Lopez Holdings



Report of Lopez Holdings' President, Chief Operating Officer & Chief Finance Officer, Salvador G. Tirona at the 2015 Annual Stockholders’ Meeting

Good morning, fellow shareholders and Kapamilya!

For the year ended December 31, 2014, Lopez Holdings Corporation and its associates achieved good numbers. We continue to lay the groundwork for a sustainable future.

Your company reported P3.760 billion in net income attributable to equity holders of the Parent for the year 2014. This is 94% higher than the P1.943 billion in net income attributable to equity holders of the Parent recorded in 2013. A primary factor for the increase was a one-time booking of a P2.052 billion reversal of impairment of Northern Negros Geothermal Plants (NNPG) assets in 2014.

The consolidated revenues increased by 7% to P100.654 billion from P94.269 billion, as FPH subsidiaries contributed to higher revenues in 2014. Meantime, equity in net earnings of associates which represents primarily the company’s economic interest in ABS-CBN held through Lopez, Inc. surged by about 11% for the year ended 2014.

For the first quarter of 2015, your company reported P1.095 billion in net income attributable to equity holders of the Parent. This is 25% higher than the P877 million in net income attributable to equity holders of the Parent reported for the same period last year. This was primarily due to the solid performance of business units associated with First Philippine Holdings Corporation (FPH) and the 6% increase in ABS-CBN’s net income for the period.

Lopez Holdings’ total consolidated assets grew to P338.724 billion in 2014 from P305.942 billion in 2013. This figure mainly includes assets of FPH. Debt-to-equity ratio was at 3.88 x in 2014 versus 3.73x in 2013 . On the other hand, book value per share was up at P10.63 a share at the end of 2014 from a value of P9.75 a share in 2013.

It is also worthy to note that Lopez Holdings’ total consolidated assets as of March 31, 2015 grew to P357.06 billion from P338.72 billion as of December 2014. On the other hand, long-term interest bearing loans and borrowings stood at P152.67 billion as of the end of the first quarter of 2015 from P143.16 billion as of the end of 2014.

On a stand alone Parent Company’s financial position accounted for at equity method, Lopez Holdings total assets as of March 31, 2015 stood at P45.82 billion. It is composed of Current assets which is mainly cash and cash equivalents and Noncurrent assets representing our carrying value of investments in ABS-CBN and First Philippine Holdings.

Total equity attributable to Parent stood at P43.36 billion as of March 31, 2015.

In 2014, we received P801 million in cash dividends from our major investees, 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 marked the fourth consecutive year that your company paid cash dividends since the completion of its major debt restructuring in 2010.

Investments made in the last three to four years have borne fruit. Energy Development Corporation (EDC), which persevered in seeking a proper, long-term solution to rehabilitate the BacMan geothermal power plants, saw all three units working at capacity and significantly, increasing availability and reliability. Equally important, EDC’s wind power project in Burgos, Ilocos Norte, was completed on schedule in November 2014.

ABS-CBN Digital Terrestrial Television (DTT), which locally tested both the European and the Japanese standards for DTT for several years, became first to market the innovation as ABS-CBN TV Plus earlier this year.

As investors recognized the potential of the FPH group and ABS-CBN for further growth, their stock prices, and consequently ours, rose and outperformed the market. While the Philippine Stock Exchange Index (PSEi) improved by only 23% over the 2013 level, both FPH and Lopez Holdings share prices advanced by two-thirds or 67% during the same period. On the other hand, share prices of First Gen Corporation almost doubled at 95% in value while those of EDC went up by 54% year-on-year.

Over the period end-2010 to end-2014, Lopez Holdings’ stock price gained 26% while the PSEi gained 72%. This shows that despite the recent run-up in share prices, the company and its associates remain to be significantly undervalued vis-à-vis the market.

Investments continue at the level of FPH group and ABS-CBN.

In 2014, First Gen Corporation broke ground on San Gabriel, a combined-cycle, natural gas-fired power plant which will cost US$600 million. It also committed another US$150 million for Avion, a fast-track open cycle natural gas-fired power plant. Avion will be able to run on natural gas or liquid fuel.

The property investments of FPH are also busy with expansion. First Philippine Industrial Park continues to grow its land bank. As premium provider of land, infrastructure and services for light industry, it is increasing its recurring revenue base by offering more ready-built factories. Meanwhile, Rockwell Land Corporation signed last December 2014 an agreement to purchase control of the remaining portion of the Tribeca development in Muntinlupa City.  This will become Primaries South, consisting of 6.5 hectares of land, and makes the Rockwell brand which is known for quality development, available to a new market segment.

Other than TV Plus, ABS-CBN continues to work on its new businesses, including ABS-CBN mobile and Kidzania, an educational park for children that will open soon at the Bonifacio Global City. Meantime, Sky Cable Corporation is studying the market for the roll-out of direct-to-home (DTH) services with the aim of reaching areas too expensive to cable and providing more consumers the opportunity to experience Sky Cable’s vast program line-up.

As for Bayan Telecommunications, Inc. (Bayan), Globe Telecom, Inc. remains 38% owner of the company as of year end-2014, through the conversion of a portion of its debt into equity done in the previous year. The Amended Rehabilitation Plan, filed jointly by Bayan and Globe, was approved by the Court in 2013. Meantime, Globe is prepared to convert further its remaining debt into equity and awaits the decision of the National Telecommunications Commission (NTC) on the proposed additional conversion as this will result in a change of control of Bayan. Once approved, this will finally complete the financial rehabilitation of Bayan which started in 2004 and will ensure the uninterrupted service to its customers.

Our obligations remain manageable, and we continue to provide support to our associates as they pursue sustainable strategic initiatives aligned with our mission to improve the lives of our fellow Filipinos.

As at December 31, 2014, your company had direct obligations of US$23 million in restructured notes and P1.13 billion in short-term loans.

To date, Lopez Holdings owns 46% of FPH and 56% of ABS-CBN. These investees provide genuine service to our customers around the globe. They are the main vehicles for our investments in our country and in the communities in which we operate. We are proud of their track record and fully support their aspirations for sustainable growth.

Thank you for keeping faith in your company and with your management team.


Mailing List

Please enter your email address to join our mailing list and receive our corporate updates.


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