More deals push EEI earnings up 28% in 9 months

MANILA, Philippines - Yuchengco-led construction company EEI Corp. reported a 28 percent rise in its nine-month net income ending September 2011 to P581.53 million owing to increased construction deals and revenues from local construction contracts.

In a filing with securities regulators, EEI said consolidated revenues went up 25 percent to P6.69 billion.

Revenues from local construction contracts expanded 19 percent to P4.4 billion while revenues from services jumped 65 percent to P1.65 billion. The main contributor to this increase is EEI Corp. (Singapore) Pte. Ltd., a foreign subsidiary of EEI BVI Ltd.

On the other hand, merchandise sales fell 40 percent to P111.96 million, mainly due to a slowdown in local demand.

Revenues from the company’s overseas operations, most of which comes from the net income of Al Rushaid Construction Co. (ARCC), EEI’s 49 percent owned entity in the Kingdom of Saudi Arabia (KSA), surged 67 percent to P243.52 million in 2011.

Interest income dropped 10 percent to P41.97 million, largely due to reductions in short-term investments as excess cash is used for the continuous retooling and equipment re-fleeting program of EEI, with construction backlog increasing significantly.

As a result of the increase in production from local projects, cost of construction contracts grew 28 percent to P3.89 billion.

During the period under review, EEI bagged P9.62 billion worth of contracts. Among these include a deal to construct the Bangko Sentral ng Pilipinas branches in Zamboanga, Tacloban and Roxas cities; the 8 Forbestown project of Megaworld in Fort Bonifacio, Sun Residences Tower 2 of SM Development Corp. in Quezon City, and the Admiral Bay Suites project for Admiral Realty Co., Inc.

The total remaining un-worked portions of ongoing construction projects amounted to P11.4 billion as of Sept. 30, 2011.

The company is still constructing Berth 6 of the Manila International Container Terminal under a joint venture project with Hanjin Heavy Industries & Construction Co. Ltd. for global port operator International Container Terminal Services Inc. (ICTSI).

The ongoing projects of ARCC include the additional works for the Southern Area Flare System Upgrade Project for Saudi Aramco; the National Chevron Phillips Ethylene Plant North Plot Project under JGC Arabia; the Saudi Aramco Manifa Project in Manifa, KSA also under JGC Arabia; the 4 Samco Acrylic Project under Samsung and the Saudi Aramco Mobil Refinery Clean Fuels Project under Worley Parsons.

Outside Saudi Arabia, EEI is doing the carry-over works for the assembly of the piperack modules for Exxon Mobil Chemical Asia Pacific under Stone & Webster Asia Inc. for the Singapore Parallel Train Olefins Recovery Project at Jurong Island, Singapore; and the additional works for the Inco Goro Nickel Mining Project in New Caledonia. The remaining workable portions of these overseas contracts amount to P566.67 million.

EEI’s total consolidated assets stood at P9.78 billion as of the end of September this year, 24 percent higher than the 2010 level of P7.89 billion.

Total liabilities, on the other hand, amounted to P5.58 billion, 34 percent more than the P4.15 billion recorded the previous year due to increased bank loans to finance acquisition of various construction equipment for use in the newly awarded projects.