Thursday, May 10, 2012

San Miguel looking to list energy unit, revitalize PAL


Business World Online
Posted on May 10, 2012 09:44:33 PM


DIVERSIFIED conglomerate San Miguel Corp. may revive plans to take its energy unit public this year, its president yesterday said, and is also looking to a quick return to profit for its newly acquired aviation business.

San Miguel’s Ramon S. Ang, in a chance interview on Tuesday, said the company remained interested in an initial public offering for SMC Global Power Holdings Corp.

"We will try if we can, who doesn’t want money?" Mr. Ang said in Filipino when asked if the listing could push through this year.

SMC Global Power President Alan T. Ortiz last November said IPO plans would be deferred amid volatile market conditions.

Mr. Ang, meanwhile, yesterday bared plans to boost the operations and profits of Philippine Airlines after San Miguel acquired a 49% stake in PAL Holdings, Inc., last month.

"We are confident that we will be able to turn around PAL within a year from our first investment," he told reporters following the annual stockholders’ meeting of San Miguel liquor unit Ginebra San Miguel, Inc.

PAL Holdings’ nine-month losses stood at P3.629 billion last year, a reversal of the P3.237 billion in net income recorded the previous year.

Mr. Ang said route additions and modifications were being considered, including a non stop Manila-to-New York flight pending the removal of the country’s Category 2 status -- indicating non-compliance with international safety standards -- imposed by the US-based Federal Aviation Administration.

Long-term plans for profitability include a "better ticket sale system" to bring down expenses and to improve yields, and increasing the daily aircraft usage from the current average of 10.5 hours per day to roughly 12 to 16 hours per day in a bid to reduce costs, Mr. Ang added.

He said PAL also hoped to close a deal for a five-year re-fleeting program.

"What we want to do is to close the deal as soon as possible for the 100 units we will order. Most of the new airplanes will replace the old airplanes, while others will be reserved for expansion," Mr. Ang said.

He said two Boeing 777-300ERs and eight Airbus 320s were expected to join the PAL fleet this year, having been previously purchased by the previous management.

Moving forward, Mr. Ang said he was confident that the public would again view the company with favor despite recent labor issues.

"PAL is a very good company and a very good brand. Despite all that it has been through, it seems many people still want to ride PAL again," he claimed.

San Miguel shares lost 0.44% to P113.50 yesterday from P114.00 on Wednesday. --Franz Jonathan G. de la Fuente and Cliff Harvey C. Venzon    source

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