Lopez Holdings

investor relations banner 2017

2016 Report of the President, COO and CFO

Fellow shareholders:

Lopez Holdings Corporation benefited from the stellar performance of its major investees in 2016, amid challenging industry dynamics brought about by increased competition and regulation.

Your company reported P6.557 billion in net income attributable to equity holders of the Parent for the year 2016. We received P900 million in cash dividends from First Philippine Holdings Corporation (FPH) and ABS-CBN Corporation (ABS-CBN) and other financial assets. In the same year, we paid out P924 million in cash dividends to shareholders, the sixth consecutive year of cash payouts.

ABS-CBN continued its transformation into a digital company, offering a host of original content on TV, cable, mobile and the internet. This multi-platform approach was developed
over several years to respond to the needs of new audiences, especially the youth whose millennial lifestyles have increasingly shifted to on-demand viewing, instead of scheduled
programming. ABS-CBN is making good on its commitment to be there for its audiences, to inform, entertain, inspire and connect them to their loved ones all over the globe.

On the FPH side, its power holding company, First Gen Corporation (FGEN) completed two new natural gas-fired plants and began selling to the grid in 2016. Adding a total of
511 MW in power generating capacity, FGEN is in good position to respond to the expected rise in energy demand, while still being able to contribute to cleaner air.

Natural gas is among the cleanest fossil fuels, and is an ideal bridge fuel while renewable energy prices are not yet at parity with the rest of the grid. For this reason, FGEN continues to work toward establishing a liquefied natural gas terminal in its Clean Energy Complex in Batangas. And any future expansion of its generating capacity will continue to use primarily natural gas, if not renewable sources of energy.

All our investees are ready to respond to our nation’s needs, as we tread the path to economic development, in ways that look to the needs of future Filipinos as well. Lopez Holdings and its investees have long committed to sustainable growth. We subscribe to the global movement for clean air, clean water, and resilient communities, which are turning out to be better ways to adapt to climate change. Actions like caring for the environment, educating the youth and reducing waste are not only socially responsible, but also financially prudent in the long term.

FPH will remain focused on growing all its investments in the same manner as it is growing its energy portfolio. Property development through Rockwell Land Corporation and First Philippine Industria Park, and manufacturing through First Philec Corporation will continue to abide by international standards in environment, safetyand health, as well as in quality management, not only as part of our enterprise-wide risk management system, but also as our contribution to the millennium development goals to which our foundations are aligned.

ABS-CBN will continue to explore ways to serve its growing local and international audiences through evidence-based research that allows it to listen well and respond to demand in a timely manner. Business in the digital age happens quickly, but not easily. There are countless instances of ‘here today, gone tomorrow’ in the entertainment industry, but digital shortens the day to hours, if not minutes. The ‘man of the hour’ could be the next minute’s has-been. For this reason, talent development is a continuous process to increase our pool of content creators, including actors, directors, writers, news reporters,  cameramen, sound and image editors, and other production crew. Even veteran artists and news anchors have the opportunity to learn and expand their horizons with ABS-CBN University, an internal educational endeavor to help our workforce adapt to business in the digital setting.

Lopez Holdings is stepping up to the needs of the moment in better ways. Its resources, as well as those of investees, will support sustainable development to create long-term value for shareholders and other stakeholders.

As at December 31, 2016, your company had remaining direct obligations of US$5 million in restructured notes.

To date, Lopez Holdings owns 46% of FPH and 56% of ABS-CBN.

Thank you for keeping faith with your management team.

Frame-Salvador Tirona
Salvador G. Tirona
President, Chief Operating Officer and Chief Finance Officer

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Lopez Holdings Corporation (formerly Benpres Holdings Corporation)
4/F Benpres Building, Exchange Road, 1605 Pasig City, Philippines

  • Trunkline: (632) 449-2345
  • Fax: (632) 634-3009