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  • FLI’s Two‑Track Story: Gains on the Ground, Rates in the Rear‑View

    FLI’s Two‑Track Story: Gains on the Ground, Rates in the Rear‑View

    Filinvest Land, Inc. (FLI) has quietly stitched together a steady nine‑month performance that looks better beneath the surface than its modest headline growth might suggest. Yet the same report, which shows improving revenue, cash generation, and liquidity, also flags the familiar headwinds of higher financing costs and execution risk that could trip up momentum if conditions turn. Here’s the balanced read investors should care about—what’s getting better, and what could potentially derail the story. 

    What’s getting better

    1) Dual‑engine revenue: development + leasing both up.
    FLI’s consolidated revenue rose 7.9% to ₱18.99 billion for the nine months ended September 30, 2025, with real estate sales up 8.2% to ₱12.86 billion and rental & related services up 7.3% to ₱6.13 billion. The sales mix remains anchored in medium‑income housing (71%), while affordable/low segments (17%) widened their share—useful ballast when the market tilts toward value. Leasing gains came from higher occupancy and contractual escalations; even the co‑living pilot (The Crib Clark) added incremental pesos.

    2) Earnings drift higher with resilient margins.
    Net income improved 5.0% to ₱3.64 billion; EPS ticked up to ₱0.14 (from ₱0.13). Under the hood, computed gross margins held sturdy—about 52% in real estate and 51% in leasing—despite cost inflation and a heavier depreciation footprint from asset additions. That margin resilience is the critical “quality” signal in a build‑and‑lease model.

    3) Operating cash flow and cash reserves strengthened.
    Operating cash flow climbed 5.1% to ₱7.09 billion, while cash & equivalents nearly doubled (+89.6%) to ₱7.55 billion. A lighter investing outflow—thanks to tempered net capex and larger dividends received from associates—helped the cash balance. In a rate‑heavy world, more cash on hand means more options.

    4) Liquidity ratios improve—more near‑term cushion.
    The current ratio rose to 3.07× (from 2.78× at year‑end 2024) and the quick ratio to 0.81× (from 0.71×). When maturities cluster, and contractors queue up for payments, these buffers matter—a lot.

    5) Collections and working capital discipline show up in the numbers.
    Other receivables fell by 7.3%, reflecting better tenant collections and liquidation of advances; expected credit losses remain modest. Contract assets declined 9.7%, which management ties to a higher percentage completion across projects—an indicator that work‑in‑progress is converting toward billable/saleable stages.

    6) Associates contribute more—and in cash.
    Equity in net earnings of associates jumped 48% to ₱371.7 million, and dividends received rose to ₱289.4 million (from ₱106.0 million)—a welcome auxiliary stream that diversifies cash sources beyond unit transfers and rental billings.

    7) Recurring platform scaled via the REIT.
    The Festival Mall – Main Mall property‑for‑share swap lifted FLI’s stake in Filinvest REIT Corp. (FILRT) to roughly 63%. The transaction (SEC valuation approved on May 27, 2025) underscores FLI’s capital‑recycling playbook: seed the REIT with stabilized assets, free up growth capital, and lean into recurring income through the platform.

    8) Pipeline depth: investment properties up; new retail underway.
    Investment properties (NBV) rose to ₱87.02 billion; fair value indications stand near ₱215.34 billion (Level‑3 appraisal). Retail projects in Cubao and Mimosa are under construction—future anchors that can compound footfall and lease yields if delivered on time and on budget.

    9) Shareholder cash is still visible.
    A ₱0.05 common dividend (paid in May 2025) equated to a ~6.1% trailing yield on the ₱0.82 closing price as of September 30, 2025; the company’s reported P/E sat at 4.34×—low enough to make the carry look compelling, provided coverage metrics stay healthy.

    What could derail the story?

    1) Financing costs: the gravity that never sleeps.
    Interest & finance charges rose 18.8% to ₱3.14 billion. Coverage ratios edged down (EBITDA/interest 1.91×; EBIT/interest 2.38×). With ₱6.72 billion in bonds and ₱11.23 billion in loans maturing within 12 months (total ~₱17.95 billion), repricing risk is non‑trivial: tighter liquidity or wider spreads could bite into earnings and dividend headroom. FLI’s debt‑to‑equity ≈ 0.88× is comfortably within covenants (max 2.0–2.5×), but the direction of travel matters as much as the level. 

