SBMA income up 62% to P753M in first quarter

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SUBIC BAY FREEPORT: The Subic Bay Metropolitan Authority (SBMA) on Monday reported a healthy increase of 62 percent in its net profit for the first quarter of the current year, as compared to its performance for the same period in 2012.

According to SBMA Chairman Roberto Garcia, the agency’s net income expanded from P464 million to P753 million, as revenue improved by 32 percent and expenses were reduced by 16 percent.

“Just like last year, the agency’s improved financial performance for the first quarter can be attributed to higher revenues and reduced expenses,” Garcia noted, referring to SBMA’s 2012 net profit of P811 million, which was the highest ever in the agency’s 20-year history.

He added that SBMA’s revenues for the quarter came from its seaport operations, which improved revenues by 58 percent and its regulatory income, which grew by 118 percent.

He added that additional revenue increases were gained from tourism activities, as well as new land and building leases, which advanced by 22 percent and 16 percent, respectively.

Contributing equally to SBMA’s better financial performance for the same period was a corresponding decrease in its various expenses such as repair and maintenance by 85 percent, and power and water consumption by 59 percent, as a result of the agency’s conservation programs.

“But what is truly noteworthy is that SBMA’s earnings before interest, taxes, depreciation and amortization [Ebitda] increased substantially by 141 percent. This means the agency is not only pursuing effective strategic initiatives, but is implementing them efficiently as well,” Garcia said.

For 2012, SBMA recorded an improvement of 91 percent in its Ebitda, as its operating profit rose from P328 million in 2011 to P628 million for the year.

“Moving forward, we hope to strengthen the agency’s financial turnaround further to provide funds for our strategic plans, including the implementation of long overdue salary increases of SBMA employees, and the procurement of badly needed equipment for security, maintenance and infrastructure development work,” the SBMA chairman said.
NAIA 3 lease payments

Meanwhile, a whopping P2 billion in lease payments is expected by the Bases Conversion and Development Authority (BCDA) for the next 10 years on the land where the Ninoy Aquino International Airport Terminal 3 (NAIA 3) is situated.

According to Nena Radoc, BCDA chief financial officer, the agency reached a compromise agreement in which the Manila International Airport Authority (MIAA) will pay P190.5 million a year starting 2013 until 2022, for the lease of the land where the NAIA 3 is currently situated.

In accordance with the original lease agreement, Radoc said that the lease payment is
subject to a 5-percent price escalation every five years.

Before striking the new deal, BCDA and MIAA had different interpretations of the 1997
lease contract’s start of payment date.

“In essence, there were two dates in the contract that specified the effective date of the lease: first was the transfer of clean possession of the site which was on August 17, 1998, and second, the in service date or when the airport becomes fully operational which, according to MIAA, has not happened yet,” Radoc said in a statement.

The issue was brought to the Office of the General Corporate Counsel (OGCC), then to the Department of Justice (DOJ) before reaching the Office of the President.

The chief executives of BCDA and MIAA then agreed that it would be better to settle the issues amicably.

“BCDA and MIAA jointly filed a motion to withdraw the pending appeal with the [Office of the President],” Radoc said.

For his part, BCDA Chief Executive Officer Arnel Casanova said that half of the P2 billion in revenues from the lease payments would go to the Armed Forces of the Philippines Modernization Program.

“We welcome the compromise agreement with MIAA as it will play a significant role in generating the much-needed revenues to purchase the much-needed hardware that our country’s Armed Forces need to defend our land,” he added.

With report from Ritchie A. Horario

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