corporate

Ayala Corp. income down 17% as lockdown hits businesses

May 18, 2020

EARNINGS of Ayala Corp. (AC) dropped 17% to P6.7 billion in the first quarter as the coronavirus pandemic dragged its property, banking and industrial segments.     In a stock exchange disclosure on Wednesday, the listed conglomerate said its consolidated revenues fell 11% to P61.72 billion in the first three months of the year, reflecting the impact of government lockdowns across its business units.     If it were to isolate the estimated impact of the coronavirus crisis, AC said its net income would have been flat due to the P1 billion divestment gains from merging AC Education and iPeople last year.     The company’s costs and expenses during the period fell 10% to P45.64 billion. Capital expenditures for parent-only businesses stood at P6.9 billion.     By business segment, real estate arm Ayala Land, Inc. posted the largest profit drop of 41% to P4.3 billion. This is attributable to the 38% lower property development revenues at P17.2 billion due to the eruption of Taal volcano in January. Leasing revenues from shopping centers and hotels also fell 9% and 17% to P4.6 billion and P1.6 billion, respectively, because of the enhanced community quarantine (ECQ) in mid-March.     Banking unit Bank of the Philippine Islands booked 5% lower net earnings at P6.4 billion, traceable to its aggressive provisioning during the period. The company posted P4.2 billion in loan-loss provisions as it expected an increase in non-performing loans because of the pandemic.     Profits of telecommunications arm Globe Telecom, Inc. slipped 2% to P6.6 billion due to higher depreciation from network investments and an increase in non-operating charges. Its capital expenditures rose 22% to P10.7 billion to support higher demand for data-related services.     Power segment AC Energy Philippines, Inc. swung to a profit  of P1.96 billion from a net loss of P2 million last year. This was driven by the P1.3-billion pre-operating revenues from its Mindanao-based subsidiary GN Power Kauswagan Ltd. Co., on top of the recovery of costs it incurred from adjustments in the construction and operations of its power plants.     Water unit Manila Water Co., Inc. posted a 4% net income growth to P1.3 billion due to non-recurring events of paying a regulatory penalty and waiving water bills last year. Its revenues rose 9% partly due to higher billed volumes.     Industrial segment led by AC Industrials saw a net loss of P564 million on the back of a global slowdown. Integrated Micro-Electronics, Inc. booked a net loss of P235 million, largely due to the lockdown of its facilities in China in February. AC Motors posted a net loss of P204 million, mostly due to the closure of its Honda Car Philippines facility in Laguna.     “While the outlook for the business environment has fundamentally changed as a result of this crisis, we take comfort in the fact that we have always maintained a strong balance sheet that provides us with flexibility as we navigate the uncertainties,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said in a statement.     “[W]e have put in place a health protocol to ensure the re-entry of our workforce in a safe and productive way… We believe this is a critical step as our businesses readjust to this new environment,” Ayala Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala added.

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Teleconsultation comes to the aid of non-Covid patients

