business

Del Monte Pacific shuts facilities in 4 US locations

August 23, 2019

DEL MONTE Pacific Limited (DMPL) is shutting several factories in the United States as part of a restructuring program that seeks to bring down costs.      In a statement posted on its website, the canned fruit manufacturer said it is closing facilities in four locations owned by US subsidiary Del Monte Foods, Inc.      The facilities include those in Sleepy Eye in Minnesota and Mendota in Illinois, which will stop production at the end of the current peak season. The company will also divest from its facilities in Cambria, Wisconsin and from its manufacturing assets in Crystal City, Texas.      DMPL will transfer production in these locations to other facilities within the US. The company looks to fully utilize the capacity of its existing plants after the divestment.      “This decision has been difficult and has come after careful consideration. This restructuring is a necessary step for us to remain competitive in a rapidly changing marketplace,” DMPL Managing Director and Chief Executive Officer Joselito D. Campos, Jr said in a statement.      “Our asset-light strategy will lead to more efficient and lower cost operations,” he added.      The facilities are part of Del Monte Foods’ 10 plants in the US, which sells products under brands Fruit Naturals, Orchard Select, SunFresh, and Fruit Refreshers. The company also has two plants in Mexico.      In the Philippines, DMPL operates a 26,000-hectare pineapple plantation in Mindanao, dubbed as the largest fully integrated pineapple operation in the world. It also has a beverage bottling plant and frozen fruit processing facility in the country.      DMPL earlier postponed the P17.5-billion initial public offering of local unit Del Monte Philippines, Inc., due to market volatility. The company sought to raise money to prepay or repay the group’s existing debt.      In its fiscal year ending April 2019, DMPL reported a net profit attributable to the parent of $20.32 million, versus an attributable loss of $36.49 million the year before. Revenues, however, slipped 11% to $1.95 billion.      DMPL is listed on both the main board of the Singapore Stock Exchange and the Philippine Stock Exchange.

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SSS benefit, pension disbursements up

August 23, 2019

THE SOCIAL Security System (SSS) has released benefits and pensions worth P95.71 billion in the first six months to its 3.19 million members, with the bulk going to retirement funds.      In a statement on Tuesday, the state pension fund said it disbursed P55.7 billion worth of retirement benefits to 1.57 million pensioners from January to June, 8.6% higher than the P51.28 billion released in the same period last year.      Payouts for death claims by one million beneficiaries saw an increase of 4.8% to P28.63 billion in the first half from P27.32 billion a year ago.      Disbursements for disability and funeral benefits in the January-June period respectively totalled P3.59 billion, up 7.8% year-on-year, and P2.14 billion, up 9.7%, and went to 208,863 recipients.      Sickness benefits also climbed 14.9% to P1.51 billion in the first semester from the P1.32 billion logged in the same period last year, and went to 235,000 members.      SSS President and Chief Executive Officer Aurora C. Ignacio said in the statement that the growth in beneficiaries and claims may be attributed to the implementation of the Republic Act (RA) 11220 Expanded Maternity Leave Law in May and RA 11199 or the Social Security Act of 2018 signed into law last February.      RA 11220 increased the paid maternity leave to 105 days from 60 days, with an additional 15 days for solo mothers.      Meanwhile, RA 11199 adjusted SSS’ contribution rate to 12% from 11% and the monthly salary credits of its members to a minimum of P2,000 and P20,000 maximum.      “In the first half of 2019 alone, the number of beneficiaries and claims have already posted significant growth since the implementation of new laws and policies of the administration,” Ms. Ignacio said.      Meanwhile, total revenues of the state pension fund increased to P115.53 billion in the first half, up 20.9% from last year’s P95.55 billion, SSS said in the statement.      Broken down, contribution collections and investments and other income stood at P99.08 billion and P16.45 billion, respectively, in the first half, which SSS said climbed due to the higher contribution rate and monthly salary credit.      “Further, our investment and other income bounced back this period driven by strong and favorable market conditions,” Ms. Ignacio added.      SSS’ assets stood at P542.27 billion at end-June, 6% higher than the P511.47 billion booked in the comparable year-ago period.      “With our strong financial performance this semester, we are hoping to further strengthen the fund and ensure the continued service and providing for more and more members in the future until perpetuity,” Ms. Ignacio said.

