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First Gen Corporation has completed the sale of a 60% stake in its natural gas business to Prime Infrastructure Capital Inc. for ₱50 billion, a landmark transaction that significantly strengthens the company’s financial position.

Under the deal, Prime Infra acquired controlling interests in the Santa Rita, San Lorenzo, San Gabriel, and Avion power plants, the proposed Santa Maria project, and the Batangas LNG Terminal. First Gen retains a 40% stake, ensuring continued participation in the gas platform while unlocking substantial liquidity.

Impact on Balance Sheet
The ₱50-billion inflow will boost First Gen’s cash reserves, making the parent company effectively debt-free after having prepaid its ₱20-billion loans earlier this year. The transaction also positions First Gen with a strong net cash position, enhancing flexibility for future investments in renewable energy projects.

Potential for Higher Shareholder Returns

With a debt-free parent and substantial cash inflows, First Gen is in a position to return more capital to shareholders. This could come in the form of higher dividends or even special payouts, subject to board approval and regulatory requirements. The transaction provides financial headroom for the company to balance reinvestment in renewables with rewarding its investors.

Debt Profile Transformation
Before the sale, First Gen’s consolidated long-term debt stood at $2.106 billion, largely concentrated in subsidiaries such as EDC and the gas plants. With the deconsolidation of 60% of gas-related loans (about $159 million) and LNG lease liabilities, consolidated leverage will drop significantly.

• Debt-to-equity ratio, previously at 0.86x, is expected to improve markedly.
• Interest-bearing debt obligations will decline, reducing financing costs and strengthening solvency metrics.

Strategic Outlook
First Gen will continue to report earnings from the gas business under the equity method, while redeploying capital toward geothermal, hydro, wind, and solar projects. “This partnership strengthens energy security and accelerates our transition to clean energy,” said First Gen Chairman and CEO Federico R. Lopez.

The deal underscores a strategic pivot: from heavy capital exposure in gas infrastructure to a more balanced portfolio focused on renewables, backed by a robust cash position and lower debt burden.

Three of the country’s leading food and beverage companies — San Miguel Food and Beverage Inc. (SMFB), Universal Robina Corporation (URC), and RFM Corporation — posted stronger results for the first nine months of 2025, signaling resilience despite cost pressures and shifting consumer dynamics.

SMFB Leads with Broad-Based Growth

SMFB delivered a 4.1% increase in consolidated revenues to ₱302.9 billion, while net income surged 10.8% to ₱33.7 billion. Growth was supported by all major segments: Food, Beer & Non-Alcoholic Beverages, and Spirits. The company also strengthened its balance sheet, reducing total liabilities to ₱187.2 billion and maintaining a hefty cash position of ₱62.4 billion. Dividend payouts totaling ₱2.00 per share year-to-date underscore confidence in sustained performance.

URC Maintains Stability Amid Margin Pressure

URC posted ₱124.6 billion in revenues, up 4.8% year-on-year, and net income of ₱9.03 billion, a 4.6% improvement. While gross margins eased to 26.5% due to higher coffee input costs, URC’s diversified portfolio — spanning branded consumer foods, commodities, and agro-industrial products — cushioned the impact. Strong financial metrics, including a gearing ratio of 0.19x and interest coverage of 14.4x, highlight its capacity to weather volatility.

RFM Delivers Quiet Strength

RFM reported ₱15.23 billion in revenues, up 1.8%, and net income of ₱1.25 billion, marking a 12.3% jump from last year. Cost discipline and lower general and administrative expenses supported profitability. Liquidity improved with a current ratio of 1.36x, while total liabilities fell to ₱8.67 billion, reinforcing financial stability.

Defensive Qualities in a Volatile Market

Analysts view SMFB, URC, and RFM as defensive plays in the Philippine equity market. Their core businesses — food staples, beverages, and packaged goods — cater to essential consumer demand, which tends to remain stable even during economic slowdowns.

• SMFB benefits from a diversified portfolio across food and alcoholic beverages, ensuring steady cash flows and dividend payouts.
• URC’s strong presence in branded snacks and beverages, coupled with commodity operations, provides a natural hedge against input cost swings.
• RFM, with its focus on pasta, milk, and ice cream, serves everyday consumption needs, making it less vulnerable to discretionary spending cuts.

These companies combine consistent earnings, robust balance sheets, and high liquidity, positioning them as attractive options for investors seeking stability amid inflationary pressures and global uncertainty.

SM Investments Corporation (SMIC) reported consolidated revenues of ₱482.3 Billion for the nine months ended September 30, 2025, up 4.3% from last year, while net income after tax rose 5.6% to ₱88.8 Billion, according to its latest SEC filing. Net income attributable to the parent reached ₱64.4 Billion, driven by strong contributions from banking and property segments.

Retail, which accounts for 66% of revenues, posted ₱318.1 Billion in sales and ₱12.2 Billion in net income. However, management flagged margin pressure from frequent flooding in Q3 and promotional activity in sports and athleisure categories. Merchandise inventories climbed to ₱47.9 Billion, raising concerns over potential markdowns if consumer demand softens.

Property arm SM Prime delivered ₱103.4 Billion in revenues and ₱37.2 Billion in net income, supported by mall rental growth of nearly 7%. Still, residential sales slipped 2% amid slower revenue recognition, while capital expenditures surged to ₱59 Billion year-to-date, part of a ₱100 Billion full-year budget. Construction-in-progress now stands at ₱160.8 Billion, with ₱40.7 Billion in outstanding contractor commitments.

Banking associates BDO and China Bank remain SMIC’s profit engine, contributing ₱39.1 Billion in equity earnings—around half of consolidated net income. Portfolio investments added ₱4.5 Billion, though Philippine Geothermal Production Company saw a 16% revenue drop due to lower steam prices pegged to WESM.

Buyback Program: Boost for Valuation, Strain on Liquidity?

In February, SMIC launched a ₱60 Billion share buyback program, repurchasing 3.7 Million shares at an average price of ₱764.08, totaling ₱2.8 Billion as of September. The move signals confidence and could support share price by reducing supply and lifting earnings per share, which rose to ₱52.73 year-to-date.

Analysts note, however, that the buyback coincides with declining cash reserves—₱85.8 Billion, down 24% from year-end—and hefty near-term debt maturities of ₱126 Billion. “The program is positive for valuation, but balancing shareholder returns with liquidity and refinancing needs will be critical,” one market strategist said.

Debt and Liquidity

SMIC’s interest-bearing debt climbed to ₱511.4 Billion, while the current portion of long-term debt rose to ₱126 Billion. Despite this, leverage ratios remain stable, with a current ratio of 1.1x and interest cover at 8.6x.

Outlook

Management expects continued expansion in retail and property, with SM Prime targeting ₱100 Billion in capex for malls, residential projects, and integrated developments. However, risks loom from residential sales timing, banking sector dependency, and liquidity pressures amid aggressive capital allocation.