Combined first semester profits of listed companies decline – PSE

MANILA, Philippines – The combined net profits of Philippine Stock Exchange-listed companies fell by seven percent in the first half of 2011 compared to a year ago as higher input costs dampened consumer demand and gnawed at earnings particularly in the industrial, holding firms and services sectors.

The PSE reported, however, that combined revenues grew by 15.3 percent to P1.85 trillion.

“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 these price pressures, along with the cautious sentiment over adverse developments in the global markets.”

The industrial counter was the biggest drag to overall profits in the first semester, declining by 31.1 percent in combined income due to a higher base registered by some firms the previous year, which came 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., on the other hand, posted lower equity in net earnings of associates.

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

The combined net earnings of the services sector also fell by 9.2 percent as earnings of airline operators such as PAL Holdings Inc. and Cebu Air Inc. were adversely affected by the spike in average aviation fuel prices. Meanwhile, 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 skyrocketing prices of commodities globally, the combined net income of mining/oil firms surged by 184.1 percent as average global metal prices improved, benefiting the likes of Philex Mining Corp., Semirara Mining Corp. and Nickel Asia Corp.

The property sector likewise posted a 30.6-percent increase in combined net earnings. A non-recurring gain from the sale of investment 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. Meanwhile, SM Prime Holdings, Inc.’s net earnings expanded as new malls were opened and old malls underwent expansions.

The financial sector also defied the downtrend owing largely to improved trading gains and the increase in service charges and fees posted by some banks such as Banco de Oro Unibank and Union Bank of the Philippines.  Net interest incomes of Metropolitan Bank & Trust Co. and Bank of the Philippine Islands also grew following increases in interest rates on loans, receivables and trading securities.