Local conglomerates expect to sustain their recovery from the pandemic in the second half this year amid the continued reopening of the economy.
Listed companies are banking on the resumption of face-to-face classes, return to onsite work by office workers and “revenge spending” in the third and fourth quarters.
San Miguel Corp., one of the largest and most diversified conglomerates with revenues equivalent to about 4.9 percent of the gross domestic product in 2021, reported a 24-percent increase in recurring consolidated net income in the first half to P32.5 billion.
San Miguel president and chief executive Ramon Ang said the group achieved strong first-half earnings growth despite the challenging geopolitical environment in Easter Europe that resulted in uncertainties and serious supply and cost issues.
“This shows that our country’s economic recovery and growth are gaining pace. We will maximize every opportunity to further strengthen our performance in the second half,” said Ang.
Ayala Corp. president and chief executive Fernando Zobel de Ayala believes the ngrowth momentum would continue in the second half despite the headwinds in the market.
The conglomerate, which has investments banking, real estate, telecommunications and power generation, reported a 56-percent growth in net income to P16.3 billion in the first semester as the country’s reopening revitalized mobility and consumer confidence.
“However, Ayala is cognizant of the current macroeconomic headwinds that have impacted our businesses in varying degrees. While this is the case, we believe that there is still growth to be realized for the rest of the year with what we are seeing on the ground,” Zobel de Ayala said.
SM Investments Corp., which has investments in market-leading businesses in retail, banking and property, also has a positive outlook for the second half.
SMIC president and chief executive Frederic DyBuncio said the company was encouraged by robust spending in the first half despite the rising inflation rate.
“This is a bright spot in the Philippines and in the region amid global headwinds,” DyBuncio said.
Amid increased consumer spending, SMIC’s retail business posted strong sales and foot traffic in its shopping malls, even matching pre-pandemic levels and signifying strong pent-up demand from consumers.
Mall operators SM Prime Holdings Inc. and Ayala Land Inc. resumed charging full rental fees in their malls after more than two years of offering concessions to tenants at the height of the pandemic.
This move would translate into higher profits for these companies as the second half is seasonally stronger than the first semester.
JG Summit Holdings Inc. of the Gokongwei Group is also optimistic about the prospects for the second semester with the easing of international travel restrictions and the resumption of face-to-face classes.
JG Summit president and chief executive Lance Gokongwei said the group’s overall business benefitted from the reopening of the economy.
Gokongwei said, however, that some businesses, particularly airline and petrochemicals, were still reeling from cost pressures, rising interest rates and peso devaluation.
JG Summit incurred a P2.7-billion net loss in the first half. “Our business units have implemented measures on how to mitigate the margin erosion through selective pricing actions and productivity initiatives,” Gokongwei said.
“Given the strong demand for products and services despite the high inflationary environment in the first half, we remain optimistic that the further easing of restrictions especially on international travel as well as the resumption of face-to-face classes in the second half will sustain the topline growth momentum,” Gokongwei said.