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BSP posts P29.88-B net income in H1

August 23, 2019

THE Bangko Sentral ng Pilipinas (BSP) had a net income of P29.88 billion in the first six months of 2019, almost unchanged from same time last year of P29.45 billion, partly due to modest foreign exchange (FX) rate gains.      The BSP registered FX rate gains – which are realized gains from FX rate fluctuations – of P9 billion end-June this year versus P21.51 billion same period in 2018.      Based on the BSP’s latest unaudited statement of income and expense, revenues were up significantly by 76.2 percent year-on-year to P65.32 billion from P37.08 billion, while expenses also increased by 42.3 percent to P41.43 billion from P29.12 billion.      Interest income from its international reserves and domestic securities, for the first six months, was up by 48.3 percent to P53.22 billion from P35.88 billion end-June 2018. Miscellaneous income which includes trading gains, fees, penalties and other operating income, increased to P12.10 billion from just P1.19 billion last year.      Interest expenses for the first six months also went up by 65 percent to P21.49 billion from P13.02 billion. Other expenses totaled P19.94 billion which was also higher by 23.85 percent from the previous year’s P16.10 billion.      As of end-June, the BSP’s assets reached P5.107 trillion, up 8.1 percent from P4.726 trillion same time in 2018. Total liabilities also rose by 7.9 percent year-on-year to P4.963 trillion from P4.616 trillion.      Last year, the BSP reported a net income of P39.85 billion which was higher by 69.50 percent from P23.51 billion in 2017. Its FX rate gains was at P53.13 billion from only P15.48 billion in 2017. The central bank’s amended law or Republic Act 11211 (“An Act Amending Republic Act No. 7653, Otherwise Known as the ‘New Central Bank Act’, and for Other Purposes”) has allowed the BSP to increase its capitalization by P150 billion, or from P50 billion to P200 billion. This will be funded solely from the declared dividends of the BSP.

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Cebu Pacific pins growth hopes on cargo business

August 20, 2019

CEBU PACIFIC operator Cebu Air, Inc. is looking to ramp up the expansion of its cargo business, banking on the continued growth of the logistics industry.      “The business plan is for the cargo side to grow faster than the overall passenger side. If we succeed in that, then of course, by definition, we will grow (cargo) to a bigger portion of the total (revenue) pie,” Alex B. Reyes, vice-president of Cebu Pacific’s cargo division, told reporters in the launch of its first all-cargo freighter Wednesday.      “We’re just responding to the demand in the market place. If we can supply it, then we’ll grow along with the demand in the market place,” he added.      The Gokongwei-led budget carrier draws its profits from three business segments: passenger, cargo and ancillary services. In the first half, revenues from the passenger segment grew 18% to P33.35 billion, from ancillary services by 23.8% to P8.52 billion, and from cargo by 7% to P2.84 billion.      Mr. Reyes said Cebu Pacific is optimistic on its cargo business, noting that the 7% revenue increase in the past six months shows its growth potential in the region.      He said despite the 5.4% decline in Asia-Pacific demand for air freight as of June — based on data from the International Air Transport Association (IATA) — Cebu Pacific was able to maintain its growth momentum during the period.      The company’s cargo business is still largely supported by the belly capacity of its Airbus fleet, but it is now exploring more opportunities, starting with all-cargo planes.      Cebu Pacific took delivery of its first all-cargo aircraft, a reconfigured passenger ATR 72-500, which it will start deploying next month. The next one is expected to arrive before yearend.      “The ATRs are supposed to supplement the total capacity that we have. But they’re still relatively small compared to the total network capacity,” Mr. Reyes said.      “The freighter is brand new to us in terms of operations. We don’t have experience yet operating an all-cargo aircraft. But this is the first step in that direction,” he added.      The ATRs will initially operate domestically, but the company aims to fly them within the region someday.      Cebu Pacific Vice-President for Commercial Planning Alexander G. Lao said the arrival of more Airbus planes and the operational launch of the ATRs in the remainder of the year prepares the company well for cargo expansion.      “The main portion of our cargo revenue business continues to be driven from the Airbus fleet, because that’s really a higher capacity aircraft in terms of both weight (and) volume, and the associated revenue with it,” he said.      “We believe that by the second half, we’ll actually grow much faster in terms of total seats and total flights than we did in the first half,” he added.      The new ATR freighter will fly out of Manila when it starts operations in September, but will be moved to the Sangley air base once it opens in November.      Cebu Air booked a net income of P7.14 billion in the first half of the year, up 116% due to an increased passenger volume and higher average fares.

