SM Prime nets P7.6B
Property giant SM Prime Holdings grew its net profit in the first quarter by 15 percent year-on-year to P7.6 billion on a double-digit growth in revenues from shopping mall and residential development.
Driven by the expansion of its mall and residential businesses in key cities all over the country, SM Prime’s consolidated revenues reached P23.4 billion in the first three months, higher by 14 percent from the same period last year.
“The growing revenue contribution of our mall operations in the provinces and increasing reservation sales of our residential projects in Metro Manila drove our bottom line higher and kept us in line with our first quarter target in 2018. Nevertheless, we plan to continue expanding in key cities all over the Philippines to sustain our growth targets over the next few years,” said SM Prime president Jeffrey Lim said in a press statement.
SM Prime posted a 10-percent revenue growth in its malls business to P13.9 billion, accounting for 59 percent of total business.
The new malls that opened in 2016 and 2017 helped improve the mall rental revenues, delivering P11.9 billion, 12 percent higher from last year’s PHP10.7 billion. These malls include SM City San Jose Del Monte in Bulacan, SM City Trece Martires in Cavite, SM Cherry Congressional in Quezon City, SM City East Ortigas in Pasig City , SM CDO Downtown Premier in Cagayan de Oro, S Maison in Pasay City, SM Cherry Antipolo in Rizal, SM City Puerto Princesa in Palawan, SM Center Tuguegarao Downtown in Cagayan, SM Center Pulilan in Bulacan and SM Center Lemery in Batangas.
SM Prime’s malls operating income increased by 11 percent to P7.8 billion while operating margin was steady at 56 percent. Excluding the impact of newly opened malls, same-mall- sales grew by 7 percent year-on-year for the first three months of the year.
On the other hand, cinema and event ticket sales declined by 9 percent to P1.11 billion due to less-than-stellar international blockbuster movies shown compared to 2017.
Meanwhile, SM Prime’s residential group, led by SM Development Corp. (SMDC), posted a revenue growth of 25 percent in the first quarter to P7.5 billion. This unit reported a double-digit growth in residential real estate sales due to more projects being turned over from 2015 to 2017.
As an indicator of future growth, SMDC’s reservation sales grew by 20 percent in terms of sales value to P14.8 billion in the first quarter. In terms of unit sales, it was almost flat at 3,894. SM Prime is in line with its target to launch 12,000 to 15,000 residential units this year. |
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DoubleDragon’s mega-project rides on Mainland Chinese demand
MANILA – DoubleDragon inaugurated one of its biggest developments on Monday, with Chinese-run online gaming companies accounting for 60 percent of its occupants, a company official said.
Once fully operational, DoubleDragon Plaza will have 280,000 square meters of leasable space on 7 floors. The white building with patches of blue, yellow and green sits on a 4.8-hectare property just a few minutes drive from shopping malls, condominiums and billion-dollar casinos.
The property is close to being 100 percent fully leased, said DoubleDragon chief investment officer Hannah Yulo.
DoubleDragon welcomes strong demand for commercial space from the Chinese mainland, Yulo said, adding this is also felt in other developments in the capital.
The company is a partnership between Filipino-Chinese billionaires Edgar “Injap” Sia and Tony Tan Caktiong, founder of the country’s largest fast food operator, Jollibee.
Rival developers DMCI, SM Prime Holdings, Rockwell Land and Federaland have all noted increases in demand for residential and commercial space from Mainland Chinese.
Chinese companies have employed Mandarin and Fookien-speaking real estate agents to entertain prospective clients, who are eyeing properties in central business districts or in the Manila Bay area, industry sources said. |
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Megawide-GMR to bid for Clark airport’s O&M
MACTAN, CEBU — The consortium of Megawide Construction Corp. and India’s GMR Infrastructure Ltd. is joining the bidding for the operations and maintenance (O&M) contract for the Clark International Airport in Pampanga.
Interested parties can purchase the bid documents for the project starting today.
“Megawide-GMR intends to participate in the bid for Clark O&M. We will carefully study the terms and qualifications set by the Bases Conversion and Development Authority,” the consortium said in a statement.
