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2009 Goals: Half-Year Review
| FIRST PACIFIC |
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Goal: Enhance the profitability of operating companies, in particular continue to improve the profitability of MPIC and of PLDT
Achievement: Achieved. Recurring profit slightly increased to US$127.4 million from US$126.5 million. MPIC's operational performance was strong across its three businesses, PLDT sustained growth, and whilst Indofood was adversely impacted by lower commodity prices, strong performance in its other businesses partially offset this impact. Philex suffered from lower commodity prices and slightly reduced ore milled as demand declined. |
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Goal: Manage the projected profitability of Indofood given the downturn in the CPO prices which will impact the profitability of Agribusiness
Achievement: Ongoing. The business development, particularly in the Consumer Branded Products division, has broadened the portfolio and thus together with improved performance generally reduced the impact from the significant downturn in the Agribusiness. |
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Goal: Continue to evaluate complementary investment opportunities in telecoms, infrastructure, consumer products and natural resources in the emerging markets of Asia
Achievement: Ongoing. First Pacific continues to review mining opportunities given that there are significant mining reserves and a more favorable regulatory environment in the Philippines; MPIC continues to study other water distribution concessions and enhancements to its tollroad portfolio along with other infrastructure opportunities. PLDT through Piltel completed its investment in Meralco in July. MPIC plans to complete its investment in Meralco by October 2009 and intends to acquire further shares in Meralco when opportunities arise. |
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Goal: Manage capital within the Group's financial resources and its overall investment plans to enhance shareholder returns
Achievement: Ongoing. First Pacific share price up 65% while the Hang Seng Index increased 28% during the period. The Board has declared an interim cash dividend of HK4.00 cents (U.S. 0.51 cent) per ordinary share, an increase of 33% over the previous period. |
| PLDT |
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Goal: Sustain wireless and broadband growth momentum
Achievement: Achieved and ongoing. Combined 2G/3G subscriber bases of Smart and Piltel grew 16% year-on-year to 38.5 million. Total broadband subscribers – DSL fixed and wireless - grew 26% to over a million. PLDT Group consolidated service revenues increased 4% to Pesos 72.9 billion (US$1,516.9 million) from Pesos 70.3 billion (US$1,662.7 million) the previous period. |
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Goal: Manage transformation to next generation network
Achievement: Ongoing. The transformation of PLDT fixed line network to the all-IP next generation network (NGN) from the traditional circuit-switched network continues, comprises both internal and outside plant facilities, align internal processes and human resources-related initiatives. The full migration to NGN is expected by 2012. |
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Goal: Achieve improved operating results from ePLDT
Achievement: Achieved and ongoing. Service revenues increased 5% to Pesos 5.2 billion (US$108.2 million) from Pesos 5.0 billion (US$118.3 million), while EBITDA margin was stable at 10% compared to the same period last year. |
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Goal: Conclude Piltel's proposed acquisition of a 20% interest in Manila Electric Company
Achievement: Achieved. The acquisition was completed on 14 July 2009 when Piltel fully paid Pesos 20.1 billion (US$417.6 million) for the 20% stake in Meralco. Three nominees from the group were elected to Meralco's board at Meralco Annual General Meeting held on 26 May 2009. The CFO of Meralco nominated by the group assumed the position on 1 July 2009. |
| METRO PACIFIC INVESTMENTS CORPORATION (MPIC) |
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Goal: Conclude the proposed acquisition of a 10.17% interest in Manila Electric Company and play a key role in improving the financial performance of Meralco
Achievement: Ongoing. MPIC has agreed to acquire 12.96% interest in Meralco from the Beneficial Trust Fund (BTF) of PLDT and Crogan Limited (a wholly-owned subsidiary of First Pacific) for a total consideration of Pesos 18.2 billion (US$379.0 million) through a combination of cash and new shares of MPIC. This investment is expected to be completed by October 2009 and MPIC intends to acquire further shares in Meralco when opportunities arise. |
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Goal: Further enhance profitability of Maynilad and NLEX through capex and marketing initiatives
Achievement: Achieved and ongoing. Contributions from Maynilad increased 16 times to Pesos 423 million (US$8.8 million) while NLEX contributed Pesos 680 million (US$14.1 million). The capital expenditure at Maynilad for the period was Pesos 3,337 million (US$69.4 million). Traffic volume on NLEX improved by 5%. |
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Goal: Expand tollroad portfolio principally through the NLEX expansion options and make further strategic acquisitions as opportunities arise
Achievement: Ongoing. The construction of Segment 8.1 (link Mindanao Avenue to NLEX) commenced in April 2009 and is expected to be completed by April 2010. The construction of Segment 9 (link NLEX to MacArthur Highway) and Segment 10 (link NLEX to the Port Area and C3) is expected to start in late 2010 or early 2011. In February 2009, MPTC signed a memorandum of understanding with the Philippine National Railways to build the Skyway Connector to connect the NLEX and the South Luzon Expressway. |
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Goal: Expand healthcare portfolio through organic growth and acquisition
Achievement: Achieved and ongoing. Contributions from the healthcare businesses increased 105% to Pesos 76 million (US$1.6 million). In addition to the investments in MDI & DDH, MDI, through a wholly-owned subsidiary Colinas Verdes Hospital Managers Corp. (CVHMC), secured the 20-year contract to operate Cardinal Santos Medical Center (CSMC). |