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Cebu Landmasters books P256-million profit in Q2

August 20, 2019

CEBU Landmasters, Inc. (CLI) booked a 6% decline in attributable profit for the second quarter of 2019, as most of the projects completed for the period were part of joint ventures.      In a regulatory filing, the Cebu-based property developer reported a net income attributable to the parent of P255.8 million in the April to June period. This came on the back of a 20% increase in revenues to P1.63 billion.      “That’s a result of the percentage of completion. Most that have been completed in the first half is mostly for joint ventures, that’s why it’s slower,” CLI Chief Finance Officer Beuregard Grant L. Cheng said in a media and analysts’ briefing in Taguig yesterday.      For the first half, net income attributable to the parent climbed 13% to P854.34 million following a 34% uptick in revenues to P3.495 billion.      The listed company said it remains on track to hit an attributable profit of P2 billion for full year 2019, as unrecognized revenues totaled P12.9 billion by end-June.      “Internally, we’re pretty much on track and we’re pretty confident of hitting our guidance numbers,” Mr. Cheng said.      The company attributed its growth in the first half to high-end projects such as 38 Park Avenue in Cebu City, as well as the on-time construction of its projects that allows it to quickly turn over the units.      Reservation sales for the period stood at P5.26 billion, driven by the sales of its newly launched residential project called One Paragon Place in Davao City which is now 78% sold out.      CLI also benefited from its growing leasable portfolio, as it generated a 16% increase in revenues to P27.7 million. The company ended the first half with 11,815.15 square meters (sq.m.) in gross leasable area, with another 69,234 sq.m. under construction. It targets to have 200,000 sq.m under its network by 2023.

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Auto sales sustain uptrend in July

August 16, 2019

MOTOR vehicle sales continued inching up with 205,945 units sold as of July or a modest 3.16 percent increase against 199,628 units sold in the same period last year boosting confidence that the domestic motor vehicle industry would be able to exceed last year’s sales by the end of this year.      A joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) showed encouraging growth indicators.      Notably, the report showed Suzuki Philippines, Inc. now placing fourth largest from fifth place last month in terms of sales with 13,119 units or 18.3 percent growth from 11,086 units last year. Suzuki now accounts for 6.37 percent market share among 25 members of CAMPI and TMA.      Among the positive indicators was the July sales which posted a double-digit growth of 13.5 percent with 31,810 units from 28,038 units recorded in the same period a year ago. On a month-on-month basis, sales performance is slower by measly 0.4 percent against 31,950 units recorded in the previous month.      CAMPI President Rommel R. Gutierrez expressed optimism the industry would finally exceed last year’s sales, which floundered following the imposition of higher taxes under the TRAIN Law.      “We are optimistic that if we are able to sustain this growth trend, we will be able to exceed our sales performance of last year,” said Gutierrez.      He noted of positive factors such as continued and strong sales campaigns and stable supply of units have outweighed the unfavorable effects of the off-peak season to the overall sales growth. Historically, July is also considered as one of the lean months of the industry.      Of the overall seven-month sales, commercial vehicle sales grew 5.5 percent to 144,130 units from 136,669 units while the passenger car segment was still in the negative 1.8 percent to 61,815 units from 62,959 units last year.      Industry leader Toyota Motor Philippines still continued with a runaway market share of 42.28 percent to 87,574 units from 84,401 units in the same period last year.      Mitsubishi Motors Philippines followed with 19.4 percent market share with 35,977 units sold from 38,827 units last. Nissan Philippines, Inc. cemented its hold on the third spot with 53.6 percent growth in sales to 24,711 units from 16,091 units.      Completing the top five is Ford Motor Company Philippines, Inc. with 13,095 units, but a 10.8 percent decline from the same period last year of 14,685 units last year.

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