Business
B3
THURSDAY, AUGUST 11, 2016 extrastory2000@gmail.com
SMC’s income doubles to P32b By Jenniffer B. Austria
D
IVERSIFIED conglomerate San Miguel Corp. said net income in the first half surged 107 percent to P32.28 billion from P17.01 billion a year ago, on the strong performance of traditional businesses and one-time gain from the sale of its telecommunications business.
First-half net sales, however, pany said in a disclosure to the dropped 1 percent to P328.1 bil- stock exchange. lion from P334 billion, the comIncome from operations
jumped 19 percent in January to June to P48.75 billion from P41.09 billion a year earlier. The sale of its telco business enabled San Miguel to book a one-time gain of P11.8 billion, representing mainly recovery of costs/losses, interest expenses and provisions incurred in previous years. Beer unit San Miguel Brewery Inc. performed strongly during the period with consolidated revenues increasing 19 percent to P47.4 billion and operating income gaining 16 percent to
P12.6 billion. Net income rose 20 percent to P8.3 billion. Liquor unit Ginebra San Miguel Inc.’s domestic volumes reached 11.4 million cases, up by 12 percent from last year. Revenues increased 13 percent to P8.4 billion while net income rose to P138 million. San Miguel Pure Foods Inc. also sustained its momentum in the first half as it reported consolidated revenues of P53.2 billion, or 5-percent higher than last year. Meanwhile, San Miguel
Packaging Group’s revenues rose 12 percent to P13.5 billion, driven mainly by its glass business and Australian operations, which posted doubledigit growth. Operating income amounted to P1.33 billion, up 21 percent. Oil unit Petron Corp. posted a consolidated net income of P5.3 billion in the first half, a 55-percent increase from the previous year. The company attributed the growth to a surge in sales volumes, aggressive network expansion, improved production
and cost efficiencies and focused customer-centric campaigns. Meanwhile, SMC Global Power’s consolidated off-take volume reached 9,264 gigawatt-hours in the first half, or 14 percent higher than 2015. As a result, consolidated revenues rose 2 percent to P41.1 billion. Infrastructure unit San Miguel Holdings Corp. generated consolidated revenues of P9.78 billion, or 14 percent higher than last year. Operating income rose 9 percent to P5 billion.
Suspicious power shortage alerts PHILIPPINE elecricity rates remain one of the highest in Asia despite a wide-ranging reform that overhauled the power sector. Past presidents failed to straighten out the convoluted power tariff system amid complaints from local industries and foreign investors. Lowering electricity rates significantly, thus, should be one of President Rodrigo Duterte’s priorities during his six-year term. Cheaper power rates reduce production cost and will make the Philippines more competitive in this part of the world. They will attract more investments, which in turn, create jobs. The road to lower electricity rates, however, is far from being smooth. The rates will likely spike next month after the forced or unplanned outage of several plants with a combined output of 1,297 megawatts early last week. The situation prompted National Grid Corp. of the Philippines to place Luzon in yellow alert. The unplanned outages have led some to suspect that a number of power companies were pushing the government into letting them raise electricity rates. The Energy Regulatory Commission quickly ordered a probe on brownouts affecting Luzon consumers and the spate of yellow and red alerts declared over the main grid. ERC chairman Jose Vicente Salazar called the attention of the market surveillance committee of Philippine Electricity Market Corp. to find out if some private companies were cashing in on an apparent power shortage to sell electricity at higher prices. One such alert was interestingly issued on a Saturday, leading many to ask how a power supply shortage could happen when most factories, offices and other establishments were on a weekend break. Salazar was opiqued when several companies failed to submit reports on the power outages despite an ERC directive. The failure may have led the ERC head to warn that he woulde probe “firms which may have taken advantage of the tight supply to drive up spot prices for their own benefit or that of their affiliates.” Priority agenda President Duterte should put the power sector in his list of priority concerns to address the problems bedeviling the industry. Government agencies like the ERC and the Department of Energy so far have been doing their share to keep electricity rates at reasonable levels. But a clear signal from the President that he is monitoring the situation should send a powerful message to the industry. After all, the President gave a campaign promise that he would look into the issue of high power rates. ERC’s Salazar, meanwhile, is determined to implement the provisions in the law opening the door to greater competition among service providers in the power sector. The ERC also appears bent on making sure industry players do not connive with their affiliates and that the process of buying and selling electricity is transparent. Salazar, of course, may face stiff challenge, especially from those opposing the reform. This is also a major challenge to Energy Secretary Alfonso Cusi. Cusi so far has stayed on the same course as President Duterte in giving consumers relief from high power rates. The new energy chief can initiate an amendment to the Electric Power Industry Reform Act, if necessary, to finetune the law and make electricity rates more competitive, especially in the trading floor of the Wholesale Electricity Spot Market. Cusi and Salazar should find a way to implement the provisions in the law that promotes greater competition and lower rates. Cusi, on the other hand, is looking into the provision of replacement power for contracted capacities and the creation of technical audit teams to assess the operations and contracts of generation companies and distribution utilities following last week’s outages. “We are keen on improving the power supply situation in the country. We will strengthen the policies and programs and we will work with the Energy Regulatory Commission to ensure that all standards are enforced to ascertain reliable, stable and reasonably priced electricity, because we cannot let the people suffer from power interruptions,” says Cusi. E-mail: rayenano@yahoo.com or business@thestandard.com. ph or extrastory2000@gmail.com
NEW SHIPYARD. Construction company Chua Group of Companies inaugurates a new ship repair and shipbuilding facility in Albuera, Leyte. The
shipyard with 3,000 deadweight tonnage capacity and port facility of Megaship Builders Inc. was partially financed by Development Bank of the Philippines (DBP). Shown are (from left) Aquilino Salsado of the Chua Group of Companies, Chua Group chairman Manuel Chua, Glowinco Fababeir of Banton Liner Transport Services, Chua Group treasurer Theresa Chua, Mario Pagalan of Camotes Ferry Services, Chua Group president Francis Lloyd Chua, Marjun Pagalan of Camotes Ferry, DBP senior assistant vice president Raymond Valdez, DBP assistant manager Kaycelline Cunanan, DBP senior manager Michael Rodrigo Mondoy and DBP assistant manager Stephanie Mariano.