The government is adopting a hybrid public-private partnership (PPP) model for Clark Airport. Under this policy, the government will fund the construction of the new terminal in Clark, while the O&M contract would be auctioned off to the private sector.
Megawide-GMR earlier won the auction to build the new Clark terminal late last year.
Meanwhile, GMR Megawide Cebu Airport Corp. (GMCAC) is set to start commissioning the new passenger terminal of the Mactan-Cebu International Airport (MCIA) on June 22, with President Rodrigo R. Duterte set to grace its opening.
GMCAC President Louie B. Ferrer told Manila-based reporters flown here last week the new international terminal is on track to open ahead of the July 1 schedule, as provided in the concession agreement, despite previous delays in the turnover of the project to the consortium of Megawide and GMR.
GMCAC won the contract for the P17.52-billion Mactan-Cebu International Airport Passenger Terminal Building project under the Aquino administration’s flagship public-private partnership (PPP) program and the concession to develop MCIA for a period of 25 years.
With the opening of Terminal 2 and the launch of new flights out of Cebu, MCIA is eyeing passenger traffic to reach 11.2 million this year, up 12% from the passenger count of 10 million in 2017, said GMCAC Chief Executive Advisor Andrew Harrison.
GMCAC will immediately start work on the phased rehabilitation of Terminal 1 once the new terminal, which will cater to international flights to and from Cebu, commences operation.
MCIA serves 25 domestic destinations with seven carriers, and 22 international destinations with 17 airlines. Last year alone, it opened eight new routes to China.
In the next two years, new routes connecting Cebu to Europe, Australia and other Southeast Asian countries and expanding connections to China, Japan and South Korea will be in the works. GMCAC has been in talks with airport operators in Sweden, Australia and Japan to market Cebu as a destination and to showcase MCIA as an ideal gateway to the Philippines.
“We’ve only got the tiny tip of the iceberg when it comes to China. Our focus is on Australia and Europe,” Mr. Harrison said.
GMCAC is attributing the growth of MCIA’s passenger traffic to its destination marketing initiatives, which is anchored on strengthening Cebu’s connectivity and its positioning as a viable gateway to the rest of the Philippines as well as a major transfer hub to other countries.
The shutdown of Boracay to tourism is expected to boost passenger volumes for MCIA, said Ravishankar Saravu, GMCAC chief commercial adviser.
“We see some airlines are re-routing their flights from Boracay to Cebu. We are not seeing yet, but we should,” said Mr. Saravu.
In the event the government decides to close Cebu to tourism for rehabilitation, GMCAC expects passenger traffic to remain positive because of the strong business activity in the region, while noting that other tourism sites have initiated a cleanup in their own respective areas.
Last February, GMCAC was granted the original proponent status for its proposal to upgrade and expand the Mactan-Cebu airport at a cost of P208 billion.
The government turned over the airport’s operation and maintenance to the Megawide-GMR consortium on Nov. 1, 2014. This, however, did not include the improvement, operations, and maintenance of the runway and other related facilities, which to date remain with the Mactan-Cebu International Airport Authority. |
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Finance dep’t. in no hurry to appoint new head of SEC
THE Department of Finance (DoF) said it has a positive view of the performance of Teresita J. Herbosa, who chairs the Securities and Exchange Commission (SEC), and has made no decision on a recommendation for her successor.
Asked whether the DoF will seek the reappointment of Ms. Herbosa, Finance Secretary Carlos G. Dominguez III told reporters last week: “I’m sure there are several candidates for that position, but I think the Chairman is doing a good job now. There’s no need to rush.”
The DoF, which supervises the SEC, has made no decision on who will follow Ms. Herbosa, Mr. Dominguez added.
“I’m not in a rush… She’s doing a reasonably good job,” he said.
“If somebody isn’t doing their job, I will be in a hurry. But I’m not. I’m comfortable with her performance,” added Mr. Dominguez.
