2022 HALF-YEAR UNAUDITED FINANCIAL RESULTS
EARNINGS UP, DISTRIBUTION HIGHER
Highest-Ever Interim Recurring Profit
CONTRIBUTION FROM OPERATIONS UP 21% TO RECORD US$302.5 MLN
RECURRING PROFIT RISES 26% TO RECORD HIGH US$263.3 MLN
NET PROFIT RISES 34% TO US$241.7 MLN VS. US$181.0 MLN
TURNOVER ON TRACK TO SET RECORD HIGH FOR FULL YEAR
INTERIM DISTRIBUTION RAISED 17% TO 10.5 HK CENTS/SHARE
Hong Kong, 31st August, 2022 - First Pacific Company Limited (HKSE: 00142) ("First Pacific" or the "Company") today reported its interim financial results for the six months ended 30th June 2022, showing a rise in contribution from operations, recurring profit, and reported net profit notwithstanding exchange-rate and commodity price volatility as the global economy recovers from the COVID-19 pandemic.
"Despite a more challenging macro-environment, all of our investee companies showed improved results," said Manuel V. Pangilinan, Managing Director and Chief Executive Officer of First Pacific. "Looking ahead we see strong potential for stable earnings growth over the medium to long term."
First Pacific is a leading investment holding company focused on the economies of emerging Asia and is a major or controlling shareholder in Indonesia's biggest vertically integrated food company and in the Philippines' leading telecommunications, infrastructure, and mining companies.
First Pacific's Board of Directors approved an interim distribution of 10.5 HK cents per share, up 1.5 HK cents or 17% from the year-earlier distribution and making up approximately 22% of recurring profit. During the period, shareholder returns were boosted by expenditure of US$5.6 million on share repurchases, part of a three-year US$100 million program launched in March 2021.
First Pacific's 2022 half-year results saw turnover rise 20% to US$5.1 billion from US$4.2 billion a year earlier, led by PT Indofood Sukses Makmur Tbk ("Indofood"), one of the largest instant noodle producers in the world with its Indomie brand. Total contribution from operations increased 21% to a record high US$302.5 million versus US$249.2 million on stronger results at all operating companies in the First Pacific Group.
Recurring profit rose 26% to US$263.3 million, the highest ever, from US$209.5 million in the first half of last year as overall Head Office costs fell 1% to US$39.2 million versus US$39.7 million as net interest expense fell 5% to US$24.4 million from US$25.8 million. Reported net profit rose 34% to US$241.7 million versus US$181.0 million in the year-earlier period. It was a record high for an interim figure in the 41 years of First Pacific's existence as a listed company.
The Company's basic earnings per share rose 36% to 5.67 U.S. cents (44.2 HK cents) per share in the first half of 2022 from 4.18 U.S. cents (32.6 HK cents) per share in the first half of 2021. Recurring basic earnings per share (based on recurring profit) rose 27% to 6.17 U.S. cents (48.1 HK cents) from 4.84 U.S. cents (37.8 HK cents). In U.S. dollar terms, the interim payout rose to 1.35 U.S. cents from 1.15 U.S. cent.
Indofood saw its contribution rising to a new record high of US$124.4 million versus US$122.9 million as improved profitability at the Agribusiness offset lower profit at the Consumer Branded Products business.
The contribution from PLDT Inc. ("PLDT"), the largest telecommunications services provider in the Philippines, rose 3% to US$73.0 million from US$71.2 million as strong demand growth at its Home and Enterprise businesses lifted net service revenues by 5% to a record high US$1.8 billion.
The contribution from Metro Pacific Investments Corporation ("MPIC") rose 20% to US$59.6 million from US$49.9 million as the Philippine government's response to the COVID-19 pandemic began to deliver greater freedom of movement and the easing of restrictions on economic activity. MPIC is an infrastructure holding company whose businesses range from the country's largest electricity distributor to its biggest toll road network, water distributor, and private hospital group.
PacificLight Power Pte. Ltd. ("PLP") contributed US$39.0 million to First Pacific in the first half of 2022, up more than 10-fold from US$2.8 million a year earlier as higher non-fuel margin for electricity sales, gradual economic recovery, and the development of data centers in Singapore contributed to demand growth.
Philex Mining Corporation ("Philex") saw its contribution rise 42% to US$9.8 million from US$6.9 million on higher prices for the copper and gold produced.
Following contributions from operating companies to First Pacific's earnings, corporate overheads rose 15% to US$11.3 million from US$9.8 million in the year-earlier period, the interest bill fell 5% to US$24.4 million versus US$25.8 million, and other expenses fell 15% to US$3.5 million from US$4.1 million. First Pacific Head Office recorded foreign exchange losses of US$9.5 million versus US$2.9 million a year earlier and foreign exchange losses from operating units were US$40.2 million versus US$19.6 million.
First Pacific received US$66.3 million in dividend and fee income from its operating companies in the first half of the year, down 3% from US$68.0 million received a year earlier. This total includes distributions from PLDT, MPIC and others, but not Indofood, which pays one distribution annually, usually in August.
At 30th June 2022, net debt at the Head Office was approximately US$1.3 billion, little changed from the end of 2021, with cash on hand of US$138.6 million, up from US$113.0 million. Fixed-rate debt made up 64% of total debt, with floating-rate debt making up the remaining 36%. First Pacific's blended interest cost amounted to 3.7%, up from 3.2% at year-end while the average maturity of its debt was 3.3 years, unchanged from the end of 2021.
As part of its proactive liability management initiatives, First Pacific has obtained committed banking facilities totaling US$370.0 million to refinance the US$357.8 million outstanding bond due for redemption in April 2023.
Up to the end of July 2022, the Company has spent approximately US$32 million since the launch of its US$100 million share repurchase program in March 2021.
"We are several months into a challenging interest-rate environment as can be seen with the rise to 3.7% in our blended average interest cost in the first half of the year from 3.2% for the whole of 2021," said Joseph H.P. Ng, appointed as Chief Financial Officer on 1st August 2022. "While our earnings continue to grow, our dividend income follows at a slower pace," he said. "In the months ahead, we will be reviewing our capital allocation policy taking into account the above factors and macroeconomic volatility with a view to maintaining resilience going forward."
OUTLOOK
"We are pleased to increase our semi-annual distribution for a fourth time in a row even as we continue our biggest share repurchase program in a decade. We anticipate that these will be welcomed by our shareholders and the wider market," said First Pacific CEO Pangilinan. "Our core holdings of Indofood, PLDT, and MPIC remain stable sources of your Company's strength. Looking ahead, we are optimistic for the prospects of these businesses lying at the core of First Pacific."
Further details of earnings by First Pacific's subsidiary and associated companies follow.
REVIEW OF OPERATIONS
Indofood reported a 2% increase in core income to a record high Rp4.0 trillion from Rp3.9 trillion a year earlier as improved profitability at the Agribusiness offset lower profit at the Consumer Branded Products business.
More details are available at www.indofood.com.
PLDT reported a 12% increase in telco core income to ₱17.0 billion from ₱15.2 billion in the first half of 2021 on service revenues rising 6% to a record high of ₱97.1 billion versus ₱91.6 billion as consumer and business demand for data and broadband services continued to rise.
More details are available at www.pldt.com.
For more information, please visit https://doc.irasia.com/listco/hk/firstpacific/interim/2022/intpress.pdf.
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