Listed companies’ profits down 7% in 1st semester

The combined net profits of Philippine Stock Exchange-listed firms dipped by 7 percent in the first half compared with a year ago, as higher input costs dampened consumer demand and gnawed at earnings particularly of industrial, holding firms and services sectors.

The PSE reported on Thursday that these companies’ combined revenues, however, grew by 15.3 percent to P1.85 trillion in the first six months from a year ago.

“Despite the modest growth in listed companies’ revenues for the period, net profits have decreased overall due to several factors, including higher input prices which may have led to increased expenses,” PSE president Hans Sicat said.

“Consumer demand also seems to have slowed down as a result of the price pressures and the cautious (investor) sentiment over adverse developments in global markets.”

The industrial counter was the biggest drag to profit growth in the first semester, declining by 31.1 percent in total income due to a higher base registered by some firms in the previous year from one-time gains.

This was reflected in the decline in the net earnings of First Philippine Holdings Corp. Also, lower sales volume and average selling prices affected the net earnings of Energy Development Corp. and Aboitiz Power Corp.

First Gen Corp. posted lower equity in net earnings of associates.

Holdings firms also reported a 10.3-percent collective decline in consolidated net earnings largely due to lower profit contributions from associates or subsidiaries, such as the case of Lopez Holdings Corp., JG Summit Holdings and Aboitiz Equity Ventures.

The combined net earnings of the services sector also dipped by 9.2 percent as earnings of airline operators PAL Holdings Inc. and Cebu Air Inc. were adversely affected by the spike in aviation fuel prices.

In the meantime, the absence of political advertisements pulled down television and radio airtime revenues of media firms ABS-CBN Corp. and GMA Network Inc.

The mining/oil, financial and property counters bucked the downtrend in the first half.

With world market prices of commodities skyrocketing, the combined net income of mining/oil firms surged by 184.1 percent. The rise in metal prices benefited the likes of Philex Mining Corp., Semirara Mining Corp. and Nickel Asia Corp.

The property sector also posted a 30.6-percent increase in combined net earnings. A nonrecurring gain from the sale of investments in available-for-sale shares bolstered Megaworld Corp.’s net income. Increased revenues from real estate sales through improved sales volumes of both residential units and commercial lots also boosted the net earnings of Ayala Land and SM Development Corp. SM Prime Holdings Inc.’s net earnings expanded as new malls were opened and old malls underwent expansion.