Stock News 2013: Property, gaming boost AGI profits in Q1

Casino logo (Photo credit: Wikipedia)

Alliance Global Group Inc. grew its first-quarter net profit by 18 percent year on year to P4.91 billion on higher earnings chalked up by its property development, gaming and beverage businesses.

Core net income attributable to AGI shareholders likewise increased by 21 percent to P3.58 billion from the level a year ago, the company disclosed to the Philippine Stock Exchange on Wednesday.

Property development arm Megaworld Corp. posted a 15-percent rise in first-quarter net profit to P1.8 billion.  Megaworld contributed around 34 percent to AGI’s net income and about 26 percent to total revenue.

Leisure estate and gaming unit Travellers International Hotel Group—a partnership with the Genting group of Malaysia, which has made plans to go public—grew its first-quarter net profit by 16 percent year on year to P995 million. Travellers operates Resorts World Manila, the first integrated tourism estate in the country.

Emperador Distillers Inc. posted a 40-percent jump in first-quarter net profit to P1.4 billion.

Megaworld, Travellers and Emperador collectively contributed 84 percent of the conglomerate’s net profit.

“We believe the current macroeconomic conditions will contribute positively to our various businesses, from consumer and property to BPO and tourism—all growth drivers of the Philippine economy. These businesses will hit double-digit growth in revenues and net profits,” AGI chairman Tan said in a press statement.

Consolidated revenues went up by 25 percent to P30.39 billion in the first three months from the level a year ago.

Real estate arm Megaworld contributed around 34 percent to AGI’s net income and about 26 percent to its total revenue.

Megaworld’s three-month revenues stood at P8.1 billion, up 16 percent year on year. As an indicator of future growth, Megaworld and its subsidiaries also posted over P18 billion in reservation sales for the first quarter, higher than the P14 billion level in the same period last year, as the group reported brisk sales from the residential projects in its townships, particularly Newport City, McKinley West, McKinley Hill and Eastwood City.

Megaworld also cited strong leasing income from its BPO and retail portfolio.

http://business.inquirer.net/122247/metro-pacific-joins-msci-philippines-index-replaces-smc

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Stock News 2012: Malaysian gaming firm threatens to sue PCSO

Philippine Gaming Management Corp. (PGMC), the local gaming unit of Malaysian conglomerate Berjaya, has accused the state-run Philippine Charity Sweepstakes Office (PCSO) of working relentlessly to bring down the Malaysian-led company.

PGMC legal counsel Jose Bernas accused the PCSO management of favoring a rival local lottery equipment provider at PGMC’s expense.

Bernas cited in particular the PCSO move to allow rival Pacific Online Systems Corp. to enter what it deems to be PGMC’s “exclusive” Luzon territory without any bidding being conducted.

He said the PCSO has been “relentless in its efforts to bring PGMC down, demanding [that we] reduce the rental rates on the lotto equipment we provided PCSO by as much as 50 percent, but giving Pacific Online, our competitor, better deals at our expense.”

All-out legal battle

In such a situation, PGMC said the Bejaya unit was ready to go on an “all-out” legal battle against the government agency.

Bernas accused the PCSO, led by chair Margarita Juico, of putting “in jeopardy” the Malaysian group’s investments through various “illegal measures.”

“We have all the documents to prove our allegations and we are now prepared to go all-out to expose what PCSO has been doing against a foreign investor and its local shareholders. We are doing this after exhausting all means to resolve these issues with the present PCSO,” he said.

PCSO general manager Ferdinand Rojas II explained that the reduction of the rental rates was based on a directive from the Senate blue ribbon committee.

On the “exclusivity” debate, he said the PCSO had its own position on the matter but would leave it to the courts to decide the case.  As the case is now pending in court, he said a discussion on its merits would be sub judice.

Last October, PGMC  filed a court petition to cite the PCSO in contempt for disregarding a writ of preliminary injunction issued in relation to a dispute on lottery operations in Luzon.

An injunction is an extraordinary remedy reserved for special circumstances in which the temporary preservation of the status quo is necessary.

Favored firm

PGMC is wholly owned by listed holding company Berjaya Phils., a unit of Malaysia’s Berjaya Group.

Pacific Online, the company that Bernas accused the PCSO of favoring, is led by businessman Willy Ocier and is the lottery equipment provider for the Visayas-Mindanao territory.

PGMC said that in 1993, it won the bidding for the entire Philippines to provide PCSO with lottery equipment. However, it said the government decided to award the Visayas-Mindanao territory to the losing bidder, now known as Pacific Online. PGMC was given only Luzon as its exclusive territory.

It noted that PGMC’s current contract with PCSO will end in August 2015 while Pacific Online’s contract will expire in March 2013.

