The Market Monitor Minding the Nation's Business
By Riza Lozada
Listed PAL Holdings Inc. reported a nine-month profit of P2.96 billion, lower by 54.8 percent from a year ago.
Based on its unaudited interim consolidated financials, revenues from January to September totaled P85.35 billion, 3.5 percent higher from P82.48 billion in the same period last year.
The weaker peso against the US dollar brought positive results to PAL’s revenues.
Total operating expenses grew by 8.9 percent in the first nine months compared to last year’s P76.21 billion. PAL said expenses increased due to flight frequencies and new routes.
Higher maintenance services had the effect of increasing maintenance expenses to P10.78 billion or 31.4 percent higher than the year ago level.
Aircraft and traffic servicing expenses rose by 23.6 percent or P2.05 billion over the year ago level.
This was driven mainly by the increase in landing and take off fees as a consequence of more flights operated during the current period.
Reservation and sales increased to P5.97 billion or 24.1 percent higher than last year’s same period result due to higher advertising expenses and booking fees.
The increase in number of passengers carried and flights operated had the effect of increasing passenger service expenses by 19.6 percent.
Flying operations expense decreased by 0.4 percent over last year’s same period total of P45.34 billion mainly due to lower fuel cost.
Fuel expenses slid by 7.8 percent as a result of the average price per barrel to $65.90 in 2016 from $86.56 in 2015.
General and administrative expenses slightly increased by P28.9 million or one percent brought about mainly by the effect of the depreciation of the peso against the US dollar.
Payments of various long term obligations resulted to lower financing charges of P143.6 million or a reduction of 9.6 percent from the same nine-month period of 2015.
PAL recorded “Other income-net” increased by P1.25 billion or 110.7 percent in the current period brought about mainly by the decrease in unrealized market-market losses on outstanding fuel derivative instruments.
PAL’s “other comprehensive income” fell by P77.0 million for the nine months ending September 30 mainly due to the decline in net gains of foreign exchange translation.
Consolidated total assets amounted to P119.91 billion or 4.8 percent higher from the December 31, 2015 balance of P114.41 billion as the total noncurrent assets improved by P6.3 billion million or 7.6 percent from the December 31, 2015 balance of P83.14 billion.
Property and equipment increased by 8.3 percent with the pre-delivery payments made for the acquisition of A350 aircraft, purchase of a spare engine for B777 aircraft and acquisition of one A321 aircraft under finance lease.
Total current assets decreased by 2.5 percent from the December 31, 2015 figure of P31.26 billion resulting from “other current assets” balance down by 35.6 percent due to the effect of returned security deposits on fuel hedging transactions and the decrease in general and traffic receivables by 1.9 percent.
These were partially offset by the increase in cash and cash equivalents balance by 37.5 percent due to cash earnings generated from operations for the nine months of 2016.
Total liabilities increased by 2.4 percent from the December 31, 2015 balance of P104.27 billion due to the weaker peso.
Payments made for loans resulted to the drop in non-current liabilities to P49.84 billion from P51.94 billion as of December 31 last year.
Current liabilities amounted to P56.97 billion as of September 30, 2016, 8.9 percent higher than the December 31, 2015 balance of P52.33 billion mainly due to availment of short-term loans.
As of September 30, 2016, the consolidated stockholders’ equity balance amounted to P13.10 billion up by P2.97 billion or 29.2 percent from the December 31, 2015 balance of P10.14 billion.