the Outsider - PSE Points to Ponder

  Stronger geothermal earnings lifted first-half profit, but weaker operating cash flow and an initial ₱16.5 billion investment in hydro projects sharply reduced the power producer’s cash cushion **MANILA—**First Gen Corp. entered 2026 with a large cash pile from the sale of a controlling stake in its natural-gas business. Six months later, much of that financial cushion had disappeared. The Philippine power producer ended June with ₱23.74 billion in cash and cash equivalents, down ₱33.77 billion—or nearly 59%—from ₱57.51 billion at the end of 2025. The decline reflected weaker cash generation, debt repayments and the opening payment on an ambitious push into pumped-storage hydropower.  Those demands are casting a cloud over First Gen’s second-half dividend distribution, even as its operating businesses—particularly geothermal subsidiary Energy Development Corp.—reported stronger results. First Gen paid ₱16.5 billion during the first half for a 33% interest in Prime Hydropower...

  Overseas sales are growing more than twice as fast as the domestic business, but weaker food-service margins, Coffee Bean losses and rising finance costs are limiting the payoff to shareholders Jollibee Foods Corp.’s global expansion is delivering the growth that Chairman Tony Tan Caktiong has long sought. It is also making the company bigger faster than it is making shareholders richer. The Philippine restaurant group generated ₱162.45 billion in revenue during the first half of 2026 , up 9.9% from a year earlier. System-wide sales—the measure that includes sales from company-owned and franchised stores—increased 12.4% to ₱244.67 billion . But net income fell 16.7% to ₱4.93 billion , while earnings attributable to the parent company declined 13.3% to ₱4.87 billion. The mismatch reflects the mounting cost of Jollibee’s transformation from a Philippine fast-food champion into a sprawling international restaurant operator. Its overseas businesses are growing considerably faster tha...

  Ramon Ang’s purchase gave Gabby Lopez’s family branch an undisclosed amount of cash—and gave the billionaire a seat inside one of the Philippines’ most storied business groups. The unanswered question is whether the proceeds could finance a rescue of its most famous but financially troubled company. **MANILA—**Ramon S. Ang has built a reputation for making large bets on difficult businesses. His latest investment came with an unusually conspicuous omission: the price. On August 10, Ang acquired the 25.68% interest in Lopez Inc. previously held by Crème Investment Corp., the investment vehicle representing the family branch of former ABS-CBN chairman Eugenio “Gabby” Lopez III. Ang made the purchase personally through his wholly owned Illumina Investment Holdings Inc., rather than through San Miguel Corp., the conglomerate he chairs. Neither party disclosed the purchase price, payment terms, or rights attached to the shares. Lopez said the sale was intended partly to help restore ...

  The home-improvement retailer generates more cash by cutting inventory, as shrinking margins and growing lease obligations cloud its expansion drive **MANILA—**Wilcon Depot Inc. entered 2026 selling more home-improvement products and carrying substantially less inventory. The combination produced a surge in cash flow—but barely moved the company’s bottom line. The Philippine retailer reported net income of ₱1.20 billion for the six months ended June 30 , up 3.5% from ₱1.16 billion a year earlier. Revenue climbed nearly 11% to ₱18.98 billion , highlighting a widening gap between Wilcon’s sales growth and its ability to turn those sales into profit.  That gap reflects a central challenge facing the company: Customers are buying more, but the mix of what they are buying has become less profitable. Wilcon’s gross margin fell to 37.3% from 38.7% a year earlier. The contribution of higher-margin in-house and exclusive brands declined to 50.5% of sales from 52.3%, partly offsettin...

  The water concessionaire posted stronger first-half earnings, but rising borrowings, weak cash conversion and an aggressive infrastructure program complicate the financial picture. Maynilad Water Services Inc.’s first-half results carried two contrasting messages for investors: The Philippine water concessionaire is earning more, but it is also borrowing and spending at a considerably faster pace. The company, which trades under the ticker MYNLD , reported net income of ₱8.51 billion for the six months ended June 30, up 14% from ₱7.47 billion a year earlier. Operating revenue rose a more modest 4.1% to ₱19.11 billion, supported by higher billed water volume and a slight increase in the average effective tariff.  Behind those headline gains, Maynilad’s balance sheet became more leveraged. Interest-bearing debt climbed 11.9% in six months to ₱103.55 billion , from ₱92.56 billion at the end of 2025. That increase was more than twice the company’s 5% growth in total assets , w...

  DMCI Holdings Inc. delivered its strongest first-half performance in years, powered by a surge in nickel mining earnings and resilient contributions from power and real estate. Yet investors increasingly face a new question: whether the conglomerate's growing cash pile is being preserved not for higher dividends, but for a future battle over Semirara Island's most important coal asset.  The Consunji-led conglomerate reported first-half core net income of ₱11.28 billion , up 25% from a year earlier, while reported net income rose 26% to ₱11.38 billion . Second-quarter earnings were even more impressive, jumping 61% year over year to ₱6.52 billion .  The standout performer was DMCI Mining. Revenue from the nickel business nearly doubled to ₱5.09 billion in the first six months of 2026 from ₱2.59 billion a year earlier, while net income contribution soared 130% to ₱1.74 billion . During the second quarter alone, nickel shipments reached a record 1.26 million wet metric ...

First-half results suggest the Philippine coal producer is conserving capital, preserving borrowing room and holding back dividends as uncertainty over its flagship mining contract approaches a decisive stage. **MANILA—**Semirara Mining and Power Corp.’s first-half results tell two stories. The first is an operating story: a surging power business offset a sharp deterioration in coal profitability, allowing the company—listed under the ticker SCC —to report a modest increase in consolidated earnings. The second, and potentially more consequential, is a story of financial preparation. SCC ended June with ₱18.34 billion in cash , more than four times the ₱4.36 billion it held at the end of 2025. The increase appears designed to give the company room to maneuver as the Philippine government prepares to auction off coal development areas on Semirara Island, where SCC’s existing Coal Operating Contract No. 5 is scheduled to expire in July 2027. The cash buildup reflects three related decisi...