the Outsider - PSE Points to Ponder

First Gen Corporation has completed the sale of a 60% stake in its natural gas business to Prime Infrastructure Capital Inc. for ₱50 billion , a landmark transaction that significantly strengthens the company’s financial position. Under the deal, Prime Infra acquired controlling interests in the Santa Rita, San Lorenzo, San Gabriel, and Avion power plants, the proposed Santa Maria project, and the Batangas LNG Terminal. First Gen retains a 40% stake, ensuring continued participation in the gas platform while unlocking substantial liquidity. Impact on Balance Sheet The ₱50-billion inflow will boost First Gen’s cash reserves, making the parent company effectively debt-free after having prepaid its ₱20-billion loans earlier this year. The transaction also positions First Gen with a strong net cash position, enhancing flexibility for future investments in renewable energy projects. Potential for Higher Shareholder Returns With a debt-free parent and substantial cash inflows, First Gen...

Three of the country’s leading food and beverage companies — San Miguel Food and Beverage Inc. (SMFB) , Universal Robina Corporation (URC) , and RFM Corporation — posted stronger results for the first nine months of 2025, signaling resilience despite cost pressures and shifting consumer dynamics. SMFB Leads with Broad-Based Growth SMFB delivered a 4.1% increase in consolidated revenues to ₱302.9 billion , while net income surged 10.8% to ₱33.7 billion . Growth was supported by all major segments: Food, Beer & Non-Alcoholic Beverages, and Spirits. The company also strengthened its balance sheet, reducing total liabilities to ₱187.2 billion and maintaining a hefty cash position of ₱62.4 billion. Dividend payouts totaling ₱2.00 per share year-to-date underscore confidence in sustained performance. URC Maintains Stability Amid Margin Pressure URC posted ₱124.6 billion in revenues , up 4.8% year-on-year , and net income of ₱9.03 billion , a 4.6% improvement . While gross margins...

VistaREIT, Inc. (VREIT) posted a 6.5% rise in nine-month net income to ₱1.12 billion , even as revenues dipped slightly to ₱1.80 billion. The REIT’s latest filing underscores its high-quality property portfolio , but also flags receivable aging and land lease structure as areas for investor scrutiny. Prime Locations Drive Stability VREIT’s 12-property portfolio spans key growth corridors in Metro Manila and major provincial hubs. Flagship assets include SOMO – A Vista Mall in Las Piñas, Vistahub BGC in Bonifacio Global City, and community malls in Antipolo, Pampanga, and Cebu . These sites anchor VREIT in high-density, high-income catchments , supporting resilient foot traffic and rental demand. GLA: 256,404 sqm Occupancy: ~97% Top contributors: SOMO (₱587.9M rental), Vistahub BGC (₱244.9M), Starmall SJDM (₱209.5M) The concentration in prime retail and office nodes mitigates vacancy risk and underpins long-term asset value, even as leases sit on land with remaining ter...

  From the Trading Desk. Shares the trading desk is planning to buy and accumulate.  The Philippine Stock Exchange Index (PSEi) has been battered in recent days, plunging to multi-year lows as investors digested weak GDP growth, peso volatility, and political noise. Last Friday’s close at 5,584.35 marked a sobering reminder of how fragile sentiment can be. But amid the carnage, one question looms large for long-term investors: Is Metrobank (MBT) a buy? The short answer: Yes—if you’re patient and disciplined. Why MBT Looks Attractive Now First, the sell-off was broad-based, not MBT-specific. Financials were dragged down alongside property and consumer names, but Metrobank’s fundamentals remain intact. In fact, the bank posted a record ₱37.28 billion in net income for the first nine months of 2025, with Q3 earnings up 2.6% year-on-year. Loan growth is healthy, non-performing loans are well-covered at 147%, and capital ratios—CET1 at 15.6%—are comfortably above regulatory mini...

SM Investments Corporation (SMIC) reported consolidated revenues of ₱482.3 billion for the nine months ended September 30, 2025, up 4.3% from last year, while net income after tax rose 5.6% to ₱88.8 billion , according to its latest SEC filing. Net income attributable to the parent reached ₱64.4 billion , driven by strong contributions from banking and property segments. Retail, which accounts for 66% of revenues , posted ₱318.1 billion in sales and ₱12.2 billion in net income. However, management flagged margin pressure from frequent flooding in Q3 and promotional activity in sports and athleisure categories. Merchandise inventories climbed to ₱47.9 billion , raising concerns over potential markdowns if consumer demand softens. Property arm SM Prime delivered ₱103.4 billion in revenues and ₱37.2 billion in net income, supported by mall rental growth of nearly 7%. Still, residential sales slipped 2% amid slower revenue recognition, while capital expenditures surged to ₱59 billi...