May 16, 2020

[14 May 2020] CAGAYAN DE ORO CITY—While most businesses are shuttered, and office employees are working from home, the medical community must work hard to stay open to patients yet be tightly guarded by Covid-19 restrictions. The challenge for doctors is how to continue treating their patients even though their clinics are closed.  How can they “meet up” with patients without exposing themselves and their families to the risk of infection? Technology provides a solution: teleconsultation.  It minimizes the need to travel and face to face contact, thus protecting both the patients and health professionals from exposure to health risks.  For the first time in her 30-year practice, Dr. Corazon Mata attends to patients remotely. She is in charge of the obstetrics and gynecology hotline for the Telekonsulta Service of the Northern Mindanao Medical Center (NMMC).  Every day, she fields queries from ob-gyn patients all over Region 10, which covers the provinces of Misamis Oriental, Misamis Occidental, Bukidnon, Camiguin and Lanao del Norte. With the rapid spread of Covid, other health cases have been overshadowed, with many hospitals like NMMC recording a significant drop in patient consultations at the emergency room and out-patient clinics. The NMMC is a tertiary public hospital and one of the Covid referral centers in the region of 5 million. “This is the main reason we decided to start the NMMC Telekonsulta Service,” says Dr. Aris Austria, Telekonsulta project leader. “We were concerned particularly for our patients with chronic conditions requiring long-term medical care. Every healthcare facility should not focus only on handling the Covid-19 crisis but also consider minimizing ‘collateral damage’ on non-Covid patients.”  The NMMC Telekonsulta Service targets noncritical cases and aims to provide a venue for patients to directly consult medical professionals through their mobile phones.  Smart Communications partnered with the hospital by providing them with LTE phones capable of unlimited texts and calls to all networks and data connection. Each phone was assigned to doctors handling a specific field of specialization, such as pediatrics, obstetrics and gynecology, surgery or internal medicine. Since the start of the project in late March, the NMMC doctors have collectively handled more than 400 consultations, sent out almost 200 electronic prescriptions and facilitated around 50 referrals. They have also set appointments for actual clinic consultations for cases where a clinic visit is absolutely necessary. “A good part of diagnosing a patient is doing a complete physical,” says Dr. Ramon Yap, an internist-gastroenterologist. “But I believe the majority of patients can be safely managed through teleconsultation, albeit some patients may really have to be seen by a doctor in a clinic or referred to an appropriate institution like NMMC.” The experience is new to his 17-year practice, but he says doctors have to adapt. “The threat to the doctors is very real. We also have to think about protecting ourselves and our families, aside from trying to give comfort and healing to our patients. The limited resources that we have in our locality has made the practice of medicine very daunting and probably even unsettling.” As of the first week of April, the Department of Health (DOH) Region 10 had identified more than 4,000 persons under monitoring and around 300 under investigation. With more cases of Covid-19 positive patients and new admissions of suspected cases, the region’s health officials are not letting their guard down. The doctors admit that there are limitations to what they can perform without a face-to-face interaction, but they are finding ways to cope with this. Dr. Austria, a pediatrician, reports that teleconsultation has necessitated more parental engagement. He tells parents, “listen to the child’s breathing, feel their skin or pulse, touch the tummy, and describe what you find.” It is not the ideal way of examination, he concedes, so doctors should be cautious in utilizing information drawn from a teleconsultation to diagnose a patient’s condition. Pediatrics has the highest number of consultations. Dr. Jannie Lyne Palisbo, whose clinic is closed, is grateful that she can continue to treat her patients from home. “It is reassuring to both the patient and us physicians,” she says. Dr. Austria opines, “Teleconsultation should remain an option for patients under any circumstances that call for it, to hasten medical interventions, and to keep NMMC accessible to all the people in Region 10.”  With doctors and patients engaged in a back-and-forth exchange of information during teleconsultation, he appreciates that Smart ensures unhampered communications. The unlimited texts and calls are “a huge advantage,” enabling doctors to attend to as many patients as possible, he adds. Dr. Peter Quiaoit, NMMC medical training officer, also thanked Smart for making the out-patient department services “a phone call away” in the time of crisis.  “Smart is committed to providing innovative communications solutions that help fight the Covid pandemic.  The NMMC has taken a new path, using technology to enable their doctors to treat patients despite the current restrictions.  That’s why we are quite happy to support their initiative,” said Mon Isberto, Smart public affairs head. This being the institution’s first time to implement teleconsultation, the Telekonsulta team faced a lot of challenges, including a lack of proper guidelines or standard operating procedures, especially in consideration of patients’ informed consent and data privacy. Dr. Austria adds, “We also lacked essential materials, gadgets and enough volunteers to keep teleconsultation running. However, with support from our hospital administration and private companies like Smart, we were able to set it up eventually.” With the proper equipment and appropriate systems in place, teleconsultation will surely be part of the future of medical practice. As access to the internet and data-capable phones increases, there will be huge improvements in teleconsultation results, lowering the risk of misdiagnosis. With the Covid-19 pandemic far from over, and the risks remaining for even longer, interventions such as this will become part of the new normal, and technology will play a huge part.

