IF foreigners base on profitability their choice of listed stocks in
which to invest their dollars, then they would probably place Ayala
Corp. (AC) at the top of their list.
It is consistent profitability that enabled AC to pile up surplus of
P92.37 billion as of September 30, 2013. Filipino investors similarly
measure companies by their audited financial reports and find the
Zobel-controlled AC being among the more reliable.
Incidentally, AC happened to be one of the seven holding companies
listed on the Philippine Stock Exchange included in Due Diligencer’s
choices. If the previous piece took up their retained earnings as of
September 30, 2013, this one would show how they have accumulated their
surpluses.
However, Alliance Global Group Inc. (AGI) and AC registered the
biggest profit increases. AGI had a nine-month net profit of P19.16
billion, up a huge 42.35 percent, or P5.70 billion from P13.46 billion,
while AC’s net income surged 24.92 percent, equivalent to P3.75 billion
in peso term, to P18.80 billion from P15.05 billion in the same period
in 2012.
Of the seven, three reported smaller but billion-profit increases in
the first three quarters of 2013. San Miguel Corp.’s net income dropped
31.21 percent, or P8.02 billion to P17.68 billion from P25.70 billion,
while that of JG Summit Holdings Inc. of businessman John Gokongwei Jr.
declined 13.97 percent, or P2.126 billion to P13.30 billion from P15.46
billion. Aboitiz Equity Inc., on the other hand, reported a net profit
of P20.23 billion, down 10.88 percent, or P2.37 billion from P22.70
billion.
The numbers shown in the table should tell us consumers where our
money went in 2012 and 2013, and how much more those who could well
afford to buy their products spent last year. But these companies never
told us how they made more revenues last year than in 2012. Could it be
because they charged us more for the same products they sold us? That
is, the price increases generated more money, which meant bigger profits
and more dividends for their stockholders. Was it also possible that
they produced more and sold more in 2013 but at 2012 prices? This, of
course, would be impossible. Business operates for profits. The more
money it makes, the better.
As the total shows, the seven of 40 or so listed holding companies
needed only P10.86 billion for their combined revenues to hit a
trillion, an amount which you and I would have difficulty counting. Yet,
we would well understand how much P989.14 billion should mean to big
business that had it so good in 2012 and 2013: the more revenues that we
contribute to their cash registers the bigger their profits that would
accrue to retained earnings, which, in turn, would be distributed as
dividend either in cash or in stock.
esdperez@gmail.com
source: Manila Times Column of EMETERIO SD. PEREZ
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