Aboitiz Power Corporation posted weaker results for the first nine months of 2025, as operating revenues fell 2.7% year-on-year to ₱144.33 billion from ₱148.32 billion in the same period last year. The decline came despite a 19% surge in energy sales to 32,138 GWh, as spot market prices plunged by about 33% amid cooler weather, slower economic activity, and oversupply from new renewable capacity under the Green Energy Auction Program. While revenue softened, operating expenses edged up 0.8% to ₱118.00 billion , driven by higher purchased power costs, increased operations and maintenance, and rising general and administrative expenses. Depreciation and amortization also climbed as the company absorbed the full impact of GNPower Dinginin’s units and new renewable assets. This cost escalation compressed margins, with EBITDA slipping 6% to ₱52.00 billion from ₱55.26 billion a year earlier. Management attributed the EBITDA decline primarily to lower Wholesale Electricity Spot Market (W...

GMA Network Inc. (PSE: GMA7) may be forced to trim its cash dividend as the Philippine economy shows signs of slowing, putting pressure on advertising revenues—the company’s primary income source. The network’s strong performance in 2025 was fueled by election-related advertising , which drove a 12% revenue increase to ₱13.99 billion for the first nine months , according to its latest SEC filing. Advertising accounted for more than 90% of total revenues, with political advocacies and campaign ads ahead of the May midterm elections providing a significant boost. GMA declared a ₱0.50 per share dividend in March 2025 , totaling ₱2.43 billion , following ₱0.60 in 2024 and ₱1.10 in 2023. This payout represented an aggressive 88% of annualized earnings , based on its nine-month net income of ₱2.07 billion . Analysts estimate that a 2% GDP slowdown could cut profits by up to 24% , pushing payout ratios above 100% if the dividend remains unchanged. To maintain financial prudence, a reduced ...

Jollibee Foods Corporation (JFC), the country’s largest quick-service restaurant operator, is feeling the sting of its aggressive global expansion as acquisitions that promised growth are now eroding profitability under the weight of soaring financing costs. The company’s nine-month net income in 2025 inched up just 1.6% to ₱9.02 billion , despite a robust 14.3% revenue surge to ₱224.22 billion , according to its latest SEC filing. Behind the muted bottom line: a sharp rise in interest expense and losses from newly consolidated brands. Interest expense ballooned 47.9% year-on-year to ₱5.04 billion , driven by the issuance of ₱16.99 billion in senior debt securities and heavier reliance on short-term borrowings after redeeming ₱20.26 billion in perpetual securities. The debt binge funded acquisitions like Tim Ho Wan , which added ₱2.18 billion in revenue but posted a ₱86.9 million net loss in the first nine months. JFC booked ₱9.96 billion in goodwill for the dim sum chain, raising...

PAL Holdings, Inc., the parent company of Philippine Airlines, reported robust financial results for the nine months ended September 30, 2025, signaling renewed investor confidence in the flag carrier’s turnaround story. The company posted a net income of ₱9.88 billion , up 22.4% from ₱8.08 billion in the same period last year, while total comprehensive income surged 17.8% to ₱10.14 billion . Revenues climbed to ₱136.01 billion , driven by higher ancillary income and cargo operations. Ancillary revenues jumped 23.7% , reflecting strong demand for seat upgrades and other services, while cargo revenue rose 3.6% . Operating expenses increased modestly by 3.97% , aided by lower fuel costs and vendor credits related to grounded aircraft. The company’s balance sheet also improved, with debt-to-equity ratio dropping to 1.51 from 1.87 , signaling reduced financial risk. Equity rose to ₱53.03 billion , a 23.7% increase from year-end 2024. “PAL’s performance underscores its resilience and st...

LT Group, Inc. (PSE: LTG), the Lucio Tan–led conglomerate with interests in banking, tobacco, distilled spirits, beverages and property, reported its best nine‑month performance on record , as consolidated net income climbed 15.6% year on year to ₱30.84 billion for the nine months ended September 30, 2025 , driven by margin expansion at Philippine National Bank (PNB), steady equity earnings from PMFTC, and stronger profitability at Tanduay Distillers. Attributable net income to LTG shareholders rose 13.9% to ₱22.57 billion , translating to earnings per share (EPS) of ₱2.09 .  The nine‑month results cap a year in which LTG had already flagged robust momentum after a 17% jump in first‑half attributable profit to ₱14.97 billion , then the second‑best H1 since listing, with banking and tobacco as the biggest contributors.  Segment drivers: banking leads; tobacco, spirits support Banking (PNB). The group’s profit mix remained banking‑led: the PNB segment’s net income rose 22...

