AbaCore Capital Holdings Inc. – President’s Report

Good morning to our stockholders, members of the Board, and guests. Today, I am here to report on where AbaCore Capital Holdings Inc. (AbaCore”) stands today, especially the new milestones it has achieved so far this year.

As we all know, the Philippine economy faces headwinds that have resulted in a renewed challenging operating environment. One of the main headwinds is the elevated inflation rate – caused by factors such as continued constraints in supply chains, high price of oil and commodities in the global market, Russia’s invasion of Ukraine, and event the depreciation of the peso against the US Dollar.

With the rising price of goods, the potential for economic recovery is being threatened by the prospect of the Filipino public lowering their consumption. In turn, this would present challenges for businesses and their bottom lines. We also need to take into account that more expensive raw materials are cutting into the profitability of various businesses.

Despite a seemingly gloomy economic situation, AbaCore continues to rise high and successfully execute its expansion plans. This is because our company has a solid foundation, from the strength of its balance sheet to the expertise of its management and boardroom.

AbaCore recently announced that it has upgraded its existing business venture with Oriental Vision Mining Philippines Inc. (“ORVI”) into a coal operating agreement. Because of that, we can finally realize the value of our coal assets in Surigao del Sur through the royalty fees ORVI will pay out in the course of its exploration work.

There seems to be a silver lining in this challenging operating environment given that the elevated price of commodities globally will allow AbaCore to receive higher-than-usual royalty fees. Therefore, we look forward to working with ORVI to implement this agreement in order for AbaCore to have more diversified sources of revenue, which would lead to a stronger balance sheet in the long run.

AbaCore has also been successful in being an investment gateway to Batangas, with the Gaisano Group and a national meat processing chain agreeing to expand their operations in the province through the land we sold to them. The long-term benefits of these ventures to Batangauenos include high-paying jobs that will improve their standards of living.

These agreements are another example of the company successfully realizing the value of its assets, thus leading to a better financial position that would allow it to pursue further expansion plans.

AbaCore continues to have sufficient liquidity and a strong balance sheet despite this less-than-ideal macroeconomic environment. This is why we will be able to pay out dividends to our shareholders, consisting of cash dividend and a share in Philippine Regional Investment Development Corporation (“PRIDE”).

We are committed to ensuring our shareholders get the returns on their investments that they deserve, whether through achieving strong financial performance consistently every quarter or paying dividends, so that they may continue having confidence in AvaCore’s potential.

As such, we have been successful in delivering value for our shareholders as seen in the record-high performance of AbaCore’s stock. Our stock is up by 126% on a year-to-date basis, but it is still far below the book value of Php 3.89 per share as of December 31, 2021. This shows we need to make more progress to continue delivering results on behalf of our shareholders.

As we are now at the midpoint of 2022, we must work even harder to achieve the goals we have yet to attain and achieve other milestones that are out there to achieve. Let us use the success that we have achieved throughout the years as our North Star into Building AbaCore as the best version of itself for the benefit of our shareholders and our other stakeholders.

Thank you very much, ladies and gentlemen. A pleasant morning to all of you.

Raul B. De Mesa
Abacore Capital Holdings, Inc.

Read More: Press Release Philippines


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