Ms. Herbosa has served out her seven-year term after being appointed in May 2011, but remains in place at the SEC pending the appointment of a new Chairperson.
In her capacity as the head of the SEC, Ms. Herbosa is also a member of the Anti-Money Laundering Council (AMLC) and the head of the Credit Information Corp.
Separately, Mr. Dominguez said he is considering former Finance Secretary Margarito B. Teves to head the Social Security Commission (SSC).
“Gary is a good guy to consider. He was a Congressman… He performed quite well as President of LBP (Land Bank of the Philippines) and Secretary of Finance,” Mr. Dominguez said.
“You have to remember Gary was the Secretary of Finance when the world was crumbling,” he added.
President Rodrigo R. Duterte in February decided not to renew the appointment of former SSC Chairman Amado D. Valdez whose term lapsed on June 30, 2017.
Mr. Teves was a member of the House of Representatives from Negros Oriental’s Third District from 1987 to 1998. He was Finance Secretary from 2005 to 2010. |
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Shares to decline amid weak investor sentiment
LOCAL EQUITIES may continue to fall this week, as higher oil prices and faster inflation, among others, drag down investor sentiment.
The Philippine Stock Exchange index (PSEi) mounted a last-minute recovery on Friday, adding 0.14% or 11.09 points to close at 7,546.19. This allowed the market to recover from its lowest close in a year last Thursday, when it tumbled to 7,535.10, versus April 19, 2017’s 7,522.98 finish.
Week on week, the index dropped 2.26% or 174.83 points, weighed down by property which closed 2.6% lower; holding firms that slipped 1.3%; and financials that shed 2%.
“The consecutive three days of gains that we saw last week have proven to be a dead cat bounce, as it quickly reversed after testing the 7,800 resistance level. This did not come as a surprise as we expected the index to test the support level at 7,500,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a market report.
This week, Mr. Mangun noted that the PSEi could fall even further, potentially breaking the 7,500 support level.
“Based on market sentiment we will continue to see this market go lower… Investors are still worried about the different economic factors. Oil prices continue to rise which will push inflation higher. The Philippine peso has been another concern, it has stabilized at the P51.60 area after constantly testing its resistance at P52.40,” he said.
The analyst said for the PSEi to recover, trading volume would have to pick up first. Value turnover last week was down by 12% to an average of P5.3 billion per day.
Online brokerage 2TradeAsia.com, meanwhile, said that investors will turn to the Bangko Sentral ng Pilipinas’ policy review on May 10. This is after the United States Federal Open Market Committee decided to keep interest rates steady during its meeting last May 2.
“Markets have been anticipating for a possible 25-basis point hike, which we view as more responsive to control inflation and prevent further capital flight. Listed firms are also more aptly prepared, with majority of debt negotiated on fixed rate term,” 2TradeAsia.com said in a market note.
Investors will also be seeking clarity on the latest executive order on contractualization as well as details on the second package on the Tax Reform for Acceleration and Inclusion law, according to 2TradeAsia.com.
Several firms are due to report their first-quarter earnings this week. This includes PLDT, Inc., Globe Telecom, Inc., Energy Development Corp., First Gen Corp., Petron Corp., Manila Water Co., Inc., Ayala Land, Inc., Robinsons Land Corp., Ayala Corp., San Miguel Corp., and San Miguel Food and Beverage, Inc.
With this, 2TradeAsia.com cautioned against volatility in the market. The online brokerage placed the market’s immediate support at 7,400, while resistance may play between 7,600 to 7,700. |
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Maynilad allots P743M for pumping stations
MAYNILAD WATER Services, Inc. has set aside P743 million in 2018 to fund the construction of new pumping stations and reservoirs that will boost water pressure for thousands of its customers while connecting a million more to the west concessionaire’s network.
“We in Maynilad have made it our mission to improve the living conditions of our customers through better water access. Hence, we keep investing in the infrastructure enhancements needed to connect new customers and boost service levels for existing ones,” said Ramoncito S. Fernandez, Maynilad president and chief executive officer, in a statement.
