Meralco expects 2023 core income to hit ‘north of P30b’

By Alena Mae S. Flores

POWER retailer Manila Electric Co. expects core income to reach “north of P30 billion” this year, exceeding last year’s P27.1 billion, on the back of strong financial performance in the first half, a top executive said Monday.

Meralco’s consolidated reported net income also climbed 36 percent to P17.9 billion in the first six months from P13.1 billion in the same period last year.

The board approved interim cash dividends of P8.520 per share payable to all shareholders of record as of Aug. 30, 2023 following the release of the financial results. The dividend payout represented 50 percent of core earnings per share.

“Considering Meralco’s operational and financial performance in the first half of the year, it is reasonable for Meralco to show record sales and earnings for the full year 2023,” Meralco chairman and chief executive Manuel Pangilinan said.

He said the first-half results provided the basis for assuming that the full-year results would be another record high and “may be north of P30 billion.”

Consolidated core net income in the first six months reached P19.2 billion, or 47 percent higher than P13.1 billion in the same period last year, led by the 186-percent increase in contribution of the power generation business. The power generation segment contributed P6.6 billion or 34 percent of the CCNI, buoyed by higher earnings of PacificLight Power Pte. Ltd. in Singapore and the turnaround of Global Business Power Corp.

Consolidated distribution utility energy sales volumes in the first half rose 3 percent to 24,792 gigawatt-hours from 23,968 GWh, as volumes of Meralco and Clark

“All our consumer business-engines are running in full speed. We now have over 12 million customers. The acquired Citi business is contributing around one-third of our income today. CitySavings continues to be a market leader in providing salary loans. UnionDigital is already profitable and growing fast,” Bautista said.

“This kind of momentum gives me confidence that UnionBank will achieve its goal of becoming the largest and most profitable retail bank in the Philippines by 2025,” he said.

Net revenues went up 60 percent to P34.4 billion, while net interest income grew 41 percent to P24.0 billion, on the back of a 43-percent increase in loan portfolio, plus better net interest margin. Net interest margin improved 60 basis points to 5.2 percent. Julito G. Rada

Malaysian payments firm to launch loan facility in

MALAYSIA-BASED

PH

GHL Systems Berhad, the leading payment service company in the ASEAN region, will launch a loan facility for small and medium enterprises this month in the Philippines.

The microfinance facility aims to provide small and medium enterprises with funds to support their cash flow and business growth.

GHL is offering SME customers the convenience of making loan payments through their existing settlement arrangement with the payment service company.

Since its launch in Malaysia in 2022, the GHL SME Loan facility attracted over 700 merchants and disbursed over 40 million Malaysian ringgit (about P285 million) in loans to date. After its successful rollout across GHL’s existing merchant base in the Philippines, the GHL SME Loan will be offered to the broader SME community nationwide in August 2023.

“The GHL SME Loan aims to address these challenges and provide businesses with the financial capital to compete and grow in the Philippines’ thriving business environment,” said newly appointed GHL Philippines chief executive Jay Tirona.

The GHL SME Loan was approved and registered with the Philippines’ Securities and Exchange Commission. Julito G. Rada

Phil-Tower announces full operations of 250 sites

PHIL-TOWER Consortium Inc. announced Monday the full operations of 250 towers in the Visayas and Mindanao which it acquired from Globe Telecom Inc.

“This is yet another big milestone for us of full operational handover of towers from Globe. PhilTower believes in its organizational pillars such as people, process, technology readiness and a faster way of asset management to achieve takeover in a short span of time,” said Phil-Tower chief executive Devid Gubiani.

Electric Distribution Corp. increased 3 percent and 7 percent, respectively.

“Beyond the core distribution business, we have always considered the expansion of our power and non-power subsidiaries as important growth pillars for Meralco. We expect a significant boost to our bottom line this year from the power generation business in particular, which will also drive Meralco’s growth moving forward, especially as we pursue larger generation projects that will help meet the country’s growing demand for power and decarbonization goals, ”Pangilinan said.

BDO’s net income climbed by 47%

to P35.2 billion in first six months

BDO Unibank Inc., the banking arm of the SM Group, said Monday net income jumped 47 percent in the first half of 2023 to P35.2 billion from P23.9 billion in the same period last year, on sustained strength of business segments.

NEW KFC STORE. KFC opens a new store on the ground floor of Robinsons Jaro in Iloilo. KFC’s fourth store in Iloilo was greeted with excitement by residents and tourists in Jaro, which is regarded as the cradle of Christian faith in Western Visayas and is the largest among the seven districts of the province in terms of land area and population. Attending the ribbon-cutting ceremony are (from left) KFC area coach Elvis Maquiso, Robinsons area lease manager Maria Concepcion Sy Ching, KFC operations head Linda Jalandoni and KFC operations manager Angelito Carreon.

