Lopez Holdings Corporation improved its year-on-year performance in 2015, spurred by solid contributions from its major investees.
Your company reported P6.191 billion in net income attributable to equity holders of the Parent for the year 2015. We received P803 million in cash dividends from conglomerates First Philippine Holdings Corporation (FPH) and ABS-CBN Corporation (ABS-CBN). In the same year, we paid out P463 million in cash dividends to shareholders. This was the fifth consecutive year that your company paid cash dividends.
ABS-CBN expanded its reach to more viewers, not only by pioneering the distribution of digital terrestrial television or DTT service called ABS-CBN TVplus, but also by maintaining its dominance in the national television ratings. Nineteen of the top 20 programs of 2015 were shown on the Kapamilya network.
O n the FPH side, the steady build of new gas-fired power plants through First Gen Corporation expanded not only its asset base, but also the future energy sources of the country, which achieved an average growth of 6.2% in terms of GDP (gross domestic product) from 2010 to 2015, the highest since the late 1970s. The country’s need for clean, reliable and affordable electricity drives the work that First Gen does. Its associate, Energy Development Corporation continues its focus on renewable energy.
S till under FPH, the property development group is also expanding its reach. First Philippine Industrial Park has newly available land for sale and Rockwell Land Corporation is simultaneously looking at hotel and resorts as well as mass housing for enhanced coverage of new geographic and economic markets.
At the parent level, your company completed the sale of its equity in Bayan Telecommunications, Inc. (Bayan), together with those held by Bayan Telecommunications Holdings Corporation. Our Bayan shares were jointly sold to Globe Telecom, Inc. after the National Telecommunications Commission approved the conversion of Bayan debt into equity, giving control of Bayan to Globe, as resolved by the Rehabilitation Court since way back in 2013. This allowed us to partially recover impairment losses, net of related expenses, of P1.8 billion from our 20-year journey with Bayan, in which Lopez Holdings invested at least P10 billion.
Notwithstanding the financial losses suffered by Bayan, which were largely attributable to the catastrophic peso devaluation in 1997-2000, we marvel at the customer-centric and service-oriented organization that we established, which endeared it to its customers in its areas of operation. As a maverick fixed line and data services provider, Bayan gained loyal subscribers over the years, attracted by its strong work ethic, unparalleled customer service and innovative market offerings like the money-back and 24-hour installation guarantees.
ABS-CBN has always had the same kind of superior customer-focused philosophy, and is expanding it to its new endeavors such as ABS-CBNmobile and Kidzania. It is the same philosophy that has guided SKY Cable Corporation over the last 25 years as the pioneer cable TV service provider in the country. The primacy of customer delight is what led to innovations like the SKY concierge, or a personalized customer service associate for top tier subscribers, and SKY Broadband, the cost-efficient high-speed internet service for retail consumers.
Proceeds from the sale of Bayan were used to buy FPH shares from the market to take advantage of low prices in August to September 2015, to fund a special separation package that reduced the parent’s workforce by a quarter, and in part to fund the regular cash dividend for 2016.
Lopez Holdings looks forward to pursuing sustainable initiatives that not only add value to shareholders, but also serve the needs of the nation. Power, infrastructure, manufacturing and property development projects under FPH support a growing economy, industry and commerce, and an upwardly mobile customer base. Multi-platform communication, experiential and media initiatives under ABS-CBN deliver information, education, and entertainment, as well as stronger connections between Filipinos at home and overseas. We hope to continue expanding our reach to serve more customers in better ways.
As at December 31, 2015, your company had direct obligations of US$10 million in restructured notes and P1.2 billion in short-term loans.
To date, Lopez Holdings owns 46% of FPH and P56% economic interest in ABS-CBN.
Thank you for keeping faith with your management team.
Salvador G. Tirona
President, Chief Operating Officer and Chief Finance Officer