The new facilities will be constructed in Valenzuela and Muntinlupa, and will have a combined water storage capacity of 75 million liters. They will allow the company to store more water for better supply management in the areas to be served. About 87,000 customers are expected to benefit from the improved water pressure.
The two pumping stations and reservoirs will be equipped with high-efficiency pumps that can raise water pressure to 16 pounds per square inch (psi) from the current 7 psi in the barangays Maysan and Gen. T. de Leon in Valenzuela, and Imus in Cavite.
They will also allow Maynilad to bring surface water to residents in the covered areas who either rely on deep wells for their supply or have limited-to-no-water access, Maynilad said.
The Valenzuela and Muntinlupa facilities are expected to be completed by the fourth quarter of 2019. Ahead of these, the new facilities that will start operating this year include those in Bacoor and Imus in Cavite province.
Maynilad is an agent and contractor of Metropolitan Waterworks and Sewerage System (MWSS) for the west zone of the greater Manila area. Its coverage spans certain areas in Manila, Quezon City and Makati City. It also covers Caloocan, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon.
Outside Metro Manila, the company covers the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario — all in Cavite province. |
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Chinese banana trader doubles orders from Davao planters
DAVAO CITY — China’s GoodFarmer Banana Trading Corp. is increasing its banana purchases from Davao producers to 300 containers from 150 containers a week between this year and 2019, a company official said last week.
GoodFarmer Country Manager Michael Li said the company, among the biggest sellers of bananas in China, is also looking at expanding its market by exploring new areas.
“There is still a big requirement for bananas in China; we can still grow our market,” Mr. Li said during a tour of about 30 stakeholders from Guangzhou province to the banana farms of Davao del Norte.
The group said the banana industry in the region is efficient and modern, citing the packing houses of the Tagum Agricultural Development Co., Inc. (Tadeco) in Sto. Tomas, Davao del Norte.
“We never see a packing house like this in China,” Mr. Li said, noting that some of the visitors, including growers and suppliers, “want to know about the best practices of the local banana industry.”
Last year, GoodFarmer signed a marketing agreement with Tadeco subsidiary Anflo Banana Corp. for about 840,000 boxes of Class A bananas annually for two years.
The bananas will be sourced from Anflo Banana’s farms in Pantukan, Compostela Valley and Don Marcelino, Davao Occidental.
In 2015, government data show China bought about 448,000 boxes of fresh bananas from Philippine growers.
Apart from the Philippines, GoodFarmer also imports banana from Ecuador, Costa Rica, Colombia, and Vietnam.
The other agricultural commodities it buys from the Philippines are pineapples from Bukidnon and Cagayan de Oro City, and dragon fruit from Biñan, Laguna.
GoodFarmer, which started operations in Davao City in 2011, also exports to the Philippines agricultural products from China such as garlic, ginger and apple.
“We have grown very fast here,” Mr. Li said. |
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PLDT completes partial sale of Rocket Internet shares
PLDT Inc said it has completed its partial sale of its Rocket Internet SE shares.
PLDT said in a statement that Rocket Internet AG has accepted 6.8 million Rocket shares tendered by PLDT subsidiary PLDT Online Investments Pte. Ltd. at €24 per share for a total consideration of €163.2 million or around P10.51 billion. This represents around 67.4% of the Rocket shares held by PLDT Online.
Rocket will settle the consideration on or before May 14.
In February, PLDT Chairman, President, and CEO Manuel V. Pangilinan said the company may sell its position in Rocket to fund its capex, which is expected to stay above P50 billion for this year.
To recall, PLDT invested €333 million (around $362 million) for a 10% stake in Rocket in August 2014. In October 2014, Rocket Internet went public, which effectively diluted PLDT’s stake, which now stands at 6.1%.
However, the Rocket investment proved disappointing, as its startups recorded heavy losses. |
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MiCab says it won’t impose surge pricing
NEWLY-ACCREDITED transportation network company (TNC) MiCab Systems Corp. said it will not charge booking fees or implement surge pricing, unlike other taxi-hailing companies.
