Stock News 2012: PhilWeb to invest P100 million

LAS VEGAS, NV - MAY 21: A detail shot from a new 'The Hangover' slot machine by International Game Technology at the Las Vegas premiere of the Warner Bros. Pictures movie, 'The Hangover Part II' at the Planet Hollywood Resort & Casino May 21, 2011 in Las Vegas, Nevada. The film opens nationwide in the United States on May 26. (Image credit: Getty Images via @daylife)Listed gaming solutions provider PhilWeb Corp. is investing as much as P100 million in a new company that will manufacture gaming terminals for its local network of 262 e-Games cafes and its various international businesses.

In a statement, Philweb president Dennis Valdes said the company is gearing up to compete in the booming market for these devices worldwide through PhilWeb Gaming Solutions Corp. (PGSC).

The gaming terminals will allow PhilWeb to offer a device that tightly integrates all its gaming software, while improving security and functionality in the gaming experience.

PGSC will be headed by Joe Pisano, who has been in the gaming industry for several decades and was recently named one of the Top 50 most influential persons in the gaming industry by Inside Asian Gaming magazine.

Pisano is also president of Jade Entertainment and Gaming Inc., a regional distributor for the world’s leading manufacturers of equipment used in the gaming industry, like IGT, Novomatic, FutureLogic, Crane and others.

“Pisano has been a friend for many years and his regional experience will prove invaluable as we grow in Asia Pacific. I’m very bullish on our new venture, as this device will significantly improve the gaming experience for our over 40,000 customers per day, who play on our e-Games network of close to 6,000 terminals,” Valdes said.

Valdes said Guam, Timor Leste, Cambodia, Laos and other countries where the company has extended its business activities are also expected to benefit from this venture.

“The market for these devices goes beyond just PhilWeb’s own businesses but into the realm of consumers worldwide. We can make these devices cheaper and better in the Philippines,” Valdes pointed out.

For his part, Pisano said: “I am pleased to start a new venture with PhilWeb, as their spectacular growth over the past years has shown that they are the right partner in Asia Pacific. These devices will be an excellent new business for the entire company in the coming years.”

This new venture is also expected to boost Philweb’s cashflow. In the first half of the year, PhilWeb grew its net income by 30 percent to P480 million as revenues rose 24 percent to P692 million.

Philweb earlier said it was targeting to hit at least P2 billion in profits this year or more than double the P940 million recorded in 2011, mainly driven by robust sales of sweepstakes scratch cards and the sustained growth in revenue from its “Pegs” or Philippine Amusement and Gaming Corp. (Pagcor) Internet gaming cafes.

http://www.philstar.com/Article.aspx?articleId=835036&publicationSubCategoryId=66

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Stock News 2012: Rockwell Land to raise P7 billion via debt

Official seal of City of Taguig (Photo credit: Wikipedia)Lopez-led Rockwell Land Corp. plans to raise as much as P7 billion either through debt or equity to bolster cash reserves.

Rockwell president Nestor Padilla said the company is in discussions with banks and investment banks to “help put together a more realistic fund-raising program” to better prepare them for emerging opportunities in the industry.

“We’re looking at raising between P5 billion and P7 billion either through debt or equity...It actually depends on market conditions. The equity market has not been that bullish lately so we’ll see,” Padilla said.

The company wants to shore up its land bank to sustain its development pipeline for the next five years. It plans to diversify into new geographical areas to take advantage of robust demand for real estate.

“There are a lot of opportunities in Metro Manila and provincial areas. We’re hoping we can close some deals within the year,” Padilla said.

Continuing its tradition of building innovative and world-class properties, Rockwell is looking at branching out into Cebu and Davao to develop projects catering to the upper mid-market.

Rockwell is one of seven companies that are vying for the 74-hectare state property within the Food Terminal Inc. complex in Taguig City. The bidding has been rescheduled to Aug. 14 from Aug. 8 to give bidders more time to study additional information on the property.

The company aims to double its projected P1.1 billion earnings this year in two years or by 2014 on the back of new product launches.

Rockwell currently has 90,000 square meters of space for lease and expects this figure to double by 2014 and triple by 2016.

In the first half of the year, Rockwell reported a net income of P439.7 million on revenues of P2.5 billion. Sales take up jumped by 70 percent to P4.1 billion.

Established in 1995, Rockwell transformed a former thermal power plant into a high-end living environment now known as the Rockwell Center. Sitting on a 15.5 hectare site in Makati City, the company’s flagship project Rockwell Center now comprises five high-rise residential towers, a sports and leisure club, office buildings, a lifestyle shopping center, and a graduate school of law.

http://www.philstar.com/Article.aspx?articleId=835038&publicationSubCategoryId=66

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Stock News 2012: 50 new McDonald's branche

English: The mdonalds logo from the late 90s (Photo credit: Wikipedia)The master franchise holder of McDonald’s in the Philippines expects as much as 50 new branches this year to take advantage of robust economic growth.