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Food industry expects minimal impact on food supply amid ECQ

May 15, 2020

THE country's food industry such as Aboitiz food business unit Pilmico Foods Corporation echoed the government's assertion on sufficient food supply amid uncertainties brought about by the coronavirus disease 2019 (Covid-19) pandemic.     “Pilmico’s business continuity plans are in place and running, and this has allowed us to operate business as usual to meet the needs of our stakeholders," said Tristan Aboitiz, president and CEO of Pilmico Foods Corporation, in a statement on Tuesday.     "We have rigorously implemented our strict biosecurity processes to ensure the safety of our teams who report to work, and our supply chain has remained largely intact during the various ECQs (enhanced community quarantine) that have been implemented across the country. This means that our facilities are prepared to continuously cater to the requirements of our customers, which should allow us to deliver our products and meet their needs,” he said.     During the last meeting of the Inter-agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID), the Department of Agriculture (DA) presented the food supply outlook for 2020, with most commodities actually forecast to end at a surplus by year-end.     In April, the DA was assigned to chair the Task Group on Food Security created by the IATF-EID.     According to the adjusted DA report, the projected supply by the end of December 2020 will be 94 days worth for rice, 234 days for corn, two days for fish, six days for vegetables, and 253 days for chicken.     Pilmico assured the public and its stakeholders that its operations remain normal.     “As a leadership team, we have spent the last few weeks learning as much as we can about the disease, and assessing how it has impacted and will continue to impact our industry. It is critical that we understand how it affects our team members, customers, and communities, so we can make the necessary changes to different aspects of our operations,” Aboitiz said.     “Our company remains committed to helping sustain the food value chain by consistently being present and delivering raw materials needed to continue food production,” Aboitiz said.     “The flour and feed mills in Iligan and Tarlac, as well as farms, continue to operate, serving the needs of the customers despite challenges in logistics and distribution which can be attributed to COVID-19,” he added.     Aboitiz said that Pilmico’s Southeast Asian facilities are operating normally as well.     Last year, the company fully acquired Gold Coin, an international food group that operates within Southeast Asia (SEA), making Pilmico a significant regional player.     “We are currently focused on ensuring that our current production facilities across the (SEA) region are optimized and that utilization is maintained at a high level so that we can adequately cater to the needs of our customers,” said Pilmico and Gold Coin Food Group President and CEO Hubert de Roquefeuil.     “Needless to say, this includes integrating seamlessly with Food Group Philippines, in order to optimize synergies in procurement and cross-selling across countries,” he said. (PR)

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Local airlines cancel commercial flights until May 31

May 15, 2020

PHILIPPINE Airlines (PAL), Cebu Pacific, Cebgo and Philippines AirAsia on Wednesday announced the extension of the suspension of their commercial flights until May 31.     The local carriers issued their advisories after the government’s decision extending the so-called “community quarantine” period in Metro Manila and other areas until the end of May.     PAL, operated by PAL Holdings, Inc., said: “We confirm that all Philippine Airlines domestic flights to or from our hubs in Manila, Cebu and Clark will remain canceled up to May 31, 2020.”     The flag carrier also said it was “evaluating the possibility of flying international routes and/or domestic routes to and from its Davao hub, in coordination with concerned government authorities.”     “We will announce any planned flights once these are finalized,” PAL added.     PAL plans to operate a reduced number of weekly flights on most domestic routes and on selected international routes by June 1. “But this will depend on the COVID-19 (coronavirus disease 2019) conditions: community quarantine restrictions, travel bans imposed by various governments and their impact on  passenger demand, and above all on the public health and safety situation in each of the countries that PAL serves,” it said.     Affected PAL passengers can convert their tickets to a travel voucher. They may also rebook their tickets for free or request a refund without penalties.     Cebu Pacific, operated by Cebu Air, Inc., and its subsidiary Cebgo said its domestic and international flights remain canceled from May 16 to 31.     Philippines AirAsia, Inc. also canceled all its domestic and international flights until the end of May.     Cebu Pacific and Cebgo said affected passengers can rebook their travel tickets for free, place the full cost of their tickets in a travel fund valid for one year, or request a full refund.     “Processing of refunds will start after the Community Quarantine is lifted and regular work schedules resume. However, due to the unprecedented volume of requests for refunds, the process will take as long as three (3) to four (4) billing cycles,” Cebu Pacific said.     For its part, Philippines AirAsia said its guests with existing flight bookings made on or before 12 May 2020 with a departure date between March 23 and July 31, 2020 can select any new travel date before October 31, 2020 on the same route for an unlimited number of times without any additional cost, subject to seat availability.     Philippines AirAsia also said its guests can choose to retain the value of their tickets in the AirAsia BIG Member account for future travel with the airline to be redeemed within 730 calendar days from the issuance date.     “The travel date of the new booking can fall on any date within the published flight schedule on airasia.com,” it added.     AirAsia Group Berhad announced recently the new rules that its passengers will have to follow when flight operations resume after the government-imposed lockdown period. It said guests will be required to bring and wear their own face masks before, during and after flight. Guests without masks will be denied boarding.     PAL assured the public that all its aircraft have air filtration systems, and all its crew will be in full personal protective equipment to protect every passenger on board against viruses. Social-distancing cabin seating options as well as simplified meal or snack service will also be carried out.     Cebu Pacific passengers, as in other airlines, will also be required to wear face masks upon entry at the airport terminal and for the duration of the flight.     The budget carrier will minimize face-to-face contact between its ground staff and passengers.