    2) Sales velocity and inventory turns.
    Real estate inventories rose to ₱73.33 billion (+4.8%). If buyer affordability weakens or cancellations tick up, inventory clears slower, cash conversion stalls, and carrying costs pile on. Receivable ageing shows meaningful “past‑due but not impaired” buckets—collections need to stay tight to keep momentum real, not just reported. 

    3) Leasing margin compression risk.
    Leasing revenue grew, but cost of rental services grew faster (+10.2%), propelled by depreciation on new builds and operating costs. If occupancy dips or escalations soften while opex keeps climbing, today’s ~51% gross margin in leasing can erode quickly. The retail pipeline is promising, but pre‑leasing discipline and tenant mix will determine how accretive those projects really are. 

    4) Execution complexity across a wide map.
    From Filinvest City to Cebu SRP, Clark Mimosa, and New Clark City, FLI manages multi‑site construction and leasing with varied regulatory pathways and counterparties (including BTO and long‑term leases). Delays, cost overruns, or contractor bottlenecks can ripple through the P&L and push out cash timelines. 

    5) Macro & policy overhangs.
    Higher rates, build‑cost inflation, or shifts in housing policy (including socialized housing thresholds) would amplify the pressures above. As a REIT sponsor, FLI also carries ongoing reinvestment and reporting obligations—non‑compliance isn’t the base case, but it’s a governance tripwire worth monitoring. 

    The bottom line

    FLI’s 2025 nine‑month tape shows a business doing the right things: growing both development and leasing, protecting margins, and strengthening liquidity—while smartly using the REIT to recycle capital. But the rate cycle is the villain in this play: financing costs are up, coverage ratios are thinner, and near‑term maturities mean execution and treasury strategy must stay sharp. If sell‑through holds and leasing stays firm, the math still works; if either wobbles while rates stay stubborn, the dividend and expansion pace could be tested. 

    What to watch next quarter

    • Coverage ratios: Aim for EBITDA/interest >2.0×; a sustained slip below that line raises caution.
    • OCF vs. cash commitments: Keep operating cash flow ≥ (capex + dividends) to avoid creeping dependence on debt.
    • Sell‑through & cancellations: Affordable/MRB projects should keep cycle times short; any elongation is a red flag.
    • Pre‑leasing & occupancy: Verify that new retail/office assets land anchor tenants early—and at rents that defend margins.
    • Covenant headroom: D/E, current ratio, DSCR—trend matters as much as absolute levels. 

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  • What it will take for DITO to break even

    What it will take for DITO to break even

    By any reasonable yardstick, DITO is still far from break‑even. But the path is not unknowable—it’s arithmetic, capital discipline, and execution. The company’s 3Q25 filing lays out the challenge in stark numbers: nine‑month net loss of ₱24.93B, EBIT (operating loss) of ₱9.73B, and EBITDA of ₱1.565B—up 112% year‑on‑year, yet nowhere near enough to absorb heavy depreciation (₱11.47B), interest (₱12.82B) and FX losses (₱2.23B). On that math, DITO would need roughly ₱26–27B of EBITDA over nine months—or ~₱35–36B annualized—to hit net break‑even today. 

    Scale the cash engine—fast, and with margin integrity.
    No telco breaks even on hope; it breaks even on EBITDA. With nine‑month revenues at ₱14.9B and an EBITDA margin of ~10.5%, the cash engine is underpowered. The first lever is scale and margin: push data monetization (already 86% of service revenue) while rebuilding ARPU (mobile blended down to ₱100, FWA up modestly to ₱306). Even at a healthier 25–30% EBITDA margin—more typical for mature operators—the company would still need ₱90–120B in annual revenue to generate ₱22–36B of EBITDA, the minimum needed to neutralize fixed charges. That implies aggressive growth in consumer data, enterprise connectivity, and wholesale (carrier) lines, plus disciplined promo management to prevent volume from cannibalizing yield. 

