Puregold [PGOLD 4.33] [link] teases FY22 net income of ?9.3 billion, up 13.5% y/y, on continuing consumer “momentum” which PGOLD attributes to “low unemployment, minimum wage hikes, robust OFW (overseas Filipino worker) remittances, and 100-percent resumption of face-to-face classes”. PGOLD noted 6.6% same store sales growth, which led to a 12.3% increase in consolidated net sales to P184.3 billion. PGOLD said that this was the 5th consecutive year of record earnings.
MB Quick Take: I might not love Lucio Co’s treatment of his shareholders, but I can’t argue with the performance of his companies. Yet, while PGOLD might be rocking its 5th straight year of record earnings, it’s hard to see that reflected in its stock price. Shareholders are likely wondering why the overall trend seems to be down down down. This time in 2018, PGOLD was trading for P52.50/share. A year later, it was P48/share. Then P39 in 2020. Then P38 in 2021.P35 in 2022. Today, it’s trading at P33/share, down 37% through those 5 years of record earnings.
Citicore Energy REIT [CREIT 2.51 0.8%] [link] FY22 net income of P1.25 billion, up 443% y/y. CREIT projected a 7.0% dividend yield based on its IPO price of P2.55/share, but it actually exceeded that projection a little by delivering a 7.1% yield. The company received approximately double the income that it expected from its variable leases.
MB Quick Take: This is a case where the headline doesn’t tell the story. CREIT’s FY21 net income was earned using an entirely different business model; about the only thing you can conclude by comparing these numbers is that it was probably a good idea to flip CREIT into a REIT and inject all those properties and assign CREIT all those leases. This isn’t a case where CREIT squeezed more profit out of the same system. The key comparison will be FY22 with FY23. None of that should take away from what was a great year for CREIT. It delivered on its REIT Plan projections, and even exceeded them in some cases.
Ayala Land [ALI 28.90 1.6%] [link] executed a block sale of 205 million shares of AREIT [AREIT 32.30 5.8%] at P32.10/share to raise a total of P6.6 billion. ALI did not name any of the buyers of the shares. ALI said that this transaction is related to its P22.5 billion property-for-shares swap with AREIT, but did not elaborate on that point. The P32.10/share price was at a 6.4% discount to the previous day’s closing price of P34.30/share.
MB Quick Take: I don’t know specifically, but I think ALI needs to sell AREIT shares in order to get enough shares out into the public float to avoid AREIT getting suspended after the property-for-shares swap completes and AREIT issues ALI a huge batch of new shares. According to the REIT Law, REITs need to maintain at least 33.3% public ownership level, which is considerably higher than the 20% required of other companies on the exchange.
Alternergy [ALTER 1.22 2.5%] [link] provided its first stabilization report, covering only its first day of trading. BDO Capital, ALTER’s stabilization agent, reported buying 10 million ALTER shares at P1.22/share on ALTER’s IPO day, March 24. BDO Capital has a stabilization budget of 115 million shares, so after last week, the fund was 9% depleted.
MB Quick Take: The volume on ALTER’s first day was actually 158 million shares, so the stab fund accounted for only about 6% of that total. BDO Cap did well to conserve dry powder for future battles, but since the stock has not traded above its IPO offer price for any significant period of time, it will be interesting to see how much of that powder remains dry by the end of this week. I estimate that they’ll have “spent” around 20 to 22 million of their 115 million share quota by the end of business on Friday.
--