Holding firms bare mixed results;
some ‘a little below expectations’

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By Krista Angela M. Montealegre
National Correspondent

THE COUNTRY’s biggest conglomerates turned in mixed reported earnings results in the second quarter, dragged by the absence of non-recurring items from asset sales and trading gains of the banking business that inflated profits a year ago, according to separate disclosures to the stock exchange on Friday.

‘THE EARNINGS REPORTS aren’t really moving the market,’ said one analyst.

Results in the April-June period showed Ayala Corp. registering a marginal increase in its net profit and DMCI Holdings, Inc. growing its bottom line by seven percent.

In contrast, GT Capital Holdings, Inc. and LT Group, Inc. reported lower earnings in the three-month period.

JG Summit Holdings, Inc. did not include its second-quarter results in its disclosure, but first-half earnings trekked lower.

“It’s a mixed bag though, generally, some were a little below expectations,” Luis A. Limlingan, business development head at Regina Capital Development Corp., said in mobile phone message.

“The earnings reports aren’t really moving the market,” Miko A. Sayo, trader at AP Securities, said in a separate interview.

Ayala, the country’s oldest conglomerate, penciled an annual two percent growth in second-quarter earnings to P8.1 billion, as higher securities trading gains recognized by Bank of the Philippine Islands in the previous year tempered profitability.

In the first half, Ayala’s net income rose nine percent to P15.1 billion year-on-year, driven by the strong contributions of its real estate and power generation businesses.

“We are pleased with the overall strong of our businesses. The active portfolio management, new business initiatives, and financial discipline we employed in recent years — supported by a healthy domestic economy- continue to bolster Ayala’s growth trajectory,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala was quoted in the statement as saying.

The holding company owned by billionaire David M. Consunji grew its net profit by seven percent to P3.65 billion from P3.4 billion last quarter, pushing the first-semester figure by 21% to P7.6 billion from P6.3 billion powered by its power, real estate and construction businesses.

After taking into account a one-time gain of P111 million from the partial divestment of its stake in Subic Water and Sewerage Co. in March 2016, DMCI Holdings’ core earnings improved by 19% to P7.6 billion in the six-month period from P6.4 billion.

“We had a very good first half. Our performance in the second half will likely be more modest due to the higher strip ratio of SMPC compared to the first half,” DMCI Holdings Chairman and President Isidro A. Consunji said in a statement.

GT Capital, the holding firm for the business empire of tycoon George S.K. Ty, reported that consolidated net income attributable to equity holders of the parent company dropped by a third to P4.14 billion in the second quarter from P6.16 billion.

In the first semester, consolidated net income attributable to equity holders of the parent company fell 21% to P7.24 billion from P9.11 billion in the same period a year ago.

Earnings last year got a boost from non-recurring gains due to the sale of Global Business Power Corp. to Beacon Powergen Holdings, Inc., an affiliate of Metro Pacific Investments Corp. (MPIC), and Charter Ping An Insurance Corp. in the amount of P3.2 billion.

Core net income rose 19% to P7.4 billion in the first six months of 2017 from P6.2 billion driven by the record car sales of Toyota Motor Philippines Corp., double-digit growth in the property business composed of Federal Land, Inc. and Property Company of Friends, Inc. and higher equity in net income of associates.

“GT Capital’s first-half 2017 financial results are in line with expectations due to the healthy contributions from our core businesses,” GT Capital President Carmelo Maria Luza Bautista said in a statement.

“The sustained strength of the domestic economy for the first six months of 2017 reinforced our company’s solid performance. We look forward to the rest of the year with optimism as our component companies continue to be on track with their growth and expansion objectives.”

LT Group’s attributable net income slipped two percent to P2.28 billion in the second quarter from P2.33 billion a year ago.

As a result, first-semester earnings was flat at P4.53 billion, as Philippine National Bank’s earnings slid 38% from a year ago which included a P1.48-billion gain from the sale of real properties.

Meanwhile, Gokongwei-led JG Summit saw a 16.5% decrease in consolidated net income for equity holders of the parent to P14.64 billion in the first half from P15.99 billion after booking mark-to-market hedging losses and rising fuel prices hit its airline business.

Excluding non-operating and non-recurring items, JG Summit’s core net income was flat at P15.95 billion.