    Make finance costs smaller—or fewer.
    The second lever is the price of money. Nine‑month interest expense of ₱12.82B—largely tied to US$3.241B and CNY2.561B drawn on project‑finance facilities—remains the single biggest drag after depreciation. Two paths help: (1) Refinance and repricing where possible (SOFR and LPR resets, margin negotiation) and (2) deleverage through primary equity and asset monetization. DITO has a Subscription Framework with Summit Telco to subscribe up to 9B primary shares; execution speed and terms will matter more than headlines. Parallel moves—tower sale‑leasebacks, partial fiber IRU monetization, and selective disposal of non‑core assets—can chip away at principal and lower interest, even if lease expense rises. The net objective is a multi‑billion‑peso annual reduction in interest payments to narrow the break‑even gap.

    Tame the currency roller-coaster

    DITO’s FX sensitivity is enormous: a ~9.7% move in USD/₱ shifts loss before tax by ±₱19.4B; a ~9.2% move in CNY/₱ shifts it by ±₱7.0B. FX losses already ran ₱2.23B in 9M25. That volatility is too significant to leave unmanaged. The company needs a formal, disclosed hedging policy—currency swaps or forwards aligned to semi‑annual interest and principal amortization calendars, plus natural hedges from USD/CNY-denominated costs and (where viable) revenues. Hedging won’t create profit, but it will stop FX from destroying operating gains. 

    Keep capex lean; keep sites lit.
    Post‑audit, capex dropped 76% YoY to ₱2.475B in 9M25. That restraint is welcome, but it cannot come at the cost of performance; the installed base still demands maintenance (₱2.70B) and utilities (₱2.15B) over nine months. The capex rule of thumb now is: spend only where it lifts EBITDA per site—densification that raises throughput in revenue‑rich pockets; enterprise builds with contracted returns; and upgrades that cut energy or maintenance per bit carried. That is how asset intensity turns into margin, not just footprint. 

    Work the P&L: opex trim without starving growth.
    GS&A rose 18% to ₱12.03B. Some lines must keep rising (network ops), but several can be bent: advertising was prudently down 35%; outside services were flat; yet taxes & licenses (+42%) and parts of repairs (+29%) warrant a deeper review—contract re‑cuts, shared services, automation in field ops, and energy optimization programs (smart cooling, solar hybrids) at base stations. Every ₱1B trimmed from opex is ₱1B closer to EBITDA levels that make break‑even plausible. 

    Fix the liquidity optics—then the substance.
    The optics are brutal: current ratio ~0.06x (₱6.08B current assets vs ₱96.12B current liabilities), total liabilities ₱304.65B, and capital deficiency ₱95.31B. Management itself discloses material uncertainty on going‑concern, citing undrawn portions of project finance and shareholder support as mitigants. Break‑even will not arrive without first de‑risking liquidity—locking in the undrawn facilities, terming out near‑dated trade/lease payables, converting portions of accrued project costs to longer‑tenor instruments, and most critically, closing equity infusions to rebuild the cushion. Markets reward certainty; paperwork in progress doesn’t pay interest. 

    Price, product, and partners: grow smarter.
    Two commercial pivots can raise EBITDA productivity per subscriber:

    • Price discipline—dial back deep free‑data promos, steer to tiered bundles with speed/latency guarantees for prosumers and SMEs; protect ARPU creep without choking gross adds.
    • Partnerships—expand MVNOs, campus and enterprise programs (already lifting carrier/enterprise revenue), and bundle OTT/video‑gaming that drives high‑margin nighttime traffic. More enterprise SLAs and wholesale carriage contracts mean stickier, forecastable EBITDA. 

    A reality check on timelines.
    Even with momentum—revenues +25%, EBITDA +112%, capex normalized—DITO is not “near” break‑even on earnings or fully‑loaded cash. Operating cash inflow (₱3.81B) was offset by capex and finance/lease payments, leaving cash down ₱416M for 9M25 and ₱763M on hand at period end (with ~₱558M pledged as collateral). The journey to earnings break‑even will be measured not in quarters but in EBITDA multiples, interest reductions, and FX stability achieved. Investors should benchmark progress against three quarterly scorecards: (1) EBITDA run‑rate (targeting ₱8–10B annual within 12–18 months), (2) interest/FX drag (cut by at least ₱3–5B p.a. via refinancing, hedging, and deleveraging), and (3) liquidity coverage (current ratio >0.5x via executed equity and extended vendor terms). Anything less, and break‑even remains theoretical. 

