Listed firms’ earnings drop 15% in first half

Net earnings of listed companies declined in the first half reflecting a slowdown in the spending power of consumers due to increased prices, the head of the local bourse said.

Despite a 15.3-percent increase in combined revenues to P1.85 trillion during the period, net earnings of listed firms slipped seven percent to P219.66 billion from P236.23 billion a year ago.

PSE president Hans Sicat said the drop in earnings of listed firms was the result of several factors, including higher input prices, which may have led to increased expenses.

“Consumer demand also seems to have slowed down as a result of these price pressures, along with the cautious sentiment over adverse developments in the global markets,” he added.

Based on PSE data, the industrial sector recorded a 31.1 percent decline in income due to a higher base registered by some firms the previous year, which came from one-time gains, reflected in the decline in the net earnings of First Philippine Holdings Corp. Also, lower sales volume and average selling prices affected the net earnings of Energy Development Corp. and Aboitiz Power Corp. First Gen Corp., on the other hand, posted lower equity in net earnings of associates.

Similarly, the Holdings Firms sector reported a 10.3 percent decline in consolidated net earnings largely due to lower net earnings in associates or subsidiaries posted by firms such as Lopez Holdings Corp., JG Summit Holdings and Aboitiz Equity Ventures.

Combined net earnings of firms under the services sector dipped by 9.2 percent as net profits of airline companies — PAL Holdings Inc. and Cebu Air Inc. — were adversely affected by the spike in average aviation fuel prices while the absence of political advertisements pulled down television and radio airtime revenues of ABS-CBN Corp. and GMA Network Inc.

The financial sector’s collective earnings bucked the downtrend owing largely to improved trading gains and the increase in service charges and fees posted by some banks such as Banco de Oro Unibank and Union Bank of the Philippines. Net interest incomes of Metropolitan Bank and Trust Co. and Bank of the Philippine Islands grew following increases in interest rates on loans, receivables and trading securities.

The property sector also posted a 30.6 percent increase in combined net earnings. A nonrecurring gain from the sale of investment in available-for-sale shares bolstered Megaworld Corp.’s (MEG) net income. Increased revenues from real estate sales through improved sales volumes of both residential units and commercial lots also boosted net earnings of Ayala Land Inc. and SM Development Corp. while SM Prime Holdings Inc.’s net earnings registered growth as new malls were opened and old malls underwent expansions.

The mining and oil sector’s aggregate net income surged 184.1 percent as average global metal prices improved. Philex Mining Corp.’s revenue from gold, copper, and silver, petroleum and coal posted double digit growth. Semirara Mining Corp.’s consolidated revenues from coal and power increased due to higher coal prices. Similarly, Nickel Asia Corp.’s net income rose with the increase in nickel ore prices. –Danessa O. Rivera, Daily Tribune