PSE Points to Ponder

ABS-CBN Corporation ( ABS ) has finally submitted its first half 2020 (1H 2020) results. The results showed that it has the financial strength to continue its operations. It has cash, cash equivalents, and short-term investments of 18 Billion Pesos as of end of 1H 2020 while debts due in the next 12 months is only 0.5 Billion Pesos. In the 1H 2020 it was able to generate cash from operations of 1.7 Billion Pesos which has been more than enough to service it debts. The losses of 3.2 Billion for the period 1H 2020 can be attributed to the inefficiency of a bigger organization (the administrative and general expenses/GAEX) with a smaller revenue stream. But this inefficiency is now being addressed. ABS has adopted and continues to implement cost control measures, reducing general and administrative expenses (GAEX) or overhead, rationalizing capital expenditures, and streamlining its manpower requirements. Given the reduced operations, ABS is reviewing its current business models, struc...

Cemex Holdings Philippines Inc. ( CHP ) in a press release has disclosed that it had reached an agreement to amend its debt covenant with BDO. The debt agreement amendment was meant to defer the compliance of certain financial covenants until June 30, 2021. It could be surmised from that disclosure that had the financial covenants not been amended CHP may have not complied that certain covenant. The COVID-19 pandemic may have worsen its operating and financial performance making it difficult to stay with the financial covenant with BDO. The stock rights offering at 1.54 per share have raised additional capital of 12.8 Billion Pesos to CHP but 7.9 Billion of the new capital raised were used to pay the parent CEMEX. It can be noted from CHP’s latest presentation that no additional funding from CEMEX was highlighted. Despite all the negatives, CHP has seen gradual rise. With the fundamentals so bad – negative free cash flows of 1.9 Billion Pesos and debt covenant amendme...