Bloomberry Resorts Corporation (PSE: BLOOM) reported that operating costs grew far faster than revenues in the first nine months of 2025, compressing margins and tightening operating cash coverage of interest, according to its latest SEC Form 17‑Q. The company posted modest top‑line growth but a steep drop in EBITDA and cash from operations, reflecting heavier expense run‑rates from Solaire Resort North’s ramp‑up and the launch of its new broad‑mass digital gaming platform, MegaFUNalo! Revenue up slightly, costs up sharply Net revenues rose 3.1% year‑on‑year to ₱39.70 billion in 9M 2025. However, operating costs and expenses jumped 21.7% to ₱36.48 billion , pushing the cost‑to‑revenue ratio to 91.9% from 77.8% a year earlier. That margin squeeze contributed to a 29.9% decline in reported EBITDA to ₱8.84 billion , with EBITDA margin sliding to 22.3% from 32.7% .  Management attributed the higher cost base primarily to Solaire Resort North’s ramp‑up and MegaFUNalo! ope...

  Robinsons Retail Holdings Inc. (RRHI) is grappling with shrinking profitability and mounting financial costs as the retailer absorbs the impact of a debt-funded share buyback and strategic investments. The company’s net income attributable to equity holders plunged 60% to ₱3.12 billion for the first nine months of 2025, down from ₱7.81 billion a year ago. The decline follows the absence of last year’s one-time gain from the BPI–RBank merger and reflects higher operating expenses and interest charges. RRHI’s interest expense soared 17% to ₱2.66 billion , driven by short-term and long-term borrowings that ballooned to ₱41.19 billion as of September 30. The debt spike stems largely from the ₱15.77 billion buyout of DFI Retail Group’s stake in May, part of a broader share repurchase program that pushed treasury shares to ₱23.6 billion. Liquidity has tightened, with the current ratio slipping to 0.88 from 1.09 at year-end 2024, while the debt-to-equity ratio climbed to 1.21× f...

  A. Soriano Corporation (PSE: ANS), one of the country’s oldest diversified holding firms, reported a sharp decline in earnings for the nine months ended September 30, 2025, raising questions about the sustainability of its dividend policy amid market volatility and rising operating costs. The company posted a consolidated net income of ₱3.01 billion , down 37% from ₱4.77 billion in the same period last year. The decline was largely attributed to a 46.6% drop in investment gains , which fell to ₱2.00 billion from ₱3.75 billion in 2024, reflecting the weaker mark-to-market performance of its equity and fund holdings. Despite the earnings contraction, ANS maintained its semiannual dividend payout, declaring a total of ₱1.875 billion in cash dividends year to date. This includes ₱0.50 per share paid in April and ₱0.25 per share declared in September, funded through a mix of operating cash flows and retained earnings. However, analysts warn that the company’s increased relia...

First Gen Corporation (FGEN) is moving forward with a landmark transaction to sell 60% of its gas-fired power generation and LNG infrastructure business to Prime Infrastructure Capital Inc. for ₱50 billion , following regulatory clearance from the Philippine Competition Commission (PCC). The deal includes the Santa Rita, San Lorenzo, San Gabriel, and Avion gas plants, as well as the Batangas LNG terminal, which began commercial operations in January 2025. The transaction marks a strategic pivot for the Lopez-led energy firm, which is increasingly focused on expanding its renewable energy portfolio and infrastructure assets. First Gen will retain a 40% stake in the gas platform, ensuring continuity and future upside participation. Revenue and Earnings Decline Underscore Strategic Urgency For the nine months ended September 30, 2025, consolidated revenues fell 3.3% year-on-year to US$1.786 billion , while net income declined 2.0% to US$265.8 million . The downturn was driven primar...

Converge ICT Solutions Inc. (PSE: CNVRG) reported a ₱8.90 billion net income for the nine months ended September 30, 2025, up 8.4% year-on-year , as the fiber broadband provider sustained strong growth across both residential and enterprise segments. Total revenues climbed 10.1% to ₱33 billion , with residential sales contributing ₱27.7 billion (+9.1%) and enterprise revenues reaching ₱5.2 billion (+16.2%) . The company maintained its industry-leading EBITDA margin of 61.2% , generating ₱20.2 billion in EBITDA , up 10.6% from the same period last year. Converge continued to strengthen its balance sheet, reducing total borrowings to ₱25.53 billion , down 14% from year-end 2024. Its Net Debt-to-EBITDA ratio stood at just 0.4× , while interest coverage reached 16×, reflecting strong financial discipline and liquidity. Capital expenditures totaled ₱7.36 billion , focused on network expansion, customer premises equipment, and data center development. The company also committed ₱18.8 bi...

