Philweb embarks on share buyback program

MANILA, Philippines—Publicly listed Philweb Corp. will embark on a stock buyback program after the management of the gaming firm expressed belief that its share price was currently trading below its inherent value.

In a statement, Philweb president Dennis Valdes said the decision to undertake the buyback program was also made due to the firm’s “excess and unallocated cash.”

“The company’s stock is currently trading at such low levels that it definitely makes sense for Philweb to take advantage of the opportunity and scoop up the available shares from the open market and enhance shareholder value,” he said.

The company said its board of directors had delegated to management the timing, number of shares, price and other terms concerning the buyback. “The management was tasked to determine what is best and appropriate for the company,” the statement said.

In approving the buyback program, the Philweb board noted that the company held excess cash “currently earning relatively low yields from its money market placements.”

It added that the board also noted the “promising” growth prospects for the firm in the Asia-Pacific region.

“Given these considerations, it was decided that a share buyback program is the most logical course of action for the company,” Valdes said.

Recently, PhilWeb reported a robust increase in earnings for the first nine months of 2012 due to what it said were strong results from its e-Games cafes nationwide. The gaming firm with operations around the region said its net income during the January-September period increased by 24 percent to P681 million from the same period last year.

The performance was driven by results from the company’s operations, primarily in the e-Games cafes or PEGS that it operates for the state-owned Philippine Amusement and Gaming Corp.

The fastest growth was delivered by PhilWeb’s Asia-Pacific subsidiary, which operates scratch card businesses in Cambodia and Timor Leste and a Sweeps Center in Guam.

PhilWeb recently received approval from the government of Timor Leste to begin the construction of a new electronic gaming cafe in that country.