• Money over environment protection?

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    EMETERIO SD. PEREZ

    WHY the obsession with money to the detriment of the environment? Can’t it be the other way around?

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    The public who may be curious to know the answer need only read reports of the debates surrounding the closure of certain mining companies on orders of Secretary Regina Lopez of the Department of Environment and Natural Resources (DENR).

    The arguments outside the DENR have failed consider the protection of the environment. Instead, their proponents focused more on pecuniary interests. Some asked: What would happen to the workers who lost their jobs with the stoppage of mining operations?

    Jobs, of course, mean money.

    Businessmen feared the potential losses from their investments; they forgot to tell the public that over the years, their net profits had piled up and bloated their retained earnings.

    From retained earnings are sourced the dividends that, having been approved by the board, companies distribute either in cash or in stock to their stockholders.

    Whatever happened to the focus of the debates that was and should be the protection of the environment? Net profit first before anything else? Every reasoning by politicians, who care about people because of their votes, goes against the DENR and Lopez.

    Can’t our legislators think of a solution without sacrificing either the workers or the environment?

    Marcventures
    Let me go to specifics.

    Marcventures Mining and Development Corp. (MMDC) is the only subsidiary of Marcventures Holdings Inc. (MHI). This is the reason MHI describes its financial filing as “Marcventures Holdings Inc. and subsidiary.”

    Unlike MHI shares, MMDC shares are not listed on the Philippine Stock Exchange. As an MHI subsidiary, however, its 1,821,358,599 outstanding common shares are also partly owned – though indirectly – by few public investors. Of MHI’s outstanding common shares, 1,821,327,687 are listed.

    In its PSE posting, MHI said it had free-float level of 42 percent. With its unit engaged in mining, foreigners are allowed to own only up to 40 percent of its outstanding capital stock.

    Recently, MHI’s seven-person board doubled its authorized capital to P4 billion and increased the number of its directors by two to nine. The capital expansion means the company’s only subsidiary, MMDC, is in need of more money to boost its search for precious metals. Never mind the result, which would be sacrificing the environment in favor of money.

    Financials
    In a financial filing, MHI reported capital stock consisting of 1,821,358,599 common shares with par value of P1 per share. It had additional paid-in capital (APIC) of P212,655,494.

    APIC is the total premium over par value resulting from the issuance of shares, whether common or preferred.

    When MHI’s APIC of P212,655,494 is added to outstanding capital of P1,821,358,599, the sum is P2,034,014,093.

    This, in turn, means MHI raised a total of P2,034,014,093 from the issuance of 1,821,358,599 common shares to its stockholders, including its public stockholders. The issuance translates to P1.117 per share.

    Reyes Tacandong & Co., MHI’s external auditor, reported MHI’s retained earnings of P798,037,518 as of Dec. 31, 2015, down from P829,604,241 as a result of a net loss of P31,566,723 during the year. The company did well in 2014 when it recorded net income of P844,280,341, and did better in 2013 when its net profit topped P1 billion at P1,185,536,096.

    Dividends
    MHI’s profitability resulted from P800 million and P1,244,078,034 in dividends it received from MMDC, its only unit, in 2014 and 2015, respectively.

    With these dividends, Marcventures Holdings has proven the profitability of operating a mining venture even if only through a subsidiary. It did not have to go to the mountains. By staying home, it received a total of P2,044,078,034 in dividend. MHI stockholders who owned 1,821,358,599 common shares were entitled to a dividend of P1.1223 per share.

    If the APIC worth P212,655,494 were added to P1,821,358,599 computed at P1 par value, this would result in total outstanding capital of P2,044,078,034, which, in turn, would translate to a dividend of P1.005 per share.

    In the third quarter of 2016, MHI reported that its net profit increased 36.1 percent to P140.249 million from P103.048 million in the same period in 2015.

    In the same unaudited financial report, MHI said it still had P858.67 million in retained earnings left after the dividends its board approved for distribution in 2013 and 2014. These numbers should prove the profitability of mining. Shouldn’t they?

    esdperez@gmail.com

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