Appliance maker Concepcion Industrial Corp. earmarked P100 million for a share buyback program to be implemented over a three-year period.
“The buyback program aims to enhance shareholder value through the repurchase of shares whenever the stock is trading at a price discount perceived by the company as not reflective of its fair corporate value,” Concepcion said in a disclosure to the stock exchange.
The buyback will run from February 17, 2016 to February 16, 2019.
Concepcion said the share repurchase program would be capped at a maximum of 11 million common shares, representing three percent of the company’s current market capitalization.
The buyback program is not expected to adversely affect the company’s ability to fund its prospective and existing investment projects.
From a 52-week high of P65.80 per share on March 20, 2015, share price of Concepcion has plunged by more than 43 percent to P37.40 apiece on Tuesday.
Concepcion early this month reported that net income in 2015 rose 3.5 percent to P661 million from P637 million year-on-year on lower margins.
Concepcion said the 2015 sales increased 15 percent to P10.6 billion from P9.2 billion in 2014.
The company earlier projected both revenues and net income to grow 15 percent in 2015.
Despite the slower growth in 2015, Concepcion chief finance officer Victoria Betita said the company remained on track to accelerate growth over the next five years.
“We are confident about our accelerated growth plans for the next five years. 2015 was about taking action toward achieving longer-term goals. In addition to our constant focus on cost reduction and profitability, we have made significant strides in building organizational capability and processes.” Betita said.
The company will prioritize utilizing synergies in 2016 to boost sustainable profitability without undermining sales growth and capability building.
Concepcion has been in the business of manufacturing of air conditioning units, refrigerators and freezers for the domestic market for more than 30 years.
It is known for its several notable brands that include Carrier, Condura, Kelvinator and Toshiba-Carrier.