    The bottom line:
    Break‑even is not a mystery. It is the sum of bigger, higher‑margin EBITDA, smaller, cheaper debt, and less currency noise—backed by hard, executed capital. DITO’s network quality and subscriber growth are real strengths; now the company must turn them into cash at a pace that outstrips depreciation, interest, and FX. In telco finance, gravity always wins; DITO’s task is to lighten the load and power the engine—quickly.

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  • ABS-CBN Faces Financial Crisis as TV5 Exits Over ₱1B Dispute: Why Lopez Group Must Use Its ₱50B Windfall to Rescue Its Media Flagship

    ABS-CBN Faces Financial Crisis as TV5 Exits Over ₱1B Dispute: Why Lopez Group Must Use Its ₱50B Windfall to Rescue Its Media Flagship

    TV5’s termination of its partnership with ABS-CBN over a ₱1 billion payment demand exposes deep financial cracks. With ₱13 billion in payables and cash reserves down to ₱718 million, the Lopez Group must act fast—using its ₱50 billion windfall from First Gen’s sale to Enrique Razon—to prevent a collapse that could damage its entire credit reputation.

    When TV5, backed by the Manny Pangilinan group, pulled the plug on its partnership with ABS-CBN and demanded a ₱1 billion payment, it wasn’t just a broken deal—it was a warning shot. A signal that the financial cracks in ABS-CBN are widening, and the tremors could shake the entire Lopez Group.

    The numbers are stark: ABS-CBN’s SEC filing shows ₱13 billion in trade and other payables, a ₱11 billion working capital deficit, and cash reserves down to ₱718 million. These aren’t minor hiccups—they’re existential threats. When a major partner like TV5 walks away over unpaid obligations, others will take notice. Talent agencies, event venues, content licensors—they could all demand immediate settlement. If that domino effect begins, ABS-CBN’s operational lifeline could snap.

    Here’s the irony: the Lopez Group is sitting on a ₱50 billion windfall from the sale of its natural gas assets under First Gen Corp. to Enrique Razon’s Prime Infra. That deal was hailed as a strategic pivot to renewables. But what good is a green future if the flagship media arm collapses today? Deploying even a fraction of that windfall—₱10 to ₱15 billion—could stabilize ABS-CBN, clear critical payables, and restore partner confidence.

    And here’s the urgency: declare a portion of that windfall as dividends to First Philippine Holdings (FPH). Why? So FPH can acquire ABS-CBN outright and inject fresh capital to fix its battered finances. This isn’t just about saving a network—it’s about protecting the Lopez Group’s credit reputation. Letting ABS-CBN be hounded by creditors, suppliers, and banks will tarnish the group’s standing in the financial community. For a conglomerate that relies heavily on bank financing for power and infrastructure projects, that’s a risk too costly to ignore.

    This is no longer about pride or politics. It’s about survival. The Lopez Group must act decisively. Upstream the funds. Shore up ABS-CBN’s balance sheet. Send a message to partners and creditors: we pay our bills, we honor our commitments, and we protect our brands.

    Because in business, perception is reality. And right now, reality is screaming for leadership.

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  • ERC Greenlights ₱90-B Grid Link: DMCI Power Faces Strategic Crossroads, SGP Gains from Transmission Push

    ERC Greenlights ₱90-B Grid Link: DMCI Power Faces Strategic Crossroads, SGP Gains from Transmission Push

    The Energy Regulatory Commission (ERC) has approved the National Grid Corporation of the Philippines’ (NGCP) ₱89.98-billion Batangas–Mindoro 500-kilovolt interconnection and backbone project, a landmark initiative that will connect Mindoro to the Luzon grid and reshape the island’s power dynamics.

    Under the ERC directive, Stage 1 of the project must be completed by September 30, 2027, with Stage 2 targeted for December 31, 2030. Once operational, Mindoro will cease to be an off-grid missionary area, enabling access to cheaper and more stable electricity from the national grid.

    Impact on DMCI Power

    DMCI Power, the exclusive off-grid supplier in Oriental Mindoro, currently serves the province through diesel and bunker plants under long-term contracts. In 2024, the company sold 104.8 GWh in Mindoro, generating an estimated ₱1.62 billion in revenue at an average tariff of ₱15.5/kWh.

    Analysts warn that the interconnection will erode DMCI Power’s competitive advantage:

    • Luzon grid rates (₱5–₱7/kWh) could displace DMCI’s high-cost generation.
    • Contract renegotiations or non-renewals are likely post-2027.
    • Existing plants risk becoming stranded assets unless repurposed for backup or renewable integration.