The rapid pace of growth will continue for the next three to five years, an executive said.

“We are very excited, we continue to grow. This year we can grow 40 to 50 stores all over the country,” Kenneth S. Yang, president and CEO of master franchise holder Golden Arches Development Corp., said in a chance interview.

This will allow the company to end the year with a record 370 stores nationwide.

Yang said the expansion is 50 percent more than the company did last year, on top of the store renovations.

“Definitely the economy is very strong and I think the growth of the business process outsourcing industry is helping a lot and the overseas remittances continue to be there,” Yang said. “Consumer spending is still very strong so I think,” he added.

The local economy surged 6.4 percent in the first quarter due to government and private sector spending while January to May remittances climbed 5.5 percent to $9.26 billion from a year ago.

Given the strong fundamentals, Yang said the company is maintaining its bullishness and the rapid expansion pace in the next three to five years.

New branches will be driven by a mix of company-owned stores and by franchising. “Our thrust for franchising is outside Manila, on provincial areas,” Yang said.

McDonald’s is also tapping tourist destinations like Palawan, Bohol and Boracay, Yang said.

Benchmark investment for a new branch is around P40 million, with McDonald’s targeting businessmen, professionals and retirees as its franchising partners.

The first branch of the quick service restaurant chain opened in Morayta, Manila back in 1981.

Meanwhile, profitability of McDonald’s is cut by higher operating costs.

“The challenge is really the cost of operating the business. Costs are increasing like commodity and electricity. It is very hard to keep our profitability at the same level so we try to be more efficient,” Yang said.

http://www.philstar.com/Article.aspx?articleId=835037&publicationSubCategoryId=66

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Stock News 2012: Robinsons in talks with Okada

A row of "Wheel of Fortune" slot machines in a casino in Las Vegas. This specific slot machine is themed to the TV game show Wheel of Fortune. (Photo credit: Wikipedia)Robinsons Land Corp. (RLC), the real estate development arm of Gokongwei flagship firm JG Summit Holdings Inc., remains in discussions with Japanese billionaire Kazuo Okada for his $2 billion casino project in Philippine Amusement and Gaming Corp. (Pagcor)’s Entertainment City in Manila.

“We’re still in talks. It’s really gonna be a long discussion,” said RLC president Frederick D. Go when asked for an update on a possible collaboration with the Japanese tycoon.

The company earlier said it was looking at a number of opportunities which include running the retail, hotel and gaming operations for Okada’s project.

Okada, who made his riches in a game that mixes slot machine style gambling with pinball, holds one of four licenses to operate integrated casino resorts worth at least $1 billion each in the 110-hectare Entertainment City.

After hogging headlines a few months ago with his feud with erstwhile business partner Steve Wynn, Okada faces another setback with the Pagcor’s decision to withhold the casino license of Tiger Resorts Leisure and Entertainment Inc. until it complies with the country’s 40-percent foreign ownership limit.

Tiger Entertainment is the local unit of Okada’s Japan-based gaming device maker Universal Entertainment Corp.

Pagcor chairman Cristino Naguiat earlier said the state-run gaming agency has yet to issue a permanent license to Okada which will allow him to commence operations when his casino complex is completed next year.

Okada has reportedly invited several local property firms to join him in the project to meet the constitutional provision limiting foreign ownership of Philippine companies to 40 percent.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=835031

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Stock News 2012: Meralco secures 90% of power supply for customers up to 2019

Meralco (Photo credit: Wikipedia)Manila Electric Co. (Meralco), the country’s largest power distributor, has secured 90 percent of its electricity needs for its customers over the next seven years.

The roughly 2,900 megawatts (MW) in capacity will be cheaper than existing power deals and guarantee customers of reliable supply, company executives said.

“Meralco has signed new highly cost-effective, long-term power supply agreements with various generators for capacities up to 2,880 MW,” the company said.

“This is an integral part of the company’s strategy for helping contain power costs to consumers,” it added.

Specifically, power supply deals were finalized with Consunji-led SEM-Calaca Power Corp., Masinloc Power Partnerss Co. Ltd., Aboitiz-led Therma Luzon Inc., South Premiere Power Corp. and San Miguel Energy Corp.

Meralco will mostly source its electricity requirements from coal power plants, save for South Premiere’s natural gas and diesel plant.

Meralco president and CEO Oscar Reyes said the committed capacity accounts for 90 percent of Meralco’s needs.

The power contracts will give Meralco “some degree of stability until 2019,” Reyes said, adding that the new contracts are cheaper by roughly P1 per kilowatt-hour (kwh) compared with existing supply deals.

