HI earns P26.2M in Q1

June 4, 1998 PSE CIRCULAR FOR BROKERS NO. 1248-98 HI earns P26 . 2M in Q1 House of Investments (HI) earned P26.2 million (M) in the first quarter of 1998 from revenues amounting to P60.7M. Company officers said that although earnings in the first three months are lower than the P35.3M the company made in the same period last year, they represent a turnaround in performance. HI reported a loss at yearend 1997. As with many others throughout Asia, the company was not spared by the financial turmoil that caused the peso's value to plunge from P26.50 in July to P40.12 by yearend 1997 and that forced up bank lending rates from 14% to as high as 35%. HI's construction and infrastructure subsidiary, EEI Corporation, earned P91.7M, almost double its net income for the first quarter of last Year. Despite the slowdown of the construction sector in general. EEI increased further its already robust project backlog to around P9.9 billion as of the end of April 1998. HI's consumer finance subsidiaries BA Savings Bank and First Malayan Leasing and Finance Corporation, however, were adversely affected by the high interest rates that prevailed from the last half of 1997 continuing up to the present, but which are showing signs of easing up. BA Savings also had lower loan bookings, particularly for auto loans, due to lower sales by the automobile industry. In an effort to further improve the quality of its receivables, BA Savings continues to make very conservative provisions for possible loan losses. HI also reported that, together with its partners, it has decided to postpone the implementation of the South Western Cement project in Malabuyoc, Cebu because of unfavorable investment conditions resulting from the regional financial crisis and because the project's Korean contractor encountered financial difficulties. HI decided instead to invest in existing cement companies through South Western Cement Ventures, Inc., a joint venture with Blue Circle Industries Plc. The company remains confident about its yearend 1998 outlook as it expects a gradual improvement of the interest and foreign exchange regimes.