“With improving macro-economic trends exemplified by decelerating inflation, sustained GDP growth and stable foreign exchange and interest rates, the bank remains poised to capitalize on emerging growth opportunities given its solid balance sheet, strong business franchise and diversified earnings streams,” BDO said in a disclosure to the stock exchange.

It said the first-half bottom line translated into a return on common equity of 15.1 percent, higher than 11.3 percent in the same period last year.

Net interest income increased to P89.5 billion as gross customer loans expanded 8 percent year-on-year to P2.7 trillion, while deposits rose 12 percent to P3.3 trillion. Non-interest income also grew 11 percent to P38.2 billion, led by robust growth in various fee-based and treasury/foreign exchange businesses.

Pre-provision operating profit reached P52.4 billion, with revenues continuing to grow faster than operating expenses.

Non-performing loan ratio declined quarter-on-quarter to 1.95 percent from 1.98 percent, while NPL coverage improved to 174 percent, with prudent credit and provisioning policies.

Shareholders’ equity increased to P487.5 billion, given the profitable operations. Capital adequacy ratio and common equity tier 1 ratio strengthened to 15 percent and 13.9 percent, respectively, and remained above regulatory minimum levels. Book value per share increased 13 percent to P91.42.

BDO has the country’s largest distribution network, with over 1,600 consolidated operating branches and more than 4,700 ATMs nationwide. It also has 16 international offices including full-service branches in Hong Kong and Singapore. Julito G. Rada

8990 Holdings forecasts P155b in revenues over 8 years on housing sector recovery

By Jenniffer B. Austria

HOUSING developer 8990 Holdings Inc. expects to generate P155 billion in revenues over the next seven to eight years, a top executive said Monday.

Anthony Vincent Sotto, president and chief executive of 8990 Holdings, said in a virtual press briefing the company was in the process of unlocking the value of several properties nationwide as it continued to expand its landbank for future developments. The company’s landholdings reached nearly 710 hectares, with the addition of properties acquired in Cebu and Leyte, as of end-March 2023.

Sotto said the Luzon landbank would account for the bulk of future revenues, with Luzon sales estimated to reach P98 billion, while Visayas and Mindanao were expected to contribute P67 billion and P6 billion, respectively.

Sotto said that in the coming years,

8990 Holdings could expect more revenues from Urban Deca Homes Banilad in Mandaue City, Cebu and the new Deca Homes Pampanga Phase 1 project as turnover schedules were met.

He said the company lined up new launches for 2023 including a five-story condominium project in Batangas, economic housing projects in Bacolod, Davao and Pampanga and several housing projects in Cebu. Sotto said he remained confident about the prospects for this year, as the affordable housing business continued to recover from the effects of the COVID-19 pandemic.

He said with 2023 expected to be a good year despite the high inflation and high interest rate environment, 8990 Holdings could achieve another revenue milestone at the end of the year.

“With strong financials, a robust portfolio and a talented team, we are prepared to seize the opportunities that await us in 2023 and beyond,” Sotto said.

“We have ensured smooth transition through detailed planning, performing drone audits, setting up regional offices and resources and onboarding existing Globe O&M and security partners. We look forward to extending further operational savings to Globe from the establishment of the 24/7 operational capability and distributed field operations teams in the challenging territories of Visayas and Mindanao,” he said. PhilTower and Globe in September last year signed a sale and leaseback deal for the acquisition of 1,350 Globe sites, with the first batch of 578 towers turned over in February 2023.

Darwin G. Amojelar

BSP: July inflation settled below 5% on lower power rates

THE Bangko Sentral ng Pilipinas said Monday inflation in July 2023 likely eased to as low as 4.1 percent from 5.4 percent in June, pulled down by lower power rates, stronger peso and the decline in prices of some food items.

The BSP said in a statement the July inflation would likely settle within a range of 4.1 percent to 4.9 percent. The Philippine Statistics Authority would release the official figures later this week.

“Lower electricity rates, declines in the prices of meat, fruits, and fish items, the rollback in LPG prices and the peso appreciation could contribute to downward price pressures during the month,” it said.

Higher prices of rice and vegetables as well as increased domestic oil prices are the primary sources of upward price pressures in July.

“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation,” it said.

Bangko Sentral Governor Eli Remolona Jr. said monetary authorities should remain vigilant despite the fivemonth deceleration in inflation from a peak of 8.7 percent in January 2023.

Remolona noted the still elevated core inflation in a speech during the BSP’s 30th anniversary reception for the banking community Friday night.

Core inflation, the change in the costs of goods and services, excludes the volatile prices of food and energy.

“It’s too soon to declare [a] victory. Core inflation remains high. There are still upside risks to inflation – for example, risks in the form of El Niño and further supply shocks. We will wait and see,” Remolona said.