Tycoon Andrew Tan-led conglomerate Alliance Global Group, Inc. (AGI) has set aside P4 billion for a new stock buyback program that would be undertaken in the next two and a half years to enhance shareholder value.
AGI’s board has authorized the new stock repurchase program, which will be executed in the open market through the trading facilities of the Philippine Stock Exchange (PSE).
“The company shall repurchase shares using cash and book them as treasury shares,” AGI said in a disclosure to the PSE on Friday. It said it had sufficient retained earnings to support this exercise.
“The new buyback program shall be implemented in an orderly manner and shall not adversely affect the company’s and its subsidiaries’ prospective and existing projects,” the disclosure said.
To date, AGI has about 12.95 billion in issued capital stock, including 10.27 billion common shares. Of the issued shares, about 9.65 billion are outstanding while 620.6 million are lodged as treasury shares.
Companies with sufficient earnings typically resort to stock buybacks when they feel that their shares are undervalued by the market.
AGI is currently valued by the stock market at around P98.42 billion.The conglomerate posted an attributable second quarter net profit of P6 billion, which was a 132-percent growth from the low base seen last year when quarantine restrictions were at their strictest. Sequentially, its second quarter net profit rose by over two times the P2.56 billion attributable net income booked in the first quarter despite the reimposition of lockdown measures from late March until early April.
Liquor arm Emperador Inc., its business unit that has defied the earnings downturn caused by the COVID-19 pandemic, broke a new record as its second quarter net income grew by 60 percent year-on-year to P3 billion. This sustained a 53-percent growth in first half profit to P5.1 billion.
AGI’s attributable net income surged by 124 percent year-on-year to P8.5 billion in the first semester.