    Why It Benefits SGP

    Synergy Grid & Development Phils., Inc. (SGP), the holding company of NGCP, stands to gain from this development. The Batangas–Mindoro link is part of NGCP’s 2025–2050 Transmission Development Plan, aimed at strengthening and expanding the national grid. For SGP:

    • Regulated returns: Transmission projects earn stable, regulated revenues under ERC-approved tariffs.
    • Long-term growth: The ₱90-billion investment adds to NGCP’s rate base, boosting future earnings.
    • Strategic positioning: Enhances NGCP’s role in grid modernization and reliability, reinforcing SGP’s value proposition to investors.

    Investor Takeaway

    For DMCI Power, the project signals a structural shift: earnings from Oriental Mindoro will remain stable until 2027 but face steep declines thereafter. For SGP, the interconnection project is a growth catalyst, underpinning its regulated revenue model and long-term expansion strategy.

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  • Price Update: Dao, Tagbilaran City Property from 2.5 M to 2.2 M

    Price Update: Dao, Tagbilaran City Property from 2.5 M to 2.2 M

    PRICE DROP ALERT – Don’t Miss This Opportunity!

    Great news for property seekers and smart investors! This property is now available at a reduced price of ₱2,200,000, down from the original ₱2,500,000; that’s a ₱300,000 savings!

    Why this property is the best deal:

    ✅ Lower investment cost
    ✅ Higher value for your money
    ✅ Perfect for end-users and investors
    ✅ Limited-time opportunity

    Ideal for:
    • Boarding House
    • Apartment
    • Rental House

    Accessibilities:
    • 3.1 km to Island City Mall – 7 mins
    • 4.2 km to Holy Name University (HNU) – 9 mins
    • 3.4 km to Task Us Bohol – 8 mins
    • 3.4 km to Task Us Bohol – 8 mins

    Secure your desired property at a better price while it’s still available.
    📩 Message us today at facebook.com/accuretti or call us 09175555847

  • Hyper Dynamic’s Calculated Buying: A Cushion for JFC’s Market Volatility

    Hyper Dynamic’s Calculated Buying: A Cushion for JFC’s Market Volatility

    Hyper Dynamic Corporation, Jollibee Foods Corporation’s (JFC) largest shareholder, has been quietly executing a series of open-market purchases that speak volumes about its confidence—and its strategy. From 41.65% ownership in June to 43.29% by December, Hyper Dynamic’s stake grew through incremental trades, not blockbuster deals.

    The Numbers Tell the Story:

    • August 5–6: Hyper Dynamic acquired 32,000 shares at prices between ₱216.00 and ₱218.20, lifting its holdings past 43.27%.
    • August 26: Another 15,000 shares bought at ₱229.80–₱230.80, pushing ownership to 485.05 million shares.
    • December 2: Three trades totaling 11,000 shares at ₱187.50–₱187.90, cementing its position at 43.29%.

    These purchases occurred during periods of price softness, suggesting opportunistic timing. For investors disillusioned by JFC’s ambitious global expansion and margin pressures, Hyper Dynamic’s steady buying provided a liquidity backstop. Sellers found a willing counterparty, preventing sharp declines that could have rattled market confidence.

    Strategic Implications:
    Hyper Dynamic’s actions are not mere portfolio adjustments—they reinforce control. By consolidating its grip, the founding stakeholders signal long-term commitment, even as short-term sentiment wavers. This dual effect—market support for exiting investors and governance stability for JFC—positions Hyper Dynamic as both a stabilizer and a consolidator of power.

    For minority shareholders, the message is clear: while growth pains persist, the largest insider is betting on recovery. Whether this translates into improved fundamentals remains to be seen, but for now, Hyper Dynamic’s buying spree is the quiet force keeping JFC’s stock from unraveling.

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  • Price Drop in Dao, Tagbilaran City: Now ₱2.2M Only!

    Price Drop in Dao, Tagbilaran City: Now ₱2.2M Only!

    PRICE DROP ALERT – Don’t Miss This Opportunity!

    Great news for property seekers and smart investors!

    This property is now available at a reduced price of ₱2,200,000, down from the original ₱2,500,000; that’s a ₱300,000 savings!

