s EBITDA (earnings before interest, taxes, depreciation and amortization) was flat at P6.48 billion.

Equity in net earnings of associates amounted to P499.76 million, down 5.6 percent from the previous level due to reduced income from the group’s investment in UIC Ltd.

Consolidated cost of sales and services climbed 17 percent P23.77 billion due to higher aviation fuel expenses incurred by its airline business.

However, the company booked P680.28 million in gains from its investment in the capital market, 51.9 percent higher than the previous level.

Food manufacturing arm Universal Robina Corp. reported a 36.5 percent growth in net income for the first half of its fiscal year ending September to P4.48 billion. Net sales improved 6.6 percent to P35.487 billion.

URC’s branded consumer foods (BCF) segment, including the packaging division, registered sales of P28.029 billion, up 13.1 percent. Of the total, the domestic foods business grew faster at 13.7 percent to P16.59 billion, largely driven by the be-verage division which jumped 41.5 percent on account of strong sales acceptance for its new product, Great Taste White Coffee.

For the snack foods division, snacks and biscuits exhibited double-digit growth.

http://www.philstar.com/Article.aspx?articleId=807650&publicationSubCategoryId=66

Wednesday, February 15, 2012

Stock News 2012: Gokongwei property, food firms post strong income growth

Universal Robina (Photo credit: Wikipedia)
The property and food manufacturing units of tycoon John Gokongwei showed strong growth in the first quarter of their fiscal year ending September 2012 with their net earnings growing 13 percent and 79 percent, respectively.

Based on separate financial reports submitted to securities regulators, Robinsons Land Corp. and Universal Robina Corp. chalked in net income of P1.15 billion and P2.22 billion, respectively, from October to December 2011.

RLC’s revenues rose 12.6 percent to P3.58 billion, P1.8 billion of which came from the shopping mall business which represented a 14_percent spike from the previous level.

The residential division contributed P1.1 billion while the office building segment, accounting for a tenth of revenues, chipped in P347.7 million.

The hotels division comprising Crowne Plaza, Galleria Manila, Holiday Inn Galleria, Summit Circle Cebu, Summit Ridge Hotel and gohotel.ph, pumped in P341 million.

Meanwhile, URC registered consolidated sales of P18.2 billion, 8.7 percent higher than the P16.74 billion recorded a year before. Taking out the packaging division. Branded consumer Foods Group (BCFG) sales grew 14.6 percent to P13.96 billion.

BCFG domestic sales expanded 12.9 percent to P8.38 billion, mainly due to the strong performance of its beverage division which grew by 28 percent on account of growth in sales volume and increase in prices.

http://www.philstar.com/Article.aspx?articleId=777586&publicationSubCategoryId=66

Tuesday, February 14, 2012

Stock News 2012: Universal Robina goes into ethanol

Universal Robina (Photo credit: Wikipedia)
Universal Robina Corp. (URC), the food manufacturing unit of tycoon John Gokongwei’s JG Summit Holdings Inc., is diversifying into fuel ethanol development.

In a disclosure to the stock exchange yesterday, URC said its board approved to “amend the secondary purpose in its articles of incorporation in order to include the production of fuel ethanol and engage in such activity.”

Bioethanol is a form of renewable energy intended to provide a more environmentally and economically friendly alternative fossil fuels such as diesel and gasoline. It can be made from very common crops such as sugar cane, potato and corn.

URC is reportedly looking at putting up a bioethanol plant, using sugar molasses as feedstock from its sugar mills in Negros Occidental.

URC engages in sugar milling and refining through Universal Robina Sugar Milling Corp. (the flagship sugar refinery of the JG Summit Group), Cagayan Robina Sugar Milling Co. and Southern Negros Development Corp.

The government is promoting the use of ethanol as an alternative source of energy to reduce the country’s dependence on imported fuel.

Aside from sugar milling, URC also produces a diverse mix of snack food, chocolate, candy, biscuit, bakery, beverage, noodles and tomato based products.

http://www.philstar.com/Article.aspx?articleId=777200&publicationSubCategoryId=66

Monday, February 11, 2008

Stock News 2008: Property firm to launch new condominium project in Bonifacio Global City

Image via WikipediaLISTED PROPERTY developer Robinsons Land Corp. is set to launch its fifth high-rise condominium project in the upscale Bonifacio Global City in Taguig within the next three months.
Mybelle V. Aragon-Gobio, Robinsons Land vice-president for business development, said the company is scheduled to unveil a twin-tower residential project by the second quarter of this year.
Frederick D. Go, Robinsons Land president and chief operating officer, told BusinessWorld in an interview Thursday night that the company envisions a "luxury" project, with units costing a minimum of P5 million each.
"It will be called St. Regis, a name synonymous to luxury and timeless elegance," Mr. Go said.
Last property with a view
He said St. Regis will be located at the vacant 9,118-square-meter lot located along the Millionaire’s row at the corner of McKinley Drive and Fifth Avenue, in Bonifacio Global City.
"It [the property] is seen as the last remaining premier lots that has superior vantage point in the whole Global City complex with a spectacular viewpoint of Manila Golf and Manila Polo Club," Mr. Go said.
Planned as the "lifestyle gateway" to Global City, Robinsons Land said the lot is composed of two mega-block lots — the first measuring 5,747 square meters, and the second block measuring 3,371 square meters.
Mr. Go however declined to say how much has the company allotted for the construction of St. Regis.
Robinsons Land, the real estate development arm of the family of taipan John Gokongwei, currently has three sold-out projects in Bonifacio Global City.
These are the 38-storey Fifth Avenue Place, the 43-storey Mckinley Park Residences and the 43-storey Fort Residences.
Since the projects are already sold-out, Ms. Aragon-Gobio said Robinsons Land has decided to begin preselling its forth project in Fort Bonifacio, the 49-storey The Trion Towers.
Tri-axial
Located in a 9,819-square-meter lot at 8th Avenue and McKinley Parkway, The Trion Towers is the first three-tower residential complex in Fort Bonifacio.
"This new icon of the city skyline boasts of an ingenious tri-axial design which allows all of the units to enjoy privacy, good quality daylight, natural ventilation and multiple views of the city," Ms. Aragon-Gobio said in an interview.
"The groundbreaking design, the buildings’ height, and the triangular formation of the towers all contribute to uniqueness and grandness that The Trion Towers embody, setting it apart from other residential developments," she added.
Ms. Aragon-Gobio said The Trion Towers features 2,146 condominium units with a selection of one-, two-, or three-bedroom units ranging from 37 square meters up to 118 square meters. The minimum unit cost is P3 million.
She said construction of the project is scheduled to be completed by 2011.
"One major design aspect is the introduction of buildings in a triangle formation, where each tower is linked by a bridgeway via a podium-like activity theme park — all buildings will be designed to fittingly embrace the ’central park’, fully maximizing the residential wellness, green-livability and value of the property," she said.
Robinsons Land is the real estate arm of JG Summit Holdings, Inc., one of the country’s largest conglomerates with interests in branded consumers foods, agro-industrial and commodity food products, textile, telecommunications, petrochemicals, air transportation and financial services.
Shares of Robinsons Land were unchanged at P14 each after last Friday’s trading.
Jeffrey O. Valisno
February 11, 2008
http://www.robinsonsoffices.com/jan-mar2008.html

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