Benpres nets P10.92 billion in January-September

MANILA, Philippines - Benpres Holdings Corp. sustained its profitability in the nine months ending September this year to P10.92 billion, a reversal of the P841-million loss recorded in the same period last year, mainly due to a lower debt level.

 In a financial report submitted to securities regulators, Benpres also said consolidated revenues grew 55 percent to P25.87 billion.

Benpres attributed the financial turnaround to the one-time gain of P7.5 billion from the settlement of debt, leaving the Lopez holding firm with an outstanding debt of just P3 billion, from P16 billion as of end-December last year.

On Aug. 21, Benpres bought back its own debt from Avenue Capital Group, in the principal amount of $252 million and P467 million at an overall price of 65 percent of face value. The purchase price was settled in full.

With the debt buyback, interest and other expenses-net was 16 percent lower during the period under review, Benpres said.

Benpres president Angel S. Ong said the significant reduction of the company’s debt augurs well for the publicly-listed conglomerate, which controls media giant ABS-CBN Broadcasting Corp. and First Philippine Holdings Corp. (FPHC).

“Lower debt levels mean the company is now poised to shift from a defensive position to a growth-oriented mode in support of the power group’s focus on developing clean and renewable energy sources, and ABS-CBN’s direction to expand its services and reach more Filipinos globally,” Ong said.

Aside from the debt repurchased from Avenue Capital Group, Benpres was also able to buy back $11 million and P173 million of its debt from other creditors during the period under review.

The higher net income is also largely due to the company’s share in earnings of FPHC, which rose due to the sale of its 20 percent ownership in Manila Electric Co. (Meralco) to Metro Pacific Investments Corp. Equity in net earnings of investees grew 14 times to P3.471 billion from P251 million.

Foreign exchange adjustments resulted in a loss of P248 million, down 81 percent from the P1.274 billion foreign exchange loss in the comparative period. The peso appreciated to 47.39 per dollar in September 2009 from 47.52 in December 2008, compared to a depreciation to 47.05 in September 2008 from 41.28 in December 2007.

Provisions for losses , however, surged 238 percent to P351 million from P104 million due to recognition of impairment in the company’s investment in Sky Cable, now consolidated by ABS-CBN.

FPHC posted a net income of P7.85 billion, a turnaround from the P156 million net loss recorded the previous level. Of the total income, P7.2 billion came from the sale of FPHC’s 20 percent stake in Meralco. Also contributing to net income was lower finance and other charges which declined year-on-year due to repayments of long-term debt.

ABS-CBN likewise reported a 12 percent growth in net profit to P1.35 billion from P1.2 billion. Similarly, earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 16 percent to P5.16 billion for an EBITDA margin of 28 percent. Consolidated revenues rose 11 percent to P18.34 billion.

Bayan Telecommunications, Inc. (Bayan) trimmed its net loss to P565 million from P2.57 billion, largely due to the peso depreciation. Benpres’ investment in Bayan has been fully written off. Thus, Benpres does not equitize income or loss from Bayan anymore.