    Why this property is the best deal:

    ✅ Lower investment cost
    ✅ Higher value for your money
    ✅ Perfect for end-users and investors
    ✅ Limited-time opportunity

    Secure your desired property at a better price while it’s still available.
    📩 Message us today for full details, site viewing, and reservation at fb.com/accuretti or call us at 09175555847

  • DoubleDragon’s Balancing Act: Growth on Paper, Pressure in Cash

    DoubleDragon’s Balancing Act: Growth on Paper, Pressure in Cash

    DoubleDragon Corporation’s latest quarterly filing paints a picture of ambition—and exposure. On the surface, the numbers sparkle: revenues surged 63% year-on-year to ₱10.5 billion for the first nine months of 2025, powered by real estate sales and steady rental streams. Net income held at ₱2.55 billion, barely up from last year, but enough to keep the optics positive.

    Scratch deeper, and the sheen dulls. Nearly 42% of that revenue came from unrealized fair value gains and tenant penalties—items that look good in a report but don’t pay the bills. Strip those out, and the core engine—rent and hotel operations—struggles to cover a ballooning interest tab. Financing costs doubled to ₱2.39 billion, and in the third quarter alone, they wiped out profits for common shareholders, leaving the parent with a ₱47.7 million loss.

    The balance sheet tells its own story: net debt hovers near ₱86 billion, cushioned by equity of ₱101 billion. Bonds issued this year lock in rates north of 7%, some as high as 9.5%, ensuring that interest pressure won’t ease soon. Operating cash flow? Deep in the red at negative ₱7.93 billion, offset only by ₱9 billion in fresh financing. Liquidity ratios look healthy on paper, but the reliance on debt markets is a vulnerability in any tightening cycle.

    Receivables ballooned to ₱21.8 billion, with impairment provisions climbing. Penalty income—₱2.5 billion so far—suggests tenants are paying late. Good for accounting, bad for cash. Add to that the execution risk of Hotel101’s global rollout and the long-promised industrial REIT, and you have a company juggling growth narratives with hard realities.

    To be fair, DoubleDragon is asset-rich and opportunistic. Investment properties rose to ₱169.6 billion, and its REIT arm continues to spin off dividends. But the question for investors is simple: can recurring cash flows catch up with the financing load before the next refinancing cycle? If leasing momentum and hotel pre-sales deliver, the story holds. If not, the cracks widen.

    For now, DoubleDragon remains a case study in modern property playbooks—leveraged growth, valuation-driven earnings, and a race against time to turn paper gains into hard cash. Watch the interest coverage ratio, operating cash flow, and receivables aging. In this game, liquidity isn’t just a metric—it’s survival. 

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  • Margins Diverge as Philippine Food Majors Face Cost Crosswinds

    Margins Diverge as Philippine Food Majors Face Cost Crosswinds

    SMFB widens profitability; CNPF and MONDE see compression; URC nudged lower; RFM holds firm despite cash flow squeeze

    The Philippines’ leading packaged food and beverage players posted mixed margin outcomes in their nine‑month 2025 results, highlighting how input-cost volatility, pricing discipline, and working‑capital choices are reshaping profitability across the sector. Sales growth was broadly positive, but margin trajectories diverged: San Miguel Food and Beverage (SMFB) expanded margins; Century Pacific Food (CNPF) and Monde Nissin (MONDE) saw compression; Universal Robina Corp. (URC) edged lower; and RFM Corp. preserved healthy margins while absorbing a hit to operating cash flows.

    Sales: Mid‑single to high‑single digit growth, with branded segments leading

    SMFB’s consolidated revenues rose 4% to ₱302.9 billion on resilient demand and brand execution across food, beer, and spirits—food up 7%, spirits up 7%, beer steady—supporting scale benefits into the third quarter. Management underscored supply chain productivity and capacity expansion as margin enablers alongside revenue momentum. 

    URC delivered ~5% top‑line growth (TTM revenue ₱166.1 billion), propelled by snacks and ready‑to‑drink beverages domestically and stronger performance from Munchy’s in Malaysia and Indonesia. However, elevated coffee input costs—still roughly twice 2023 levels—tempered EBIT expansion, setting the stage for margin pressure despite volume gains.

