Retained earnings not for preferred shares

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EMETERIO SD. PEREZ

EMETERIO SD. PEREZ

INTEREST payments payable to preferred shares are not included in the list of dividends in today’s piece because, strictly speaking, they must not be sourced from retained earnings.

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Listed companies defining interest payable to preferred shareholders as dividends just to justify their use of retained earnings for interest payment is unfair to the public.

To inform the public correctly, preferred shares must be presented in financial reports, quarterly or annual, as borrowings or liabilities, and not as part of equity.

The Securities and Exchange Commission and the Philippine Stock Exchange may take time to redefine preferred shares as borrowings. After all, they have to follow accounting standards in accordance with global practice. They may not even agree with a suggestion that their experts review financial filings.

As a suggestion though, the SEC and PSE may want to require listed companies to report in details their interest payments on preferred shares in the guise of dividends. In this way, the public investors would know how to factor interest payments as they reduce retained earnings, and in the process, minimize their dividends either in cash or in stock.

Dividends
Here are some listed companies’ dividends per common share and their dates of payments:
Leisure and Resorts World Corp. will pay eight centavos on October 25 and seven centavos on March 28, 2017; F&J Prince Holdings Corp., P0.10 on September16 and P0.10 on October 17; Metro Pacific Investments Corp., P0.032 on September 26; EEI Corp., P0.10 on September 26; Makati Finance Corp., P0.0329115919 and 3.29115919 percent, in stock on September 21; Alliance Global Group Inc., P0.31 on September 19; Manulife Financial Corp., P0.185 on September 19; Manila Electric Co., P8.872 and P4.608 on September 19; Ayala Land, P0.238 on September16; Centro Escolar University, P0.20 on September 9; Del Monte Pacific Ltd., $0.0133 on September8; San Miguel Purefoods Co., P1.50 on September 6; Rockwell Land Corp., P0.0537 on September 6; House of Investments, P0.065 on September 6; PLDT Inc., P49 on September 1; Asia United Bank, P0.67 on September1; Manila Bulletin Publishing Corp., 3 percent stock on August 31; Philex Mining Corp., P0.03 on August 24; Philippine Savings Bank, P0.75 on August 22.

Selling
Jose Marcel E. Panlilio and his family sold 5.3 million shares they own in Boulevard Holdings Inc. (BHI) at P0.0987 each on August 17 and 16 million shares at P0.0950 on August 19. The sale reduced their BHI holdings to 8,807,205 shares. On August 22, BHI closed trading at session’s low of P0.094 after hitting a high of P0.096. Panlilio is the president of the company and the chairman of its board.

As of May 11, Aniceto V. Bisnar Jr., a vice president of Ayala Land Inc. (ALI), owned 1,723,473 ALI shares of which he directly owned 107,640 shares. On August 19, he sold 107,640 ALI shares at P41.14 each. On August 22, ALI started trading at P42. During the day the price peaked at P41.20 and dropped to a low of P40.85 but closed at P41.20.

Buying
Alfred Vy Ty, a member of the board of Metropolitan Bank and Trust Co., increased the number of MBT shares he owns to 97,607,427 or 3.069 percent, after buying five million MBT shares at P88.50 each on August 15 and an additional five million shares at P89.95 each on August 16. On August 22, Metrobank closed trading at P89.70 after hitting a high of P90 and dropping to a low of P89.55.

Alfredo C. Ramos, chairman of the board of The Philodrill Corp., increased his holdings in the company to 105,090,555 shares or 0.05477 percent, after buying 89,381,320 shares at P0.012 on August 18. Of the total, he directly owns 5,011,025 shares while 100,079,530 shares a broker holds for him. Philodrill traded at P0.012 throughout the session on August 22.

Capital update
In a general information sheet (GIS) as of June 30 which it submitted to the Securities and Exchange Commission IRC Properties, IRC Properties Inc. reported 1.5 billion shares with par value of P1 per share as authorized capital stock. Of this authorized capital stock, 1,127,088,964 shares are outstanding, and of which 524 Filipinos own 955,279,992 shares, or 84.75 percent while 44 foreigners hold 171,808,972 shares, or 15.25 percent.

IRC named two “other aliens” as the largest stockholder with 44.074 million IRC shares, or 3.91 percent. Others include four Chinese, 172,372 shares; one Canadian, 30,000 shares, or 0.0003 percent; three Singaporeans, 110,000 shares, or 0.01 percent; one Swiss, 10,000 shares; 29 Americans, 202,500 shares, or 0.02 percent; one Australian, 10,000 shares; one Malaysian, 50 shares; and two Japanese, 50 shares.

In the same GIS, IRC said that also lodged with PCD Nominee Corp. are 472,563,031 shares, or 41.93 percent, and 43.869 million shares, or 3.89 percent, for Filipinos and foreigners, respectively.

The other stockholders named in the GIS include T&M Holdings Inc., 262,605,200 IRC shares, or 23.3 percent; Rizal Partners Co., which was identified as Japanese, 127.2 million IRC shares, or 11.29 percent; Alexander G. Asuncion, 90.014 million IRC shares, or 7.99 percent; Prime East Properties Inc., 69,815,500 IRC shares, or 6.19 percent; and Mabuhay Holdings Corp., 38,160,643 IRC shares, or 3.39 percent.

esdperez@gmail.com

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