MANILA, Philippines—Leading conglomerate SM Investments Corp. and fast-food giant Jollibee Foods Corp., two of the country’s blue chip companies, are upbeat on their corporate results for this third quarter.
SMIC sees its third-quarter net profits growing by a double-digit pace relative to the bottom line in the same period in 2010, the company’s chief finance officer (CFO), Jose Sio, told reporters on Wednesday, at the sidelines of a CFO forum held by the Economic Journalists Association of the Philippines, ING Bank and the Financial Executives Institute of the Philippines.
Jollibee CFO Jaime Baysa also said his company’s third-quarter sales were “looking good” and also reported that the surge in input costs that gnawed at earnings early in 2011 have been “stabilizing.”
“We’re hoping that the second semester will be better for both sales and profit margins,” Baysa said.
But while the third-quarter output appeared rosy, Baysa said the problems in the West – including the fiscal crisis in the Euro-zone and the threats of the US falling into another recession – could affect business in the remainder of the year.
“We don’t know what will happen to consumer confidence with all that’s going around. When people get worried, especially as we have a lot of OFWs [overseas Filipino workers], they hold back. Even though you have money, let’s say you have relatives working in Europe, that is a weak factor even if overall, our own economy is doing basically well,” Baysa said.
On the bright side, the Jollibee CFO said cost pressures were softening. “It’s not going up much further. We hope that by the fourth quarter, we’ll have a slight decline in some of the commodity prices. It will be very slight, but that’s still very good news,” he said.
SMIC’s Sio said the conglomerate – led by the family of the country’s wealthiest man Henry Sy – would likely sustain a double-digit profit growth in the third quarter compared with the same quarter a year ago.
“This is driven by all this employment of call center (agents), backroom offices and generally there’s that optimism,” Sio said, noting that remittances continued to flow abundantly into the country.
On a quarterly basis, however, he noted that SMIC’s earnings were seasonally better in the second quarter compared with the third.