    CNPF’s sales grew 8% to ₱61.8 billion, with the branded portfolio up 12% and OEM exports recovering after a soft first half. Management flagged “all‑weather” staples demand, easing inflation (notably rice), and brand investments as the primary growth drivers into Q3, where quarterly revenue accelerated 15% year‑on‑year.

    Monde Nissin posted 3.5% growth to ₱63.3 billion, anchored by APAC Branded Food & Beverage (BFB) up 4.4% year‑to‑date, while meat alternatives contracted 3.9% on a constant‑currency basis. The company cited biscuits and “others” categories as domestic volume pillars and guided to sequential BFB margin improvement heading into 4Q25–2Q26.

    RFM recorded 1.8% sales growth to ₱15.23 billion, indicative of flat-to-steady demand in pasta, milk, flour, buns, and ice cream JV products. Despite modest revenue growth, management reiterated its confidence in a stronger fourth quarter driven by category momentum and historical seasonality.

    Margins: SMFB expands; CNPF and MONDE compress; URC softens; RFM resilient

    SMFB: Group profitability improved, with EBITDA up 13% to ₱58.4 billion and overall margins widening to 19%. Margin gains were attributed to cost and operational efficiencies across divisions, most notably in food and spirits, with disciplined pricing underpinning resilience against weather‑related disruptions.

    URC: Gross margin around 26.1% on a trailing basis, below FY2024’s ~27.0% and the company’s five‑year average (~27.7%), reflecting persistent coffee cost inflation and normalization across commodities. Management acknowledged EBIT pressure in the Philippines, partially offset by overseas scale and cost programs, implying modest margin decline versus last year despite top‑line strength. 

    CNPF: Gross margin compressed by 110 bps to 25.5% year‑to‑date, driven by normalizing input costs after a period of favorable commodity tailwinds. Notably, operating expenses fell 90 bps as a share of sales, cushioning the margin squeeze and allowing net income to grow 10% to ₱5.8 billion. 

    Monde Nissin: Consolidated gross margin declined 160 bps to 33.3% for nine months, with edible oil inflation weighing on APAC BFB even as sequential margin recovery emerged on pricing actions and reformulation. Meat alternatives posted gross margin improvement and EBITDA positivity, but the segment’s revenue contraction offset group‑level gains, resulting in overall margin decline year‑to‑date.

    RFM: Margins remained strong despite flat sales—EBITDA of ₱830 million, implying an EBITDA margin of ~15.2%—as lower selling and marketing expenses and lean G&A lifted operating margin to ~11.2%. While the company did not report year‑on‑year basis‑point changes, commentary and segment detail point to a stable-to‑improving margin mix led by consumer products.

    Operating Cash Flow: Strength for MONDE and URC; strain at RFM; SMFB and CNPF steady

    Monde Nissin reported ₱8.7 billion operating cash flow in the period, supported by lower operating costs in meat alternatives, foreign‑exchange tailwinds, and targeted pricing in APAC BFB, even as edible oils remained a drag on gross margins. URC likewise showed solid cash generation (TTM operating cash flow ₱12.86 billion), underpinned by working‑capital normalization across branded and commodities businesses.

    RFM’s operating cash flow fell sharply to ₱141 million from ₱1.3 billion a year ago, largely due to inventory buildup (over ₱1 billion) and reduced payables, which tightened liquidity despite sound income statement margins. Management emphasized inventory normalization and cash discipline as fourth‑quarter priorities. 

    SMFB highlighted a solid financial position—with sustained earnings power and prudent capital management—but did not disclose detailed nine‑month OCF figures. CNPF continued to invest in strategic growth (plant‑based and coconut operations) while maintaining low leverage and healthy liquidity metrics, reinforcing cash resilience despite gross margin compression. 

    Balance Sheets: Liquidity cushions intact; leverage disciplined

    SMFB’s disclosures show total consolidated debt of ₱ 187.2 billion as of September 30, 2025, balanced by robust earnings and margin expansion across key segments, providing flexibility for capacity investments and brand support. 

    URC’s financials reflect a strong asset base and conservative leverage, with ongoing margin headwinds from coffee mitigated by international scale and cost controls; CNPF maintains a current ratio of ~2.0 and a debt‑to‑equity ratio of ~0.24, indicating prudent gearing. 

    Monde Nissin maintains a net cash position (₱11.2 billion), a current ratio of 2.34, and minimal debt, reinforcing flexibility to sustain dividend payouts and fund margin‑restoration initiatives in APAC BFB. RFM also sits on net cash with current ratio ~1.36, though the nine‑month working‑capital swing is a near‑term watch‑item.

