PHINMA Corp. expects financial rebound in second half

LISTED conglomerate PHINMA Corp. expects its financial performance to rebound in the second half of the year, supported by improving macroeconomic conditions, the company’s chairman said.

“The first half was very good for the education (segment), but the other businesses were mixed. There were a lot of factors that affected it. We are hoping that the second half will be significantly better,” PHINMA Chairman and Chief Executive Officer Ramon R. del Rosario, Jr. told reporters on the sidelines of a media event in Makati City last week.

“Our construction materials group (CMG) is very dependent on the implementation of infrastructure projects of government. We’re hoping also that on the macroeconomic side, interest rates will begin to come down and that will also affect both our properties and our construction materials lines,” he added.

For the first half, PHINMA saw a 63% decrease in its consolidated net income to P170.93 million amid economic challenges.

First-half consolidated revenue rose by 17% to P10.37 billion led by the education business.

Mr. Del Rosario said that PHINMA aims to be more active in the affordable housing business. The conglomerate has presence in the property segment via PHINMA Property Holdings Corp.

“In the property side, we want to become much more active in affordable housing. We are in that line now but we want to make it a more significant part of our business. That’s another area that we will be investing in quite heavily,” he said.

“We’re hoping that it will become a very significant part of our business, to make good quality housing available to the segments of our population that have so far not been able to afford,” he added.

Mr. Del Rosario also said that PHINMA’s CMG business is open to any acquisitions as long as it meets certain pricing conditions.

The CMG segment comprises Union Galvasteel Corp., Philcement Corp., and PHINMA Solar Energy Corp.

“We are open-minded about it. But right now, we’re focusing on improving the operations of the Petra plant that we acquired in Dipolog. We also have already announced that we are going to Davao with a new terminal,” he said.

“It should have an attractive price. We know the cement business. We came from there. If there are opportunities that come up, we will be open-minded about it,” he added.

Mr. Del Rosario said this as Philcement Mindanao Corp. announced a plan in May to acquire Petra Cement, Inc. for P500 million, while Philcement and Anflo Management and Investment Corp. signed a joint venture in June to build a P2-billion cement manufacturing plant in Davao del Norte.

In a separate statement, PHINMA Education Holdings, Inc. said that construction is underway for the PHINMA Araullo University Basic Education Building and phase 1 of the San Jose campus in Nueva Ecjia, as well as the PHINMA University of Pangasinan-Riverside campus.

The company added that its Horizon University Karawang in West Java, Indonesia is looking at a new 10-storey building to accommodate bigger enrollment numbers.

PHINMA Education President and Chief Executive Officer Chito B. Salazar recently said that the company’s planned initial public offering (IPO) has been deferred by still three to five years following the recent entry of global investment company KKR & Co., Inc.

“The IPO was set aside with the entry of KKR. We don’t need to think about it. (The IPO) is still about three to five years (away). We’re really thinking whether we want to do an IPO,” he said.

PHINMA Education signed an investment agreement with Phoenix Investments II Pte. Ltd. and Rise Edu Pte. Ltd. on May 21.

The investment agreement covers the issuance of P4.5 billion worth of newly issued shares by PHINMA Education. Phoenix Investments is an investment vehicle of funds managed by KKR, while Rise Edu Pte. Ltd. is an investment vehicle of funds managed by Kaizenvest, an education-focused private equity fund focused on emerging markets in South and Southeast Asia.

PHINMA shares were last traded on Aug. 16 at P23 per share. — Revin Mikhael D. Ochave