Yoma Strategic sinks to 2Q loss of $60 mil; announces deal to sell 20% stake to Ayala Corp
SINGAPORE (Nov 14): Yoma Strategic Holdings sank into the red with a net loss of US$44.2 million ($60.2 million) for 2Q20 ended September, compared to earnings of US$18.8 million a year ago.
On a fully diluted basis, this translates to loss per share of 2.33 US cents for 2Q20, compared to earnings per share of 0.99 US cents in 2Q19.
This brings the group’s net loss for 1H20 to US$57.5 million, compared to earnings of US$13.2 million in 1H19.
2Q20 revenue fell 24.6% to US$22.3 million, as revenue contribution from its real estate development segment slumped to US$5.3 million during the quarter, from US$16.6 million a year ago.
The 2Q20 decline was attributed to a limited number of units left for sale in StarCity Galaxy Towers, which had accounted for the bulk of revenue a year ago.
Revenue from the group’s automotive & heavy equipment segment decreased by 11.9% to US$4.9 million in 2Q20, on lower sales of New Holland tractors and JCB construction equipment.
Yoma’s consumer segment provided a bright spot for the group in 2Q20, with revenue more than doubling to US$8.2 million, from US$3.3 million a year ago. The increase was driven by sales growth at KFC from new store openings and revenue from additional consumer subsidiaries such as YKKO. KOSPA, which became the group’s subsidiary following the partnership with SF Holding, also contributed US$1.53 million to the group revenue.
The group’s bottom line was also hit by net other losses of US$27.5 million in 2Q20, compared with net other income of US$39.8 million a year ago. This was mainly due to a fair value loss on an asset held for disposal.
Administrative expenses grew 24.5% to US$14.0 million, on the back of administrative expenses in new subsidiaries such as YKKO and KOSPA.
Finance expenses jumped 42.1% to US$8.9 million, from US$6.2 million a year ago.
As at end-September, cash and cash equivalents stood at US$15.8 million.
Despite the weaker performance, shares in Yoma have surged 13.9% to 37 cents as at 2.52pm on Thursday, after the group announced plans of a “strategic partnership” with Ayala Corporation.
Yoma before market open on Thursday unveiled a US$155 million investment from Ayala to buy a 20% stake in the group.
“The US$155 million investment from Ayala will enable the group to accelerate the expansion of its core businesses,” Yoma says in a statement. “In addition, a series of actions are being taken to streamline the group’s portfolio of investment in 3Q2020, which would recycle capital from its non-core assets into the expansion of its core businesses and strengthen the group’s balance sheet.”
One of the oldest and largest conglomerates in the Philippines, Ayala is also set to acquire a 20% stake in First Myanmar Investment (FMI), another company owned by Yoma’s executive chairman Serge Pun.
In a filing to SGX before market open on Nov 14, Yoma confirmed Ayala will be investing a total of US$237.5 million in the two companies.
The issue price for the shares is set at 45 cents per share for Yoma Strategic and 15,000 Myanmar kyat ($13.28) per share for FMI.
The issue price represents a premium of 37.7% and 36.5% over the volume weighted average price of the shares traded on Nov 12 and Nov 13, respectively.
“Today marks a new milestone for the Yoma Group. I am extremely pleased and honoured to have Ayala become one of our most important strategic partners. This partnership reflects Ayala’s faith in the future of Myanmar and validates the Yoma Group’s business model in the country,” says Pun.
“We look forward to leveraging on the expertise and experience of Ayala to strengthen our existing businesses as well as to explore potential opportunities in Myanmar,” he adds.
The deal, which will mark Ayala’s largest investments outside of the Philippines, will value Pun’s Yoma Strategic and FMI at a combined US$1 billion.
