Profits of listed companies jumped by three-quarters to P358B in ’09 — PSE

COMBINED profits of listed companies ballooned by more than three-fourths to P357.84 billion last year due mainly to one-time gains and some improvements in performance, the stock exchange said yesterday.

Higher corporate earnings are expected this year given the economic recovery, bourse officials said.

The Philippine Stock Exchange (PSE) said consolidated net income of public firms rose by 79.6%, with improvements recorded across all sectors.

“The remarkable growth in net profits was driven by huge one-time gains from asset sales by some listed companies, better performances by nearly all sectors, and a low-base effect when profits declined in 2008,” PSE Chairman Hans B. Sicat said in a statement yesterday.

Consolidated revenues of all listed companies also rose by 3.9% to P2.72 trillion from P2.62 trillion in the previous year, with 174 local firms posting gains in net income and 60 recording net losses.

“The asset sales reinforced the view that valuations were too low to ignore and that stocks were worth picking up after the market hit bottom,” Mr. Sicat added.

Conglomerate San Miguel Corp. sold a 43.3% stake in San Miguel Brewery, Inc. to Kirin Holdings Co., Ltd. of Japan for $1.3 billion to bankroll its diversification into energy, infrastructure, mining and telecommunications.

In July, Lopez-led First Philippine Holdings Corp., through First Philippine Utilities Corp., sold 223 million common shares in Manila Electric Co., or a 20% stake worth P20.07 billion, to Pilipino Telephone Corp., a unit of Pangilinan-led Philippine Long Distance Telephone Co. (PLDT).

The PSE index (PSEi) posted a 63% gain year on year in 2009 at 3,052.68, from a record low of 1,759.33 on March 17 last year.

So far, the PSEi has gained 7.3% or 221.58 points at 3,274.26, given strong local fundamentals amid European financial woes.

“The surge in combined corporate earnings moved in the opposite direction of the macro-economy in 2009. This is a reflection of investor optimism that discounted signals from the real economy in 2008, which was quite a challenging year,” Mr. Sicat said.

Last year, the economy grew by 0.9%, the slowest pace in 11 years.

Gross domestic product however rebounded by 7.3% in the first quarter, raising hopes of a continued recovery.

Combined profits of companies that make up the PSEi went up by 54.9%, the bourse said.

Almost all of the subindices posted gains. Consolidated net income of the industrial sector went up by 158.3%; followed by holding firms at 90.7%; the financial sector by 61.1%; the service sector at 52.4%; and property firms at 11.8%.

“But mining and oil sector posted weaker consolidated net earnings as some companies posted weaker sales and increased costs during the period,” the PSE said, without disclosing figures.

“This year, we have noted a significant recovery in the economy, which should augur well for corporate earnings and the stock market,” PSE Chief Operating Officer Val Antonio B. Suarez said in the same statement.

The PSE operates the only stock exchange in the Philippines with 250 listed companies and 132 operating trading participants.

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