Since Pacific Online has been allowed to install at least 600 terminals in Luzon since June, Bernas said the PCSO has effectively awarded Luzon, PGMC’s exclusive area, to Pacific Online and extended the latter’s contract without any bidding.

http://business.inquirer.net/98813/malaysian-gaming-firm-threatens-to-sue-pcso

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Stock News 2012: Petron net profit slumps

Petron Corporation (Photo credit: Wikipedia)

Petron Corp., the country’s biggest oil refiner and retailer, registered an 88-percent drop in its consolidated net income to P932 million in the first nine months of 2012 from the P7.6 billion it posted in the same period last year.

The oil company explained that it continued to experience depressed margins because of the volatility in global oil markets in the second and third quarters of 2012. The Malaysian operation contributed only P155 million in consolidated net income for the January-to-September period, Petron said in a disclosure to the Philippine Stock Exchange on Monday.

In the third quarter alone, Petron posted a modest net income of P500 million, a turnaround from the P2.1-billion net loss it incurred for its consolidated operations in the second quarter this year.

In terms of revenue, however, Petron managed to post a 52-percent jump to P307.3 billion. Local fuel sales and exports grew by 4 percent to 35.6 million barrels, contributing P212.4 billion to the total revenue. The consolidation of Petron Malaysia beginning the second quarter likewise added 17.6 million barrels in volumes and revenues valued at P94.9 billion.

The increases in the volume of fuel products sold was attributed to Petron’s massive retail expansion program, which marked a milestone during the third quarter this year when the company’s service station network breached the 2,000 mark.

Overall, Petron said it has fortified its leadership position with 39 percent of the total market as of end-July this year.

In the case of its Malaysian operations, the company’s priority continued to be the rebranding of Esso and Mobil service stations into the Petron brand. The company aims to rebrand 550 service stations over the next few years. The new stations feature improved facilities and personalized services.

http://business.inquirer.net

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Stock News 2012: SMC sells 60% of Bank of Commerce

San Miguel Corp. has finalized a deal to sell a controlling stake in medium-sized lender Bank of Commerce to Malaysian banking giant CIMB Group for more than $200 million.

An Inquirer source privy to the transaction said SMC had agreed to sell “almost 60 percent” of the banking unit to CIMB for a consideration of between $200 million and $250 million. The final agreement was targeted for signing within the next few days, the source added.

The buy-in deal with CIMB was seen to allow San Miguel to focus on new ventures such as power generation and infrastructure while still participating in the growth of the bank as a minority investor. The San Miguel group, through San Miguel Properties and San Miguel Retirement Fund, owns about 79 percent of Bank of Commerce, which means that the transaction will keep the local conglomerate as a strategic partner in the bank.

The deal was finalized after CIMB’s due-diligence audit on the bank during the past few months.

“Given the aggressiveness of SMC to reconsolidate its holdings with the takeover of Philippine Airlines, power assets and other possible acquisitions overseas, it needs such liquidity to help acquire more businesses,” said Astro del Castillo, managing director at local fund management firm First Grade Holdings. “It seems like SMC continues to roll out the barrel, disposing some assets and using cash to focus on what will be good for it in the long run.”

For Bank of Commerce, Del Castillo said CIMB’s entry could make the local bank “a player to keep an eye on.”

“It will be major player. Definitely, it will help Bank of Commerce be at par with the big banks. The financial and technical expertise of the new investor will definitely be an exciting event in the years to come,” he said.

CIMB, Malaysia’s second-biggest bank, has about $98 billion (P4.12 trillion) in assets, or bigger than the resources of the top three Philippine banks combined. It has long been seeking to gain a foothold in the Philippine banking system as part of its ambition to become a strong regional player especially as the Association of Southeast Asian Nations (Asean) veers toward economic integration by 2015.

CIMB claims to have the widest retail branch network across the region and packages itself as an “indigenous Asean investment bank.”

The Malaysian bank is likewise buying most of the Asia-Pacific units of the Royal Bank of Scotland, which has been rationalizing its operations in the region.

Based on the fourth quarter 2011 statement of financial condition, Bank of Commerce had assets of P96.03 billion, making it the 16th-largest in the country in terms of resources.

Bank of Commerce is capitalized at P19.44 billion. It has a deposit base of P71.81 billion and a loan book of P44.57 billion.

The entry of CIMB is also seen allowing Bank of Commerce to improve its profitability and asset quality ratios. The local bank has a return on equity of 4.38 percent and an above-industry non-performing loan ratio of 10.47 percent.

http://business.inquirer.net/53791/smc-sells-60-of-bank-of-commerce