Alliance Global posts 27% profit hike on McDonald’s purchase

Alliance Global Group Inc., an investment holding company owned by businessman George Yang, reported a 27-percent growth in net profit in the first quarter this year to P128.25 million from only P101.11 million in the same period last year.

In a financial report filed with securities regulators, Alliance Global attributed the improved performance to higher revenues with its newly-acquired service restaurant, McDonald’s, contributing P10 million to the bottom line.

Total revenues more than doubled to P2.32 billion from P909.97 million the previous level, mainly coming from the McDonald’s business.

The company’s food-and-beverage trading and distribution, however, experienced a five-percent reduction in sales as rising prices and currency rates influenced consumers’ spending attitude.

Total costs and expenses jumped to P2.17 billion from P797.39 million due to the rising costs of raw materials and fuel.

Alliance Global expects McDonald’s to contribute the biggest chunk of its revenues this year. Real estate activities are also expected to contribute additional revenues, particularly the Fort Bonifacio project.

The company intends to continue financing its ongoing real estate activities and capital expenditures from internally-generated funds. It raised P1 billion from a recent stock rights offering to raise funds for the acquisition of a 49-percent stake in Golden Arches, the Philippine franchise holder of the world’s leading hamburger chain McDonald’s Corp.

McDonald’s is the world’s largest and most popular food service retailer with more than 30,000 stores in over 100 countries, including 242 throughout the Philippines.

The investment is in line with Alliance Global’s strategic expansion of its food business as it expressed bullishness on the quick service restaurant industry’s prospects.

Alliance Global is the exclusive distributor of Campbell Soup Co.’s products and E&J Gallo Winery Inc. wines in the Philippines. It also handles the international marketing of McKester PikNik International Ltd.’s food products.

Aside from food products, Alliance Global also has interests in property development and glass manufacturing. It is a joint venture partner of the Bases Conversion Development Authority and Megaworld Corp. in the Mckinley Hill mixed-use project in Fort Bonifacio.