Lopez Holdings profit drops 69% to P4.1B

MANILA, Philippines - Lopez Holdings Corp. reported a net income of P4.1 billion in the first nine months of the year, down 69 percent from P13.035 billion recorded in the same period in 2010 which included huge gains on the sale of shares in Manila Electric Co. (Meralco).

In a financial report submitted to securities regulators, Lopez Holdings said consolidated revenues fell 15 percent to P21.125 billion from P24.74 billion on account of lower earnings from ABS-CBN Corp. given the absence of election-related advertising.

ABS-CBN posted a net profit of P2.24 billion or a decrease of 26 percent from the year-earlier level.

Equity in net earnings of associates for the period amounted to P888 million, 92 percent lower than the previous level. The amount represents Lopez Holdings’ share in the net income of First Philippine Holdings (FPH) due to the recognition of impairment loss on the Northern Negros Geothermal Power Plant (NNGP).

FPH posted a net profit of P668 million, primarily due to the recognition of an impairment loss by subsidiary First Gen Corp. on the NNGP. The P25.46 billion attributable net income reported in the first nine months of 2010 included its gain on sale of Meralco shares.

The successful tender offer of Lopez Holdings in August 2011 for some $42 million in unrestructured debt cushioned the impact of relatively weaker financial results of investees for the nine-month period.

Lopez Holdings recorded P2.1 billion as reversal of accrued interest on debt, following the acceptance of tenders for 82 percent of the targeted amount. It offered to buy back approximately $41 million in unrestructured obligations at par value.

“With the success of our tender offer, Lopez Holdings looks forward to normal operations and should be better able to provide support to investees in the coming years,” said company president Salvador G. Tirona.