Eddie F. Ybañez, company chief executive officer and cofounder, said the MiCab application guarantees passengers will only have to pay fares according to the taxi meter, unlike other ride-hailing services that hike fares depending on demand.
“What you see on the meter is what you pay. So you are able to travel in a clean, comfortable, modern cab at a fraction of the cost of traditional ride-hailing solutions,” he said in an e-mail interview.
MiCab is a TNC founded in Cebu by Mr. Ybañez and Kenneth Baylosis. It said it currently has 6,000 drivers servicing 4,300 cabs in Metro Manila, Baguio, Cebu, Bacolod and Iloilo. The Land Transportation Franchising and Regulatory Board (LTFRB) issued a Certificate of Accreditation to MiCab last April 30.
Similar to dominant player Grab Philippines, MiCab offers incentives to its drivers to motivate them to provide good service.
“Based on a combination of two key metrics — acceptance rating and rider rating — we award our top drivers with gift certificates. They are also recognized as one of our top drivers on our in-cab tablets,” Mr. Ybañez said.
He added said MiCab generates revenues through a business-to-business (B2B) advertising model.
“We offer advertising space on our taxi toppers as well as our in-cab tablets. Having a B2B model ensures that a clean, efficient, and comfortable ride will always be affordable for passengers,” Mr. Ybañez said.
MiCab continues to expand its driver base by partnering with top taxi companies and through word-of-mouth,” he said.
Mr. Ybañez said the company does not tolerate rude taxi drivers, and takes passenger complaints very seriously. Aside from being “hands-on” in addressing complaints, MiCab uses its data to ensure drivers are kind and polite.
“Based on our data, we have found that our rating system has produced a virtuous cycle with all our drivers: Good drivers are encouraged to maintain their positive demeanor, and drivers who need to improve find out where they need to do so until they become as highly rated as their peers,” he said. |
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Indonesia’s Go-Jek wants to operate in PH – LTFRB exec
Indonesian ride-hailing firm Go-Jek has expressed its interest in joining the country’s transport network vehicle service (TNVS) industry, an official from the Land Transportation Franchise and Regulatory Board (LTFRB) said on Monday.
LTFRB board member Aileen Lizada welcomed the move but said that Go-Jek’s entry would still have to undergo strict deliberation.
“Go-Jek is interested to enter and provide TNVS services, which is only 1 of the 18 services they offer,” Lizada told reporters.
“Go-Jek is big. We need to study well as we need to protect the local players,” she added.
Go-Jek officials Rohan Monga and Shinto Nugroho were at the LTFRB on Monday and introduced their company to the LTFRB board.
According to Lizada, Go-Jek plans to enter all cities in the country that have taxi services. Currently, there are only three cities nationwide that have taxi operations: Metro Manila, Cebu, and Pampanga.
She noted that Go-Jek has 250,000 active TNVS in Indonesia. She also said that since there was no regulation of TNVS in Indonesia, Go-Jek can surge its charges up to five times more than its normal price.
Lizada told Go-Jek officials that they might only be allowed up to two times surge in their price should they be allowed to operate in the country. Go-Jek officials, in turn, said they would have to study that concern. /kga |
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Billions of dollar on the line for firms as Trump weighs Iran pullout
DUBAI, United Arab Emirates — From airplanes to oilfields, billions of dollars are on the line for international corporations as President Donald Trump weighs whether to pull America out of Iran’s nuclear deal with world powers.
Regardless of where they are headquartered, virtually all multinational corporations do business or banking in the US, meaning any return to pre-deal sanctions could torpedo deals made after the 2015 agreement came into force.
That threat alone has been enough to scare risk-averse firms, like Boeing Co., into slow-walking deals agreed to months ago. A complete pullout by the US would wreak further havoc and likely frighten off those considering making the plunge.
“I absolutely think those on the fence will not jump in,” said Richard Nephew, a former sanctions expert at the U.S. State Department who worked on the nuclear deal and now is at New York’s Columbia University. “The only ones who will, will be those who see tremendous monetary benefit and no US risk.”
