Listed firms' combined Q1 net income drops - PSE

Total combined net income of listed firms in the year’s first three months slipped by more than a fifth despite higher combined revenues, data from the Philippine Stock Exchange showed. Citing a study, the PSE said Tuesday the financial performance of listed firms was mixed in the first quarter. Combined net incomes in the January to March period this year of listed companies dropped 22.6 percent to P106.98 billion from P138.21 billion in the same period last year. Meanwhile, consolidated revenues of listed companies rose 10 percent to P857.78 billion from P779.80 billion in the first three months of 2010, the PSE said. Data was gathered from the first quarter 2011 financial statements of 228 out of 247 domestic listed firms which submitted their reports to the PSE. The decrease was mainly due to lower net profits recorded by the Industrial, Holding Firms, and Services Sectors. PSEi members reported a 26.3 percent decline in their net incomes for the period. The combined net incomes of PSEi companies comprised 65.6 percent of the total market net income. "The first quarter earnings of our listed firms reflected the slower growth of our economy after coming from an election year and dealing with tighter government spending. It appears that this is also a consolidation phase similar to what our market experienced after a phenomenal run last year," said Hans B. Sicat, PSE president and chief executive officer. "Despite the early results, investors remain upbeat on the prospects of our listed companies as evidenced by the PSEi hitting a new record high. Hopefully, our firms' second quarter corporate earnings, which should be released between this month and the next, will be able to validate this renewed confidence," added Sicat. In terms of corporate earnings per sector, the Industrial Sector experienced a 47.6-percent decline as some companies posted lower revenues. First Philippine Holdings Corp. registered a decline in net income as a result of lower electricity sales and reduced equity in net earnings of associates. A non-recurring gain from the acquisition of San Miguel Brewing International Limited in the same period last year caused a drop in San Miguel Brewery, Inc.'s (SMB) net income. Aboitiz Power Corp. (AP) and Energy Development Corp. (EDC) experienced reduced net incomes, respectively, on account of lower sales volumes and lower average selling prices. The net income of the Holding Firms' sector meantime declined 21.3 percent due to lower net incomes of companies' subsidiaries. Lopez Holdings Corp. (LPZ) was affected by the decline in FPH's net income as well as ABS-CBN Corp.’s (ABS) lower revenues due to the absence of election-related advertisements which primarily caused the increase in ABS' income contribution in the same period last year. Aboitiz Equity Ventures' (AEV) net income decreased as its subsidiaries, Aboitiz Power Corp. and Pilmico Foods Corp., recognized lower incomes as average selling prices weakened. Philippine Long Distance Telephone Co. also experienced a decline in net income as PLDT's wireless and fixed line business segments posted lower revenues and a decline in foreign exchange gains. Cebu Air, Inc. (CEB) was negatively affected by the jump in average aviation fuel prices. Also,the absence of political advertisements pulled down GMA Network Inc.'s (GMA7) television and radio airtime revenues. Collectively, the consolidated income of the Services Sector slipped 7.1 percent. The Financial Sector's collective net income on the other hand rose 1.1 percent. Metropolitan Bank & Trust Company (MBT) and Bank of the Philippine Islands' (BPI) net interest incomes staged increases as their respective volumes of interest-bearing assets improved. On the other hand, Banco de Oro Unibank Inc.'s (BDO) Other Income item surged as service charges and fees increased and gains on foreign exchange improved. The Property Sector registered a 19.4 percent increase in collective net income. Increased revenues from real estate sales through improved sales volumes of both residential units and commercial lots pulled up Ayala Land Inc.'s (ALI) and SM Development Corp.'s (SMDC) net incomes. Meanwhile, SM Prime Holdings Inc.'s (SMPH) rental revenues increased as new malls were opened and old malls underwent expansions. The Mining & Oil Sector's aggregate income surged 378.9 percent as average global metal prices improved. Philex Mining Corp.'s (PX) revenues from gold, copper, silver, and petroleum increased. Atlas Consolidated Mining & Development Corp.'s (AT) copper and gold sales also grew while Nickel Asia Corp.'s (NIKL) revenue from nickel sales expanded. Meanwhile, the decrease in cost of sales due to diminished volume of coal sold, together with foreign exchange gains improvement pulled up Semirara Mining Corp.'s (SCC) net income. -- CMA/OMG, GMA News