Benpres cuts loss in 2002 to P1.06-B

Lopez flagship Benpres Holdings Inc. posted a net loss of P1.06 billion last year, an improvement from the loss of P9.99 billion incurred in 2001.

Although Benpres did not post any gain on sale of investments in 2002, this was offset by stronger net earnings of investee companies, particularly First Philippine Holdings Corp. (FPHC) and ABS-CBN Broadcasting Corp.

Consolidated revenues reached P2.02 billion in 2002, up by 14 percent from the previous year’s P1.78 billion.

Costs and expenses amounted to P3.19 billion as against P11.77 billion in 2001 due to provision for estimated liabilities from guarantee and commitments amounting to P6.36 billion.

In spite of head-to-head competition, ABS-CBN managed to maintain its lead over rival GMA-7.

However, ABS-CBN’s net income fell 88 percent last year to P166 million, weighed down by higher operating and depreciation and amortization expenses.

Intense competition domestically drove operating expenses 18 percent higher in 2002 as the company increased the amount of original programming instead of increasing its replay pattern as is customary in a weak advertising market. Depreciation and amortization expenses also increased with the full-year impact of new broadcast facilities at the Eugenio Lopez Jr. Communications Center.

The 2002 profit is net of P272 million in non-recurring charges which the company recognized as it wrote off investments in subsidiaries that ceased operations in 2002. Last September, ABS-CBN successfully converted a substantial majority of its short-term loans into a long-term secured facility.

However, revenues from affiliated businesses grew in 2002, mainly due to the continuing expansion of ABS-CBN Global to foreign markets.

FPHC’s 2002 consolidated net income amounted to P1,958 million, lower by 49 percent from the year earlier. FPHC’s net income, retained earnings and stockholders’ equity for 2002 would have decreased by a further P5 billion had its affiliate Manila Electric Co. (Meralco) provided for estimated losses resulting from a Supreme Court decision ordering Meralco to refund its customers P0.617 per kilowatt-hour.

In spite of the one-time gain on dilution of equity interest booked in 2001, FPHC’s 2002 consolidated revenues increased by 32 percent compared to year-ago levels as revenues from the sale of electricity rose by P8.111 million. This increase in the sale of electricity was due to the improvement in the dispatch of FirstGen’s Sta. Rita gas-power plant averaging 60 percent to 65 percent in 2002 from only 12 percent in 2001 as well as the start of commercial operations of FirstGen’s San Lorenzo plant in October 2002.

As for its telecommunications business, Bayan Telecommunications Holding Corp. (BTHC) posted a net loss of P5.335 billion, mainly due to huge debt.

It continues to accrue interest expenses at the contracted rates while its restructuring negotiations on $417 million and P2,990 million of debts are ongoing.

On Jan. 8, 2003, Benpres failed to settle $165 million in obligations arising from its suretyship over convertible preferred shares issued by BTHC.

As of end-December last year, Benpres had $508 million and P4.218 billion in direct and contingent obligations. These direct and contingent obligations were reduced from their balances as of December 2001 due to repayment by Maynilad of some of its obligations guaranteed by Benpres.