Quick Take: Megawide's Q1 losses and 2 more market updates
Premiere Horizon Alliance [PHA 0.26; 24% avgVol] [link] reported a Q1 net loss of P41 million, which was 29% better than the P58 million net loss PHA shareholders suffered in Q1/22, but 123% worse than the P176 million profit earned in Q4/22. All of PHA’s revenues in the quarter came from real estate sales (up 240%).
MB Quick Take: It would be wild to hear from PHA employees that have been trying to do PHA’s traditional work for the past two years while the management team and the ownership group debased itself and embroiled the company and its shareholders into a drawn-out fight over control that has spiraled into several criminal cases filed, a weird shares auction, and some top-tier Twitter shitposting from the leader of the failed takeover group.
ACEN [ACEN 6.15 0.8%; 60% avgVol] [link] filed application with SEC for a follow-on offering of 25 million preferred shares from a 50 million share shelf registration, priced at P1000.00/share. The initial sale will be comprised of 12.5 million firm shares and 12.5 million oversubscription allotment. The sale will raise approximately P25 billion for ACEN, before transaction fees are subtracted. No details on dividend rate or listing dates were provided.
MB Quick Take: As we’ve discussed before, preferred shares are a useful fundraising tool and are looked at favorably by boards because of the flexibility that they offer as compared to bank debt and bond payments. This offering is completely separate from the follow-on preferred shares offering (ACPAR) from ACEN’s parent company, Ayala Corp. The sale will be added to the MB IPO Calendar once the PSE approves and the details of the dates are known.
Megawide [MWIDE 3.21 3.6%; 141% avgVol] [link] reported a Q1 net loss of P7 million, which was 88% better than the P61 million net loss it suffered in Q1/22. Revenues were up 11% to P4.4 billion, with 98% of that coming from MWIDE’s construction segment, but direct costs were up 20% to P3.9 billion, mostly from price inflation of materials and inputs, including labor.
MB Quick Take: MWIDE has a substantial book of ongoing projects with huge and well-known clients that will deliver revenue over time, but the timeline of that revenue recognition is the challenge that will always make it difficult to compare a construction company’s financials between periods. While MWIDE provides an itemized list of clients and projects in its Annual Report, I wish they (and other companies where revenue recognition can lead to material changes in net income between periods) would provide something that works more like a timeline of estimated revenue recognition that could help investors judge how the plan is actually unfolding compared to the estimates.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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