    Bottom Line: Five companies, five margin paths

    • SMFB stands out for margin expansion via cost discipline and pricing, despite weather and input‑cost noise. 
    • URC delivers volume‑led growth but faces slightly lower gross margin amid elevated coffee costs. 
    • CNPF sustains double‑digit profit growth even as gross margin compresses on commodity normalization.
    • Monde Nissin shows sequential margin recovery but a year‑to‑date decline, with edible oils the main headwind and meat alternatives improving.
    • RFM maintains strong margins but must rebuild operating cash flow after a working‑capital drawdown. 

    Investor lens: Expect continued focus on pricing, mix, and cost programs to protect margins, with working‑capital discipline (especially inventories and payables) a differentiator into year‑end. Companies with net cash and low leverage (Monde, RFM, CNPF) retain optionality for dividends and capex, while scale players (SMFB, URC) leverage brand strength to buffer input volatility.

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  • Century Pacific Food Posts Solid Q3 Growth, But Working Capital and Margin Pressures Loom

    Century Pacific Food Posts Solid Q3 Growth, But Working Capital and Margin Pressures Loom

    Century Pacific Food, Inc. (PSE: CNPF), one of the country’s leading branded food manufacturers, reported strong third-quarter results, with consolidated revenues and earnings accelerating on the back of robust branded segment growth. However, the company faces emerging financial and operational risks tied to margin compression, working capital strain, and export volatility.

    Earnings Surge Amid Branded Segment Strength

    For the nine months ended September 30, 2025, CNPF posted ₱61.79 billion in revenues, up 8.5% year-on-year, while net income rose 9.6% to ₱5.78 billion. Earnings per share climbed to ₱1.63 from ₱1.49 last year.
    Third-quarter performance was even stronger, with revenues jumping 14.9% to ₱22.07 billion and net income up 14.8% to ₱1.89 billion, signaling accelerating momentum in branded categories such as marine, meat, and dairy.

    Management attributed the gains to double-digit volume growth in branded products and improved consumer purchasing power amid stable inflation. Meanwhile, OEM exports (tuna and coconut) softened by 5% year-to-date but showed signs of recovery in Q3 as global trade conditions stabilized.

    Risk Areas Identified

    Despite the upbeat earnings, the report reveals several vulnerabilities that investors should monitor:

    1. Working Capital Pressure
      • Trade receivables surged 30% to ₱13.95 billion, while advances to suppliers more than doubled (+118%).
      • Operating cash flow fell sharply to ₱2.97 billion from ₱4.87 billion last year, reflecting heavier working capital requirements.
    2. Margin Sensitivity
      • Gross margin contracted 110 basis points to 25.5%, driven by higher input costs.
      • While operating expenses were trimmed to offset some pressure, commodity price volatility and FX risk remain key threats.
    3. OEM Export Volatility
      • Tuna and coconut exports declined 5% year-to-date, exposing CNPF to global trade uncertainties and demand cycles.
    4. Debt Maturity Concentration
      • Short-term notes payable ballooned to ₱4.02 billion from ₱200 million, with ₱4.0 billion due within 12 months.
      • Although gearing remains low at 0.19x, refinancing risk could rise if liquidity tightens.
    5. Inventory Build-Up
      • Inventories climbed nearly 9% to ₱20.24 billion, extending the cash conversion cycle to 80 days, which could increase exposure to obsolescence and price swings.

    Capital Allocation and Outlook

    CNPF declared ₱1.10 per share in dividends (₱0.55 regular and ₱0.55 special), representing a 61% payout ratio. Capital expenditures reached ₱2.2 billion, including plant upgrades and the acquisition of U.S.-based plant-based brand Loma Linda, reinforcing its health and wellness portfolio.

    Looking ahead, management will need to balance growth investments with tighter working capital discipline and margin protection. The company’s ability to manage input cost volatility, normalize cash flows, and sustain branded momentum will be critical as it navigates global trade uncertainties and domestic inflation risks.

    Bottom Line: Century Pacific Food delivered strong Q3 earnings and revenue growth, but rising working capital needs, margin compression, and short-term debt obligations underscore the importance of disciplined financial management in the coming quarters.

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