PCEV owns 50% of Beacon, a special purpose company jointly owned by PCEV and Metro Pacific Investments Corporation ("MPIC”) whose sole purpose is to hold shares in Meralco. As of 31st December 2011, Beacon beneficially owned 511.2 million shares, equivalent to a 45.4% interest in Meralco.
On 20th January 2012, PCEV’s Board of Directors approved the subscription to 135 million Beacon common shares for a total consideration of P=2.7 billion with MPIC approving a similar subscription. On the same date, Beacon purchased 30 million common shares representing 2.7% equity interest in Meralco from First Philippine Utilities Corporation ("FPUC”) at the cash price of
PhP 295 per share or a total consideration of
PhP 8.85 billion. FPUC will retain certain property dividends that may be declared on such shares. The acquisition of FPUC’s Meralco shares has increased the beneficial interest of Beacon in Meralco to 48.02%.
Core Earnings per share for 2011 increased to
PhP 0.21 from
PhP 0.18 in 2010.
Reported Net Income for 2011 was
PhP 2.0 billion compared with PhP1.4 billion in 2010.
Meralco
Meralco’s Consolidated Reported Net Income for 2011 of PhP13.2 billion increased by 37% compared with
PhP 9.7 billion in 2010. The higher Consolidated Reported Net Income was due to continued strong energy sales, lower interest charges and higher contributions from subsidiaries.
Consolidated Core Net Income for 2011, which excludes one-time, exceptional charges, amounted to
PhP 14.9 billion, a 22% improvement over the Core Net Income for 2010 of
PhP 12.2 billion. Basic earnings per share on reported net income amounted to
PhP 11.73 while Core Earnings per share was at
PhP 13.21.
Consolidated Core EBITDA amounted to P=26.8 billion, equivalent to a consolidated EBITDA margin on gross revenues of 10%.
Consolidated revenues, of which electricity accounted for 99% of the total, increased by 7% to
PhP 256.8 billion. The improvement was the result of the slightly higher volume of energy sold, increased transmission charges and the distribution rate adjustment implemented in January 2011, offset by lower generation, system loss and universal charges for most of 2011 .Total revenues from electricity sales for 2011 amounted to
PhP 254.0 billion, or 6% higher than the amount for 2010.
Total costs and expenses for 2011 amounted to
PhP 238.0 billion or 5% higher than 2010.
Consolidated free cash flow was
PhP 26.1 billion as at the end of 2011, attributable to liquidity and debt-management efforts.
At its meeting on 27th February 2012, Meralco’s Board of Directors approved cash dividends of
PhP 4.10 per share to shareholders of record as at 23rd March 2012, payable on 23rd April 2012. The cash dividend of
PhP 4.10 per share, which includes a look-back dividend per share of
PhP 2.65 per share, brings total cash pay-out to 70% of the Company’s 2011 Consolidated Core Net Income. Cash dividend payout is 43% higher compared with 2010. Additionally, Meralco’s Board of Directors also declared its entire common shareholdings in Rockwell Land Corporation as property dividend, to shareholders of record as at the same date, payable five days after the approval by the Securities and Exchange Commission of such property dividend.
Balance Sheet
The total stockholders’ equity of PCEV for 2011 increased to
PhP 25.8 billion compared with
PhP 23.8 billion at the end of 2010. PCEV is 99.5% owned by Smart Communications, Inc.
Voluntary Delisting
On 2nd November 2011, The PCEV Board of Directors authorized PCEV’s management to take such steps necessary for the voluntary delisting of PCEV from the Philippine Stock Exchange ("PSE”) in view of PCEV’s inability to meet the minimum free float of 10% and in accordance with the PSE Rules on Voluntary Delisting.
In a subsequent meeting on 2nd December 2011, PCEV’s Board of Directors created an independent committee to review and evaluate the tender offer to purchase the shares owned by the remaining minority shareholders representing 0.49% of the outstanding common stock of PCEV, which Smart, as the owner of 99.51% of the outstanding common shares of PCEV, is expected to conduct. The Board also appointed ING Bank N.V. as Independent Financial Advisor (IFA) to render the fairness opinion on Smart’s proposed tender offer.
On 20th February 2012, PCEV sent to its shareholders a notice of voluntary delisting and Smart’s intention to conduct a tender offer.
At a meeting held earlier, the IFA and members of the independent committee submitted their opinion that the tender offer price of
PhP4.50 per share proposed by Smart was fair and reasonable so far as the public shareholders of PCEV were concerned.
