First Holdings sees slight growth in 2009

First Philippine Holdings Corp. (FPHC), the holding firm for the power and manufacturing businesses of the Lopez family, said it expects slight growth for 2009 as it sees tougher times ahead.

“We’re calibrating growth targets. It’s going to be a tough year next year. Growth might even be flat,” said Elpidio Ibanez, president of FPHC.

In the nine months ending September this year, FPHC’s net income dropped 61 percent to P3.639 billion from P9.364 billion in the same period a year ago as foreign exchange losses, higher costs and expenses offset higher revenues.

FPHC booked P7.1 billion in foreign exchange losses (P6 billion coming from newly acquired geothermal unit EDC) as against a P731 million foreign exchange gain recorded last year. Finance charges nearly doubled to P8.1 billion, largely due to new loans obtained.

After prepaying around $20 million in loans, FPHC is studying the possibility of tapping the debt market again in 2009 to fund loans maturing in 2010.

However, Ibanez said the planned borrowing is subject to favorable market conditions, pointing out that the company has sufficient cash at the moment to service its debts.

FPHC, 43.15 percent-owned by Benpres Holdings Corp., made amortization and interest payments for its $35-million term notes due in 2011. Its plan is to partially repay and refinance its outstanding debts worth around P1.5 billion.

Ibanez earlier said the company was aiming to reduce debt by $100 million in the next two years, using proceeds from asset sales. The company recently sold its stake in Manila North Tollways Corp. (MNTC), the operator of the North Luzon Expressway, to Metro Pacific Investments Corp. It will receive P6.2 billion from the sale.

Apart from trimming debt, FPHC might use proceeds from the asset disposition to fund itsjoint venture through First Philec Electric Corp. with SunPower Manufacturing Ltd.The venture operates a wafer-slicing plant at the First Philippine Industrial Park in Batangas that services the growing solar energy industry.

First Philec is the holding company of the manufacturing businesses of First Holdings, while SPML is a subsidiary of solar technology provider SunPower Corp. of the United States.