Lopez Holdings income drops to P902M in January-March

MANILA, Philippines - Lopez Holdings Corp. said its reported first quarter income dropped 92 percent due mainly to a decline in the equity net earnings of its associate units.

In a statement, the investment holding company of the Lopez Group reported a net income of P902 million in the first quarter of the year, drastically lower than the P11.023 billion reported in the same period in 2010.

It attributed the decline in first quarter income to a drop in equity net earnings of associate units to only P261 million from P10.563 billion recorded in the same period last year.

Lopez Holdings explained that last year’s equity net earnings of associate units included gains from the sale of associate First Philippine Holdings Corp. (FPHC) of a 6.7-percent stake in power utility giant Manila Electric Co. (Meralco). The sale was completed in March 2010.

The 2010 first quarter net income also included a P767-million gain on the sale of Sky Cable Philippine Depositary Receipts (PDRs) by Lopez Holdings and ABS-CBN Corp.; P45-million gain on the sale of Lopez Holdings condominium unit and a P25-million gain on “extinguishment” of debt for debt bought back during the period.

Similarly, unaudited consolidated revenues decreased 15 percent year on year to P6.559 billion from P7.752 billion, dragged by a slow start for its broadcasting network, ABS-CBN.

The company said there was not enough political and advocacy advertising that boosted revenues in the first quarter of the year, unlike in 2010 – an election year. The network’s net income dropped to P976 million or 10 percent down year-on-year.

Nevertheless, Lopez Holdings president Salvador Tirona said the company is on track to matching last year’s performance.

 “The performance of investees was within expectations. ABS-CBN’s attributable net income would have increased by 12 percent year-on-year if we remove the effects of the gain on sale of Sky Cable PDRs and the P1.4 billion revenues from political and advocacy ads. This shows ABS-CBN is well on track to meet its 2011 target of at least equaling last year’s record performance. Meanwhile, FPHC’s power generating associate, First Gen Corp., is in investment mode, rehabilitating power plants that are expected to deliver key revenue streams in the medium term. The sale of electricity accounts for 82 percent of FPHC revenues,” Tirona said.

As of end-December 2010, Lopez Holdings held a 57.3-percent economic interest in ABS-CBN and 44.3 percent in FPHC.

Formerly Benpres Holdings Corp., Lopez Holdings was incorporated in 1993 by the Lopez family to serve as the holding company for investments in major development sectors.