Combined earnings of listed firms up 23%

MANILA, Philippines - Combined earnings of all locally-listed firms climbed in the first quarter on strong performance of the retail, banking and infrastructure sectors.

Their profits are expected to increase further as companies take advantage of the favorable local economy, the Philippine Stock Exchange (PSE) said.

In a study, the PSE said net income of listed companies jumped 23 percent to P163.42 billion in the first quarter from P132.54 billion a year ago.

Total revenues picked up 15.4 percent to P1.21 trillion from P1.05 trillion last year.

The growth was led by the retail sector, banks, construction, infrastructure and allied services, and the media, PSE said.

“The phenomenal income performance of listed companies has been the main driver of the stock market’s growth this year while also providing a firm basis for investor optimism on the prospects for listed companies moving forward,” said PSE president and CEO Hans B. Sicat.

Combined earnings of retail firms surged 98.1 percent due to robust sales revenues and additional income provided by new store openings and acquisitions.

Profits of banks spiked 97.3 percent given higher gains from securities trading and interest income.

Listed firms that are into construction, infrastructure and allied services posted a combined profit growth of 70 percent as companies took on more infrastructure projects, PSE said.

“The recently concluded national elections also supplied a boost to media companies’ advertising revenues, enabling their incomes to rise by 56.6 percent during the same period,” PSE said.

Total earnings of holding firms and property companies jumped 37.8 percent and 24.9 percent, respectively.

However, industrial, service, and mining and oil sectors suffered from lower income in the first quarter.

PSE said consolidated income of industrial firms dropped 10.4 percent “due in large part to lower incomes reported from power companies.”

Increased costs and operating expenses dampened earnings of service companies, which posted a decline in its total income by 11 percent.

Combined profits of companies in the mining and oil sector sank 32.6 percent on “declining global nickel prices as well as the suspension of certain mining operations,” PSE said.

Moving forward, the PSE expects higher income for listed companies given robust economic growth.

“Looking at the bigger picture, the recent index setback is not equivalent to degrading the strong fundamentals,” Sicat said.

Since hitting the 31st all-time high this year at 7,392.20 on May 15, the benchmark PSE index sank to 5,971.05 yesterday as foreign investors shift their funds abroad.

“We believe our listed companies will remain resilient and will continue to find ways to take advantage of the favorable local macroeconomic environment,” Sicat said.