DMCI Holdings, Inc. (PSE: DMC) posted a 22 percent drop in consolidated net income to ₱11.8 billion for the nine months ended September 30, 2025, from ₱15.1 billion in the same period last year, as margin pressures and segment headwinds eroded profitability despite higher revenues. The diversified conglomerate reported ₱87.6 billion in revenues , up 13 percent year-on-year, but operating expenses surged 55 percent, compressing margins. Earnings per share fell to ₱0.89 from ₱1.14. Energy Price Normalization Hits Core Earnings Semirara Mining and Power Corp. (SMPC), the group’s largest contributor, saw profits plunge 34 percent to ₱5.8 billion as global coal prices and spot electricity rates normalized from 2024 highs. Despite record shipment and generation volumes, weaker pricing dragged margins. Cement Integration Losses Deepen Newly consolidated Concreat Holdings incurred a ₱1.62 billion loss , weighed down by high financing costs and intense industry competition. Manageme...

RL Commercial REIT, Inc. (RCR), the country’s largest REIT by asset size, reported a robust ₱7.59 billion in revenues for the nine months ended September 30, 2025, marking a 30% increase year-on-year . The surge was fueled by the infusion of nine malls in the third quarter and the full-year contribution of 13 properties added in 2024 , reinforcing RCR’s aggressive expansion strategy. Rental income climbed 29% to ₱6.14 billion , while revenue from dues rose 36% to ₱1.41 billion , reflecting steady occupancy across its growing portfolio. Net income reached ₱5.46 billion , up 28% year over year, while  maintaining a substantial 72% operating margin . However, earnings per share slipped to ₱0.34 from ₱0.39 in 2024, mainly due to share dilution following property-for-share swaps. The company’s balance sheet remains solid, with total assets surging 27% to ₱145.7 billion and equity rising to ₱140.6 billion . RCR continues to operate with zero financial debt , giving it flexibility ...

Ginebra San Miguel Inc. (GSMI) delivered another stellar performance for the first nine months of 2025, posting ₱48.66 billion in sales , up 7% year-on-year, and ₱6.35 billion in net income , a 17% increase from last year. Earnings per share surged to ₱22.17 , and the company declared a total of ₱16.00 per share in dividends for the year, reinforcing its reputation as a high-yield play in the spirits segment. Yet, analysts point to San Miguel Food & Beverage, Inc. (SMFB) as the more compelling investment choice. Here’s why: Higher Dividend Yield While GSMI boasts a generous payout, its dividend yield stands at ~5.7% based on current prices. SMFB, on the other hand, offers ~6.6–6.7% , thanks to steady quarterly dividends and occasional specials. For income-focused investors, SMFB’s yield advantage is hard to ignore. Diversified Earnings Base GSMI is a single-segment player, heavily reliant on gin and other spirits. SMFB consolidates beer, spirits, and food businesses , provi...

  The Philippines is no stranger to storms, but Super Typhoon Uwan is not just another tempest—it is a reckoning. As it lashes Luzon and Visayas with winds strong enough to rip steel roofs and waves that swallow coastlines, the country’s already fragile economy teeters on the edge of collapse. Yet, Uwan is not the only storm we face. Converging with this natural disaster is a man-made tempest—the super typhoon of corruption —and together, they threaten to create a doom loop of misery, discontent, and unrest. We entered the last quarter of 2025 limping. Growth slowed to 4.0% in Q3 , the weakest in nearly three years. Inflation was stubborn, public works were delayed, and investor confidence was shaky. Now, Uwan threatens to rip away what little momentum remains. Fields of rice and corn—the lifeblood of millions—are drowning. Roads and bridges, the arteries of commerce, are being severed. Power grids flicker and fail. This is not just a natural disaster; it is an economic shockwav...

By any measure, Globe Telecom has been a darling of dividend investors. A steady stream of quarterly payouts—₱25 per share, totaling ₱75 so far this year—has reinforced its reputation as a shareholder-friendly blue chip. But beneath the surface of these generous distributions lies a troubling question: Can Globe really afford to keep this up? The numbers tell a sobering story. Core service revenues fell 2% year-on-year to ₱121.7 billion in the first nine months of 2025. Mobile —the company’s bread and butter —is losing steam as voice and SMS revenues collapse under the weight of digital substitution. Home broadband is flat, and corporate data is shrinking. Yes, mobile data and fiber are growing—but not fast enough to offset the erosion elsewhere. This is not the profile of a company with expanding cash flows. Meanwhile, costs are creeping upward. Operating expenses remain stubbornly high at ₱57.5 billion, and depreciation surged 7% to ₱40 billion as Globe races to keep its network com...