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Goal: Increase the liquidity/free float to a minimum of 20% of the issued share capital
Achievement: Ongoing. MPIC wishes to see a higher float. With its growth and acquisition plans, MPIC is actively considering raising equity. |
| INDOFOOD |
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Goal: Further improve operational and cost efficiencies
Achievement: Ongoing. Consolidated net sales decreased 4% to Rupiah 18.2 trillion (US$1,652.9 million) from Rupiah 18.9 trillion (US$2,044.8 million) reflecting lower sales in Agribusiness division resulting mainly from significantly lower average CPO prices. Despite the significant impact of lower CPO prices, gross profit margin increased marginally to 26.7% from 26.4% reflecting lower raw material costs. |
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Goal: Maintain market leadership position through product innovation and focused advertising and promotion programs, as well as increasing distribution penetration
Achievement: Achieved and ongoing. The principal business units continued to maintain their market leadership positions and some remain as "Top of Mind" brands. New products for noodles, pasta, biscuit and snack units were launched during the period. |
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Goal: Develop key account team to manage all group products
Achievement: Ongoing. Established the Food Service team to serve the key account customers in the food industry, offering all Indofood products. |
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Goal: Continue the integration of IndoAgri and Lonsum's operations
Achievement: Ongoing. Key organizational and operational areas are being addressed, comprising overhead reduction, alignment of IT system, joint purchasing and developing infrastructure. |
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Goal: Preserve cash by tightening cash flow management and prioritizing capital expenditure
Achievement: Ongoing. Agribusiness group slowed down its new planting program. |
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Goal: Refinance short-term debts to longer term facilities
Achievement: Partially achieved and ongoing. In June 2009, Indofood issued a Rupiah 1.61 trillion (US$157 million) bond due in June 2014 to refinance a Rupiah 1 trillion (US$98 million) bond due in July 2009 and other short-term debts.
SIMP, a subsidiary of IndoAgri, is in the process of the issuance of a Rupiah 1 trillion (US$98 million) 5-year bond to refinance IndoAgri's short-term debt. |
| PHILEX |
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Goal: Maintain production of approximately 9 million tonnes of ore
Achievement: Ongoing. Total ore milled in the first half amounted to 4.0 million tonnes. |
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Goal: Allocate additional resources to advance the Silangan Project
Achievement: Ongoing. A total of 7,717 meters in 12 holes were completed in continuation of the ongoing in-fill drilling program for the Bayugo as per schedule. |
Goals for 2009
| FIRST PACIFIC |
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Enhance the profitability of operating companies, in particular continue to improve the profitability of MPIC and of PLDT |
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Manage the projected profitability of Indofood given the downturn in the CPO prices which will impact the profitability of Agribusiness |
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Continue to evaluate complementary investment opportunities in telecoms, infrastructure, consumer products and natural resources in the emerging markets of Asia |
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Manage capital within the Group’s financial resources and its overall investment plans to enhance shareholder returns |
| PLDT |
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Sustain wireless and broadband growth momentum |
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Manage transformation to next generation network |
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Achieve improved operating results from ePLDT |
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Conclude Piltel’s proposed acquisition of a 20% interest in Manila Electric Company |
| METRO PACIFIC INVESTMENTS CORPORATION (MPIC) |
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Conclude the proposed acquisition of a 10.17% interest in Manila Electric Company and play a key role in improving the financial performance of Meralco |
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Further enhance profitability of Maynilad and NLEX through capex and marketing initiatives |
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Expand tollroad portfolio principally through the NLEX expansion options and make further strategic acquisitions as opportunities arise |
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Expand healthcare portfolio through organic growth and acquisition |
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Raise new equity from third party investors |
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Increase the liquidity/free float to a minimum of 20% of the issued share capital |
| INDOFOOD |
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Further improve operational and cost efficiencies |
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Maintain market leadership position through product innovation and focused advertising and promotion programs, as well as increasing distribution penetration |
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Develop key account team to manage all group products |
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Continue the integration of IndoAgri and Lonsum's operations |
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Preserve cash by tightening cash flow management and prioritizing capital expenditure |
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Refinance short-term debts to longer term facilities |
| PHILEX |
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Maintain production of approximately 9 million tons of ore |
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Allocate additional resources to advance the Boyongan Copper–Gold Project |
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