Economy – Page 468

PAL to close Cambodia Air deal by Oct

Economy

Aug 122013

MANILA, Philippines – National flag carrier Philippine Airlines (PAL), is set to complete the deal with Royal Group of Cambodia (RCG) to form Cambodia Airlines Co. Ltd. within the next two months. Ma. Cecilia Pesayco, assistant corporate secretary of PAL’s parent firm PAL Holdings Inc., said the closing date of the completion of a joint venture with RCG’s Inter Logistics (Cambodia) Co. Ltd. (ILC) has been moved to Oct. 15. The new closing date is three months longer than the original closing date target of July 15. “We received today the notice from PAL informing us that the closing date for the completion of PAL’s joint venture with ILC has been moved to Oct. 15,” Pesayco told the Philippine Stock Exchange (PSE). PAL is pumping in $10 million worth of equity for a 49 percent stake in Cambodia Airlines that is 100 percent owned by Inter Logistics (Cambodia) Co. Ltd. ILC is 100 percent owned by RGC chair Neak Oknha Kith Meng. PAL is supposed to make a downpayment of 10 percent or $1 million of the total acquisition cost on the completion of closing conditions targeted last July 15 while the balance of $9 million would be paid upon the call of the board of Cambodia Air. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The closing conditions include the registration of the investment of PAL in Cambodia Air as well as the procurement by Cambodia Air of all the necessary franchises, permits, and licenses to operate and Read More …

Huge forex losses drag SMC to P2.4-B loss

Economy

Aug 122013

Huge forex losses drag SMC to P2.4-B loss

MANILA, Philippines – Huge foreign exchange losses dragged diversified conglomerate San Miguel Corp. (SMC) into the red in the first semester. “Including unrealized forex losses, net loss attributable to the equity holders of the parent company amounted to P2.4 billion,” the food-to-power conglomerate said in a regulatory filing. In contrast, SMC posted a net income of P14.12 in the first semester of 2012. SMC said the strengthening of the dollar against the peso “resulted in foreign exchange losses of P10.2 billion in June dragging the company’s overall performance for the (first half).” However, excluding unrealized forex losses, SMC’s recurring net income hit P7.8 billion in the January to June period. “Forex losses mask the solid performance we had in our businesses. But we remain bullish about our underlying performance, which we attribute to a series of competitive advantages that should help us moving forward,” said SMC chairman and CEO Eduardo M. Cojuangco Jr. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 In the first half, the diversified conglomerate’s revenues reached P357.5 billion, up nine percent from last year due to strong performances from food subsidiary San Miguel Pure Foods and Petron Malaysia, which was consolidated into the the SMC Group in April 2012. SMC said its operating income picked up 19 percent to P28.9 billion “brought about by lower generation costs from SMC Global Power Corp. and growth in volumes in the food group’s operations.” Specifically, it benefited from favorable prices of raw materials on the back of higher Read More …

D&L Industries posts 16% profit hike

Economy

Aug 122013

MANILA, Philippines – D&L Industries Inc., a leading manufacturer of customized food ingredients, posted a strong double-digit profit growth in the first half, driven by increased turnover for high margin specialty products. The firm’s net income jumped 16 percent to P655 million in the first semester, keeping D&L on track to hitting a record net income of nearly P1.4 billion for the entire year, a top company executive said. But revenues dropped 17 percent to P4.9 billion due to lower prices of commodities like palm oil that was passed on to customers. However, D&L said it benefited from high margin specialty products like customized specialty food ingredients, plastics and aerosols. High margin products accounted for 66 percent of the group’s overall sales, while low margin commodities like refined vegetable oils accounted for 34 percent of total turnover. “We are progressing further towards expanding our high-margin specialty businesses,” D&L said. The company expects to trim low margin products’ contribution to around 20 percent in the next five years. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “We are capable of doing a lot more products. One reason why our margins increase is because of we are developing more ingredients for food, plastics and aerosols,” Alvin Lao, executive vice president and chief finance officer of D&L, said in a briefing. Hence, D&L said its gross profit margin picked up to 18.7 percent from 15 percent last year while net income margin hit 13.3 percent from 9.5 percent a year ago. “Overall, Read More …

First Gen earnings drop 17% to $77.7 M in H1

Economy

Aug 122013

First Gen earnings drop 17% to $77.7 M in H1

MANILA, Philippines – First Gen Corp. posted a net income of $77.7 million in the first half of 2013, down 17.4 percent from $94 million in the same period last year. First Gen president Francis Giles Puno attributed the drop in earnings to the lower income booked by subsidiary First Gen Hydro Power Corp. (FG Hydro) owing to reduced sales from ancillary services. However, Puno said they had anticipated the decline in earnings for the period. “The dip in earnings was expected given the reduced revenues from ancillary services and further delays in the rehabilitation of BacMan,” the First Gen executive said. “The incident at San Lorenzo’s Unit 60 was unfortunate, but we have already ordered a new transformer to get the unit back in operation as soon as possible,” he added. “While EDC actually generated higher revenues and achieved savings in its operating expenses, the foreign exchange losses could not be avoided with the depreciation of the peso,” he noted. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “The company is extremely busy in executing its growth projects, including the 87-megawatt wind farm in Burgos, the 40-MW Negros transfer project, and the 500-MW San Gabriel natural gas projects,” he added. Puno said the 1,500-MW First Gas plants also incurred higher interest expenses and provision for deferred income tax due to the depreciation of the peso, though partially offset by the contribution of the purchase of the BG Group’s 40 percent stake in the plants in May 2012. Its Read More …

Power, transport needs noted

Economy

Aug 112013

DAVAO CITY — The government eyes an “effective demand forecasting system” to ensure stable power supply in Mindanao and will also undertake a multi-billion peso program to further enhance the trade and tourism potentials of the island, Cabinet officials said at the Mindanao Business Conference (MinBizCon) last Friday.