Nickel Asia’s profit plunged 98% in first half By Anna Leah E. Gonzales depreciation and amortization caused by the prolonged rainy NICKEL Asia Corp. said Wednesday net income in the first six months plummeted 98 percent to P24.4 million from P1.49 billion a year ago, on lower shipment and value of nickel. Nickel Asia said in a disclosure to the stock exchange the drop in income was also affected by its share of the losses on its 22.5-percent equity interest in Taganito HPAL Nickel Corp. and its 100-percent equity interest in Coral Bay Nickel Corp. “The profitability of the two plants was affected by very low nickel prices realized during the period,” Nickel Asia said. Earnings before interest, tax,
fell to P1.84 billion from P3.54 billion in 2015. Revenues also dropped to P5.52 billion from P7.97 billion. Nickel Asia said it sold 8.54 million wet metric tons of nickel ore in the six-month period, down from 9.68 million WMT in the same period last year. It said of the total volume of ore shipped, 2.76 million WMT was saprolite ore and 5.78 million WMT was limonite ore, which included 3.40 million WMT delivered to both Coral Bay and Taganito processing plants. Nickel Asia said the lower shipment volume was due to the delayed start of shipments from Hinatuan and Cagdianao mines
season in northeastern Mindanao, where the two mines are located, and a temporary reduction in the deliveries of limonite ore to the Taganito HPAL plant while it was undergoing remedial work. The company realized an average price of $3.92 per pound of payable nickel on its shipments of ore to the two HPAL plants, down from an average price of $6.22 per pound of payable nickel sold in the same period last year. Nickel Asia said for export sales, it achieved an average price of $18.21 per WMT this year, down from $23.20 per WMT in 2015. Nickel Asia president and chief executive Gerard Brimo
would be able to reduce poverty to 15 percent and create some 30 million more middle-class Filipinos. He said even Cardinal Gaudencio Rosales, in a recent interview over Radio Veritas, took note of President Duterte’s decisiveness in a good light and said the “decisiveness of the new government is something you have never seen in many decades . . . the new leadership is really
SM, Ikea in talks for joint venture By Othel V. Campos
WWF-COMCO PARTNERSHIP. WWF-Philippines, the country’s leading conservation organization, signs a partnership with ComCo Southeast Asia, a coalition of premier brand architects and communication trailblazers in the region. Shown the signing the contract are (from left) WWF-Philippines communications and media manager Gregg Yan, WWF-Philippines president Joel Palma, ComCo Southeast Asia regional managing director Ferdinand Bondoy and ComCo Southeast Asia internal affairs director Christine Li.
Salceda expects annual economic growth rate of 7.7% LEGAZPI CITY—The administration of President Rodrigo Duterte is poised to achieve an annual gross domestic product growth of 7.7 percent over the next six years, according to Albay 2nd District Rep. Joey Sarte Salceda. Salceda of PDP-Laban Party said given Duterte’s decisiveness, clarity of strategy and cohesive team of pragmatists in the cabinet, his administration
said the company’s mining operations continued to show great resiliency and remained profitable despite record low nickel prices. “Our first-half performance was, however, affected by our investments in our downstream processing plants, which, as with most other processing plants world-wide, could not maintain profitable operations during this dismally low price environment,” Brimo said.
in the right track.” Salceda, a noted economist, recently drafted a concept paper titled “Philippine Socio-Economic Prospects under the Duterte Administration,” which identified a tailor-fit program of government for the current administration, hinged on what he termed as the “six pillars designed to foster a more inclusive society.” The paper, an economic blueprint subtitled “Active Citizen-
ship and Responsive Institutions, Competitive Economy and Inclusive Development,” also gives a glimpse of the country’s energy situation and six-year growth prospects. Salceda, former Albay governor and chair of the Luzon Area Development Council and the Bicol Regional Development council for six years and nine years, respectively, said the Duterte administration opened
up an opportunity for a strong, inclusive society based on his winning platform of change, law and order, federalism and social justice. He said Duterte’s victory indicated that “Filipinos yearn for a competitive economy and inclusive society through a competent, compassionate and corruption-free government that works with a sense of urgency for the people’s better welfare.”
SM INVESTMENTS Corp., the holding company of tycoon Henry Sy, said Wednesday it is negotiating for a partnership or possibly a joint venture with Swedish furniture brand Ikea. SMIC vice chairperson Tessie Sy-Coson said SM was one of several companies that Ikea was looking at as possible partners in the Philippines. “We have no decision yet. Ikea has a different retailing model unique from retailers here in the Philippines,” SyCoson said in a chance interview at the sidelines of the ongoing National Retailers Conference and Exhibition 2016 at SMX Convention Center in Pasay City. She said Ikea was also in talks with several other retail companies, “so it’s not special that we are talking with them.” “The way they see the Philippines is different. They have some requirements that we are supposed to deliver. These are yet to be met. I can’t tell you what those are. And we have not finalized anything yet,” she said. Sy-Coson said when Ikea sent feelers that it wanted to go to the Philippines, that alone “made everyone interested.”