Global Equities reports slight drop in first semester profit

Investment holding company Global Equities Inc. (GEI) reported a 4.24-percent drop in its first half net income this year to P51.71 million, from P54 million in the same period a year earlier.

Based on financial statements filed at the Securities and Exchange Commission, the company said revenues likewise fell to P77.06 million, or by 13.33 percent from P88.91 million. Of the total, P76.12 million was a result of reversal of outstanding liability from land owners, leading to an undivided interest over the property of 80 percent for the parent company and 20 percent for the land owners.

Other revenues came from GEI’s manufacturing subsidiary, Adamson & Adamson Inc. (AAI), which sold about P6.8 million worth of products.

Expenses, however, dropped to P18.41 million from P34.19 million.

GEI said it is now in the process of completing the requirements of the conditional dacion-en-pago agreement with Equitable PCI Bank amounting to P116 million. Under the proposed agreement, the machineries and equipment of the cotton manufacturer would be transferred to the bank as payment for outstanding obligations.

The proposed transaction is expected to impact on the company’s financial position positively as interest burden on its bank loans will be substantially reduced, which has been depleting the firm’s resources in the past years.

AAI is one of the oldest and most established cotton brands in the country. Its principal absorbent cotton products are cotton rolls, balls, buds and sanitary napkins. Personal care products also include liniment, isopropyl alcohol and baby oil and powder.

As regards its remaining five-hectare property located at the NAIA, the company is in negotiation with its creditor-bank United Overseas Bank regarding its outstanding loan amounting to P231.5 million with the entry of a third-party investor on a straight sale basis.

GEI’s 70-percent equity interest in Mountain Ridge Executive Resort and Conference Center Inc. is currently the subject of a joint venture arrangement with Sta. Lucia Realty. This 16-hectare property has a mortgage with Rizal Commercial Banking Corp. in the amount of P70 million.

In the joint venture agreement, MRERCCI and Sta. Lucia will share 50/50 on the estimated sales proceeds ranging from P190 million to P280 million, with Sta. Lucia contributing the construction of the site development for the residential community.