CNG stations bid out

Economy

Aug 112013

PNOC-Exploration Corp. (PNOC-EC), the upstream energy development arm of state-run Philippine National Oil Co., is seeking offers for the design and construction of its compressed natural gas (CNG) refilling stations in Batangas and Laguna.

Reflecting credit risk in fair value of derivatives

Economy

Aug 112013

(First of two parts) The 2008 financial crisis has led to some significant changes in the areas of fair value and risk management, including an increased emphasis on counterparty credit risk in derivatives. These changes are starting to take root in the Philippines through the implementation of Philippine Financial Reporting Standard (PFRS) 13, Fair Value Measurement, and the adoption of the Basel III capital reforms on counterparty credit risk. PFRS 13, which took effect on Jan. 1, 2013, requires all entities to consider credit risk in determining the fair value of derivatives. The Bangko Sentral ng Pilipinas (BSP) plans to adopt the Basel III capital rules on counterparty credit risk, currently contained in an exposure draft that is expected to take effect starting Jan. 1, 2014 when finalized.

US says Japan has long way to go to open markets

Economy

Aug 112013

US says Japan has long way to go to open markets

WASHINGTON — Japan still has a long way to go before it can say its markets are open, the top US trade official said on Friday. Trade Representative Michael Froman said he hopes Japan’s recent entry into the Trans-Pacific Partnership (TPP) free trade negotiations will provide opportunities to tear down those barriers. “I think we all bear the scars of trying to open Japan’s market in the past,” Froman told reporters at a briefing, acknowledging the “historical difficulties” in the trade relationship. In their long history of trade disputes, the US has alleged Japanese markets are closed to imports because of restrictive practices that are tolerated or even encouraged by the government. At the same time, Japan has relied heavily on exports as an engine of growth for its sluggish economy. Froman mentioned autos specifically — one of the thorniest issues in trade relations. “Right now, all foreign penetration of the Japanese auto market is six percent, and so I think everyone believes there is a long way to go before we can really say the Japanese market is open,” he said. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Japan formally joined the US and 10 other Asia-Pacific nations in negotiations to create a major new trade bloc during the 18th round of talks in Malaysia last month. With the addition of Japan, the 12 countries would account for some 40 percent of world trade volume. The other 10 countries are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Read More …

BPO employees drive growth of convenience stores

Economy

Aug 112013

BPO employees drive growth of convenience stores

MANILA, Philippines – More convenience stores are expected to open in the country to take advantage of strong consumer spending, a top executive of a property consultancy firm said over the weekend. Colliers International research manager Karlo Pobre told reporters that even if there are many convenience stores in the country’s major business districts and information technology centers, more are still expected to open to serve middle class employees, particularly those in the business process outsourcing (BPO) sector. “The market is not saturated yet mainly because of the BPO sector. The closest retail store they (BPO employees) can get into is a convenience store,” Pobre said. The improvement in the income of these individuals is leading to increased spending which will encourage the expansion of convenience stores. “You can just imagine that all buildings will have their own convenience stores,” he said. Among the players in the country’s convenience store market are 7-Eleven, run by Philippine Seven Corp.; Ministop Philippines under the Robinsons Retail Group; and FamilyMart operated by a joint venture of Japanese firms FamilyMart Co., Ltd. and Itochu Corp. with SIAL CVS Retailers of the Rustan’s Group and Ayala Land Inc. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 7-Eleven, currently has 900 outlets nationwide, 323 of which are in Metro Manila. It plans to open 100 more stores nationwide this year. Ministop has over 330 stores in the country, 66 percent of which are located in Metro Manila. FamilyMart, which entered the Philippine market earlier this Read More …

DOE eyes 5,905 MW from new RE projects

Economy

Aug 112013

An example of a renewable energy project. MANILA, Philippines – The Department of Energy (DOE) expects an additional 5,905 megawatts of potential capacity from 347 new projects under the Renewable Energy law. These projects will have an installed capacity of 2,334 MW, according to the DOE. Of the 347 renewable energy projects, 177 are hydropower projects, 39 are geothermal ventures and 37 are wind farms. There are also 34 solar projects, 29 biomass projects and three projects that would utilize ocean energy, the DOE said. There are also 249 pending projects under the RE law, with a potential capacity of 3,301 MW and 20.75 MW of installed capacity. The Energy department is focused on solving the short-term power supply problem in Mindanao. The Mindanao Development Authority (MinDa), has been urging renewable energy investments in the region to help address the current power supply crunch. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The government has been encouraging players in the renewable energy sector through feed-in-tariffs. The FIT regime is a form of incentives for renewable energy players. Feed-in tariffs offer cost-based compensation to renewable energy players among other perks.

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