Lopez Holdings earns 19% higher at P13B

MANILA, Philippines - Lopez Holdings Corp., formerly Benpres Holdings Corp., said its net earnings rose 19 percent in the nine months ending September this year to P13.03 billion on the back of higher revenues of its core businesses and gain on the sale of some investments.

 In a financial report submitted to securities regulators, Lopez Holdings said consolidated revenues increased by 35 percent to P24.74 billion while equity in net earnings of associates grew more than three-fold to P10.97 billion following the completion of First Philippine Holdings Corp.’s sale of a 6.6 percent stake in power giant Manila Electric Co. in March.

In addition, Lopez Holdings recorded a P576 million gain on debt restructuring, representing a reversal of accrued interest expenses following the signing of a restructuring agreement in September.

The restructuring resulted in the re-classification of P1.059 billion in parent debt to long-term bond notes. As of Sept. 30, 2010, Lopez Holdings’ outstanding debt was P2.832 billion, lower than P3.013 billion in December last year.

Lower debt levels and interest rates also led to a 16 percent reduction in finance costs.

Foreign exchange adjustments resulted in a gain of P211 million instead of the comparative period’s foreign exchange loss of P248 million due to the faster appreciation of the peso in 2010. The peso appreciated to 43.88 per US dollar in September 2010 from 46.20 in December 2009, compared to an appreciation to 47.39 in September 2009 from 47.52 in December 2008.

Lopez Holdings said provision for losses was eliminated since guarantees and commitments from Bayantel were also settled in 2009.

Multi-media conglomerate ABS-CBN Broadcasting Corp. more than doubled its net earnings to P2.9 billion from only P1.35 billion as revenues expanded by 35 percent to P24.74 billion. Advertising revenues jumped 56 percent. Without political advertising revenues, ad revenues still increased by 37 percent to P14.59 billion.

FPHC, on the other hand, reported a net income of P25.49 billion in January to September 2010, more than three times the P7.81 billion recorded a year earlier.

Of the net income reported, P23.62 billion came from the sale of FPHC’s 6.6 percent stake in Meralco. Recurring net income for the period stood at P1.876 billion from P585 million. Growth was driven by higher equity in net earnings amounting to P3.015 billion from P2.058 billion in the comparative period.

During the period under review, Lopez Holdings received total dividends of P750 million from ABS-CBN and FPHC based on their 2009 audited net income. In addition, FPHC declared a regular cash dividend of P1 per share with record date on Nov. 19 and payment date on Dec. 15. Lopez Holdings expects to receive approximately P254 million from this declaration.

Lopez Holdings ended the period with consolidated assets of P68.22 billion, 26 percent higher than the previous level primarily due to the 62 percent surge in net investments in and advances to associates amounting to P28.057 billion. The increase in net investments in and advances to associates represent the company’s share in earnings of FPHC, resulting from its gain on the sale of Meralco shares.