VistaREIT [VREIT 1.49] [link] declared a Q3/22 dividend of P0.0361, payable on December 19 to shareholders of record as of November 28. The dividend has an annualized yield of 9.69% based on the previous closing price, which is 0.05% larger than Q3's pre-dividend annualized yield of 9.69%. Relative to VREIT's IPO price, the dividend increased VREIT's total stock and dividend return to -10.73%, up from its pre-dividend total return of -12.8%.
MB Quick Take: VREIT is the new kid on the block, but it’s positive to see it post basically the same fat dividend for the second quarter in a row. VREIT is the REIT with the highest estimated yield, based on its current pricing, and it is one of the cheaper REITs on the PSE according to its price-to-distributable income multiple (10x). I’m not sure what it is about the offering that causes the market to “not trust” the income stream as much as its peers. Could be reliance on retail rents. Could be the blend of BPO office buildings. Could just be the name; Villar Family stocks have been absolute war crimes over the past couple of years. Thrice bitten, uh... four times shy.
Philippine Airlines [PAL 5.80 2.7%] [link] Q3 profit ballooned 182% y/y (31% q/q) to P4.1 billion from its Q3/21 net loss of P5.0 billion. 9M profit soared 131% y/y to P6.7 billion. 9M revenues increased 204% to P98 billion, while 9M expenses increased 100% to P86 billion.
MB Quick Take: PAL and its main domestic rival, Cebu Pacific [CEB 36.65 0.7%], are not in the same boat. CEB restructured with shareholders on the fly to survive the pandemic, while PAL went bankrupt and used the power of the court (and its owners deep pockets) to entirely recapitalize the airline and, most importantly, temporarily renegotiate its aircraft leases. Those sweetheart renegotiated terms (which charge PAL only for time in the air) expire in mid-2023. That’s when the fuller weight of PAL’s actual burden will be shouldered by its operating income.
Philippine Peso (P) [link] gained 1.4% versus the US Dollar over the weekend, with the exchange rate now standing at P57.21:$1 at the time of this writing.
MB Quick Take: Make no mistake, this huge movement in the exchange rate has nothing to do with whatever our country or the BSP might be doing, and everything to do with the inflation data in the US that has caused some to let down their guard at the hope that there is some light at the end of this rapid interest rate increase tunnel.
LT Group [LTG 8.74 1.0%] [link] Q3 profit slumped 19% y/y (44% q/q) to P5 billion. 9M profit up 105% y/y to P20 billion. LTG’s accompanying press release side-stepped the significant y/y and q/q decreases in LTG’s Q3 earnings, and instead focused on the 9M performance data. For the first nine months of 2022, LTG’s tobacco interests generated P12 billion in profit, banking generated P11.5 billion, liquor generated P0.86 billion, brewing generated P0.43 billion, and property development generated P0.34 billion. Using LTG’s H1 net income data for these business units, we are able to extract their Q3 performance and compare that to each unit’s H1 quarterly average. LTG’s tobacco business made P4.26 billion in Q3 (up 10%), banking made P0.35 billion (down 93%), liquor made P0.30 billion (up 7%), brewing made P0.14 billion (down 1%), and property development made P0.08 billion (down 38%).
MB Quick Take: I don’t normally follow LTG, so all of this is just “back of the envelope” work to just try to get a sense for what is happening behind that 9M headline. The standout to me is LTG’s banking subsidiary, Philippine National Bank [PNB 19.36 0.62%]. Its 9M profits are down 53% y/y because it made a bunch of money in 2021 selling assets, and those one-off gains are obviously not going to be a part of this year’s financial story, but even that loss hides an even weirder outcome, which is that PNB only appears to have made P0.35 billion in profit in Q3. LTG’s Q2 press release said that PNB accounted for P11.15 billion of net income in H1, and this Q3 press release says that PNB accounted for P11.5 billion of net income over the first nine months. I guess we’ll have to wait for the PNB earnings report to get a better idea why.
--