Listed firms rebound with better performance in H1

MANILA, Philippines – Listed companies performed better in the first half of the year compared to the first quarter, leading online brokerage firm COL Financial said.

COL said 40 percent or 21 of the 53 listed companies it monitors performed better than expectations.

“This is an improvement compared to the first quarter earnings season where only 25 percent performed better than expected,” COL vice president and research head April Lynn Tan said in a report.

Out of the 21 companies that reported better than expected earnings, nine outperformed due to the strength of their core operations. These include EastWest Bank, Union Bank, GMA-7, Aboitiz Equity Ventures, Concepcion Industrial Corp., Robinsons Retail Holdings Inc., Melco Crown, Resorts World and SM Prime.

On the other hand, seven listed companies outperformed due to one off factors such as trading gains. Among these firms were GT Capital Holdings Inc., Metro Pacific Investments Corp., BPI, Ayala Corp. First Gen Corp., First Philippine Holdings and China Banking Corp.

However, three companies that outperformed expectations are still expected to suffer from downgrades due to factors that will negatively affect their future profits. These are FPH, First Gen and Manila Water Corp.

According to COL, only 11 or 20.8 percent of companies monitored performed below expectations, lower than the 32.7 percent share during the first quarter.

Companies that performed below expectations underperformed for varying reasons, mostly due to company specific factors.

Notable underperformers were Universal Robina Corp., after its Vietnamese operations was hit by lead contamination scare and local competition; and Philippine Long Distance Telephone Co. which suffered from a faster than expected drop of revenues from legacy businesses.

“Median earnings growth of the listed companies that we monitor reached 12.5 percent, faster than the 10.6 percent growth registered during the first quarter 2016 earnings season. Except for the telco sector, all sectors registered positive earnings growth or at least narrower losses compared to the first half of 2015,” COL said,

COL expects the gaming industry to recover as gross gaming revenues have been improving steadily.

Bloomberry, Melco Crown and Resorts World are likely to sustain their positive performance this year, COL said.