Belle Corp. released its tentative 1999 financial results yesterday, disclosing a staggering net loss of P3.3 billion after posting net profits of P104 million in 1998 and P1.2 billion in 1997. This was the first net loss posted by Belle since the company re-emerged as an investment holding company in 1989.
In a disclosure to the Securities and Exchange Commission (SEC), the company said that Belle's share in net losses of its unconsolidated subsidiaries totalled P1.1 billion, mainly comprised of Belle's share in losses of APC (P799 million) and Sinophil (P254 million).
APCs net loss for 1999 of P1.4 was primarily due to investment write-offs and loss provisions totalling P1.3 billion, as follows: P855 million in losses from investments in Pilipino Telephone Corp. (Piltel) made in 1997; a P346 million net loss at APC's largest investment, Philippine Global Communications (Philcom), which was made in 1996; a P171-million loss provision for an investment in PICOP Resources Inc. made in 1996; and a P23-million loss provision for an investment in First Asian Industrial Equities Inc.
Sinophil incurred a 1999 net loss of P714 million, caused mainly by: P281 million in goodwill amortizations attributed to its investments in Legend International Resorts (HK) Ltd. (LIR) and MagiNet Corp. , both of which were made in 1997; its 40-percent share of LIR's net loss, which amounted to approximately P344 million.
A loss provision of P1.1 billion for land development costs in the Belle Bay Plaza project, which Belle's management had to put on hold in 1998 due to lack of capital and the prevailing poor economic environment.
Belle also reported P715 million in interest expenses, which predominantly arose from loans incurred in 1997. In addition, the company was hit with a foreign exchange loss of P79 million related to about $150 million in dollar-denominated floating rate notes (FRNs) incurred in 1997.
Belle, when contacted by newsmen, said that this huge loss was caused by write-offs on various investments during the tenure of Jaime Gonzalez as chairman of the board and Roberto V. Ongpin as chairman of the executive committee.