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SMC abandons Holcim buy as PCC closes to end review

May 15, 2020

THE Philippine Competition Commission (PCC) has learned that San Miguel Corp. (SMC) pulled out its plan of acquiring Holcim Philippines, Inc. (HPI) when the antitrust body is nearly finished with the second phase of the review of the transaction.     SMC made a disclosure to the Philippine Stock Exchange Monday about backing out from the deal but PCC said it has yet to receive formal notice from both parties withdrawing the transaction.     SMC subsidiary First Stronghold Cement Industries Inc. (FSCII) will no longer buy the 85.73 percent share of HPI after the agreement has expired in accordance with its terms.     The acquisition deal amounts to USD2.15 billion.     “The Commission notes that the 10 May 2020 deadline was internally agreed upon by the transacting parties and was within their prerogative to extend as needed,” the PCC said in a statement Tuesday.     The PCC is doing the Phase 2 review of the transaction but was suspended, along with all proceedings, due to the enhanced community quarantine.     SMC and HPI have yet to get PCC’s nod after its Merger and Acquisition Office flagged competition concerns arising from the transaction, such as monopoly in Northwest Luzon and increased market power and potential collusion among inter-related cement companies controlled by FSCII in the Northeast Luzon, Central Luzon, and Greater Metro Manila areas.     “The Phase 2 review of the transaction was suspended upon the parties’ submission of voluntary commitments. PCC rejected the proposed commitments after they were found insufficient to address the competition concerns, reverting the transaction to Phase 2 review. The parties, however, have yet to file their respective comments to answer the competition concerns raised in the SOC,” the antitrust body said. (PNA)

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SMC drops $2-B Holcim acquisition

May 12, 2020

SAN MIGUEL Corp. (SMC) is terminating its $2.15-billion acquisition of Holcim Philippines, Inc. after failing to obtain clearance from the Philippine Competition Commission (PCC).     In a statement on Monday, the diversified conglomerate said it would “no longer proceed” in buying 85.73% shares in Holcim after its agreement lapsed on May 10 without getting the required approval of the PCC.     With the discontinuation of the proposed acquisition, SMC said the supposed tender offer of Holcim shares held by minority shareholders is likewise withdrawn.     SMC, through First Stronghold Cement Industries, Inc. (FSCII) — a unit of SMC subsidiary San Miguel Equity Investments, Inc. — was buying 5.53 billion common shares in Holcim, the local arm of Switzerland-based LafargeHolcim Ltd.     The deal was made on May 10, 2019 with the purpose of expanding SMC’s foothold in the country’s cement industry.     As part of the transaction, FSCII was supposed to do a tender offer of shares in Holcim held by minority investors equivalent to 14.27% of its total issued and outstanding capital stock.     While the Department of Trade and Industry earlier said the buyout might result in lower prices of locally produced cement, the PCC said it might substantially lessen competition in the grey cement market in Luzon.     It flagged that FSCII is under SMC, and SMC is under Top Frontier Investment Holdings, Inc., which has two cement plants set to open in the next two years: Northern Cement Corp. and Oro Cemento Industries Corp.     The PCC likewise noted that SMC President and Chief Operating Officer Ramon S. Ang is the majority owner and chairman of Eagle Cement Corp.     “Sellers, distributors, and hardware owners in the relevant markets viewed Eagle Cement and Northern Cement as ‘sister companies’ and part of the Top Frontier group,” the competition watchdog said in January.

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