IPVG's first quarter net income down slightly to P35 million

MANILA, Philippines – Listed information technology and gaming firm IPVG Corp. said gross earnings in the first quarter this year dropped 25.5 percent to P35 million even as revenues grew eight percent to P359 million.

In a statement, Enrique Gonzalez, chief executive officer of IPVG, said the first quarter results were encouraging given the challenging business environment. 

He said the company is expected to rise above the financial crisis that has slowed down economic growth.   “IPVG will emerge from 2009 as a stronger company by growing organically our top line, maintaining profitability through improvements in our operating performance, reducing our gearing ratio, and strengthening our cash position by sale of non-core assets.” Last year, IPVG incurred a net loss of P112.3 million, a reversal of the P137.5 million profit reported in 2007. The 2008 figure includes other charges of around P97 million. Consolidated revenues nearly doubled to P1.6 billion while gross earnings declined 63 percent to P56.9 million.

 “2008 was a very challenging year for IPVG and for many businesses worldwide.

We were not immune from the fallout of the financial crisis, especially with much of our planned expansion focused on the financial services sector in the US,” Gonzalez said.

“During 2008 we set out to integrate our US acquisitions and to sharpe their business focus. This cost us more than we expected and, with the downturn in business confidence, lead to an EBITDA (earnings before interest, taxes, deprecation and amortization) of P56.9 million which while good, was less than we had anticipated.”

Gonzalez, however, pointed out that the group’s operational performance has been solid last year with gross margins rising 71 percent while fixed expenses jumped 151 percent due to acquisitions.

“The major impact on our net profit was the decision to consolidate our call center assets, including our partial acquisition of Influent Teleservices Inc of the US, into a new company and in so doing reduce our ownership of Influent to 23.8 percent with an option to increase to 70 percent subject to certain conditions.This meant that from an accounting standpoint we were not able to consolidate Influent’s results”.”

Gonzalez said the group divested some of its assets to replenish its cash position which had been depleted due to a string of acquisitions made in the past years.