The new power supply agreements, without accounting for fuel price escalation, will average at P4.67 per kwh in 2013, lower than the P5.48 per kWh under existing contracts.

However, Meralco said the cheaper electricity might be tempered by higher prices at the Wholesale Electricity Spot Market (WESM).

“Our concern is the balance that we have not contracted...that is largely driven by WESM,” Reyes said.

Demand from customers has been increasing on the back of robust economic growth in the Meralco franchise area.

Consolidated customer accounts rose 3.7 percent to a record 5.11 million as of end-June as the company added 88,391 new customers from the start of the year.

In June, Meralco posted a new record high in sales at 2,942 gigawatt-hours (gwh), eclipsing the 2,776 gwh in June 2010 during the election season, Reyes said.

“What is foremost on our mind is the tightness in power supply,” said Meralco chairman Manuel V. Pangilinan, adding that this could lead to higher prices in the WESM.

Meralco, which is indirectly controlled by Hong Kong-based First Pacific Co. Ltd. and partly owned by San Miguel Corp., is looking to build its own power plant to ensure supply.

Meralco PowerGen Corp. is building a 600-MW coal-fired power plant in Subic, Zambales in partnership with Aboitiz Power Corp. and the local unit of Taiwan Cogeneration International Corp. The project is under the RP Energy Inc. consortium.

“The site preparation is almost complete,” said RP Energy president Aaron Domingo.

“We have finished the technical discussions [with the contractor] and we are now proceeding with the commercial discussions, which we expect to conclude by end of August,” Domingo said.

However, there were reports that the Supreme Court has issued a writ of Kalikasan against the coal plant.

“RP Energy has 10 days to file its verified response upon formal receipt of the order/writ and we will do so within the time frame allotted,” the company said in a statement.

“We respect the process and are mindful of the rights of those who filed the petition,” it added.

Meralco’s core net income, which strips out currency and derivatives-related items, surged 15 percent to P9.02 billion in the first half from P7.82 billion a year ago.

http://www.philstar.com/Article.aspx?articleId=833995&publicationSubCategoryId=66

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Stock News 2012: SM Prime allots P63 B for Phl, China expansion

English: SM Supermalls logo (Photo credit: Wikipedia)SM Prime Holdings Inc., the country’s largest retail landlord, has set a P63-billion three-year capital spending plan to rapidly expand its presence here and in China in its bid to become a regional player.

SM Prime chief financial officer Jeffrey C. Lim said the company is spending P21 billion each year to build four to five new malls at home and one mall annually in China to take advantage of rising consumer spending.

He said the company plans to open up to 18 malls in the next three years.

He said funding for the massive expansion will come from a combination of internally-generated cash and borrowings.

SM Prime expects to end the year with a total of 46 malls across the country and five in China, with an estimated combined gross floor area of 6.3 million square meters.

Earlier this year, it opened SM City Olongapo in Zambales, SM City Consolacion in Cebu and SM City San Fernando in Pampanga. Three more malls are expected to open in the second half - SM City Gen. Santos in South Cotabato, SM City Lanang in Davao City and SM Chongqing in China.

SM Prime’s four malls in China, located in the cities of Xiamen, Jinjiang, Chengdu and Suzhou, contributed P320 million or seven percent to the company’s aggregate earnings. Combined revenues amounted to P1.27 billion or nine percent of total.

The SM China malls are enjoying healthy increases in rental rates, with average occupancy level now at 95 percent.

SM Prime said it continues to see vast opportunities in China given the world’s second largest economy’s growing population and emerging middle class.

The group is currently looking to acquire five properties in its second biggest market. It wants to reach new markets to further widen its geographical footprint.

The expansion is also in line with the SM Group’s strategy to list its China assets either in Hong Kong or Singapore by 2015 in a public offering that could fetch proceeds worth up to $500 million.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=833992

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Stock News 2012: SMDC profits hit P2.7 billion in H1

SM Mall of Asia (Photo credit: MikeVC)
Profits of listed SM Development Corp. jumped by 38 percent to P2.7 billion in the first half of the year, a disclosure to the Philippine Stock Exchange showed Wednesday.

The developer reported an 85-percent surge in home sales  in the period or P19.8 billion in sales. The number of units sold, on the other hand, grew by 72 percent to 8,007 from the 4,655 it posted the previous year.

"SMDC’s residential condominiums are being designed and developed to cater to the Filipino’s growing need for privacy, sophistication, and greater access to retail and home-related services which offer greater convenience and time for families to live a more balanced life,” said Henry Sy Jr, SMDC vice chairman, said.

http://www.philstar.com/Article.aspx?articleId=833587&publicationSubCategoryId=200

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