The 2015 Iran nuclear deal lifted crippling economic sanctions that had locked Iran out of international banking and the global oil trade. In return, Tehran limited its enrichment of uranium, reconfigured a heavy-water reactor so it couldn’t produce plutonium and reduced its uranium stockpile and supply of centrifuges.
For Western businesses, the deal meant access to Iran’s largely untapped market of 80 million people. Most prominently, airplane manufacturers rushed in to replace the country’s dangerously dilapidated civilian fleet.
In December 2016, Airbus Group signed a deal with Iran’s national carrier, IranAir, to sell it 100 airplanes for around $19 billion at list prices.
Boeing later struck its own deal with IranAir for 80 aircraft with a list price of some $17 billion, promising that deliveries would begin in 2017 and run until 2025. Boeing separately struck another 30-airplane deal with Iran’s Aseman Airlines for $3 billion at list prices.
But Boeing has yet to deliver a single aircraft to Iran. The Chicago-based company’s CEO recently stressed it understands the “risks and implications around the Iranian aircraft deal,” which would be the biggest business agreement between an American company and Iran since the 1979 Islamic Revolution and US Embassy takeover.
“We continue to follow the US government’s lead here and everything is being done per that process,” Dennis Muilenburg said during a quarterly earnings conference call on April 25. “We have no Iranian deliveries that are scheduled or part of the skyline this year, so those have been deferred again in line with the US government process.”
Airbus, a European airline consortium based in Toulouse, France, likewise continues its sales at the discretion of the American government. At least 10 percent of its aircraft components are of American origin, meaning it requires permission from the US Treasury for its sales to Iran. Airbus has already delivered two A330-200s and one A321 to Iran.
Airbus declined to comment when asked by The Associated Press about its possible plans ahead of Trump’s decision.
European airplane manufacturer ATR struck a $536-million deal with IranAir for at least 20 aircraft last year. It’s already has delivered eight of its twin-engine turboprops to Tehran after earlier winning permission from the US Treasury.
“To date, we are on track to deliver the remaining ATR aircraft in due time, before the end of the year,” ATR spokesman David Vargas told the AP.
The speed at which Western airplane manufacturers went into Iran is contrasted by a slow start by Western energy firms despite the country’s vast oil and gas wealth. The exception is French oil giant Total SA, which in July signed a $5 billion, 20-year agreement with Iran and a Chinese oil company to develop the country’s massive South Pars offshore natural gas field. The natural gas pumped by the deal will go toward Iran’s domestic market.
The deal marked a return to Iran for Total, which pulled out of the country in 2008 as Western sanctions over its nuclear program began to ramp up. Total did not respond to requests for comment, though its CEO Patrick Pouyanne reportedly told Trump in February to stick with the deal.
“If the framework, the rules of the game, change, of course we will have to re-evaluate,” Pouyanne told the Financial Times.
French carmaker PSA Peugeot Citroen reached a deal in 2016 to open a plant producing 200,000 vehicles annually in Iran. Peugeot, once a major player in Iran’s car market before sanctions, did not respond to a request for comment.
Meanwhile, fellow French automobile manufacturer Groupe Renault signed a $778-million deal to build 150,000 cars a year at a factory outside of Tehran.
“The Renault Group is closely monitoring the evolution of the diplomatic situation,” the company said in a statement to the AP, without elaborating.
Volkswagen also began exporting cars to Iran.
“Currently we are tracking and examining the development of the political and economic environment in the region very closely,” the German carmaker said in a statement. “In principle, Volkswagen adheres to all applicable national and international laws and export regulations.”
Nuclear deal co-signers Britain, France and Germany, which have urged Trump to preserve the deal, may seek exemptions to protect their companies if the US snaps back sanctions, said Ellie Geranmayeh, a senior policy fellow studying Iran at the European Council on Foreign Relations.
“This should include a series of exemptions and carve-outs for European companies already involved in strategic areas of trade and investment with Iran, with the priority being to limit the immediate shock to Iranian oil exports,” she wrote Wednesday.-Associated Press |
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