The conglomerate Alliance Global Group, Inc. (AGI) led by tycoon Andrew Tan has set aside 4 billion pesos for a new share buyback program to be undertaken within the next two and a half years to improve the shareholder value.
AGI’s board of directors has authorized the new share buyback program, which will be executed in the open market through the trading facilities of the Philippine Stock Exchange (PSE).
“The company will buy back shares for cash and count them as treasury stock,” AGI said in a statement to the PSE on Friday. He said he has sufficient retained earnings to support this exercise.
“The new buyback program will be implemented in an orderly fashion and will not adversely affect potential and existing projects of the company and its subsidiaries,” the statement said.
To date, AGI has approximately 12.95 billion issued share capital, of which 10.27 billion common shares. Of the shares issued, around 9.65 billion are in circulation while 620.6 million are deposited as treasury shares.
Companies with sufficient profits usually resort to stock buybacks when they believe their stocks are undervalued by the market.
AGI is currently valued by the stock market at around 98.42 billion pesos. The conglomerate posted second-quarter net profit of 6 billion pesos, up 132 percent from the low base seen last year when quarantine restrictions were most stringent. Sequentially, its second-quarter net income increased more than twice the attributable net income of 2.56 billion pesos recorded in the first quarter despite the re-imposition of foreclosure measures from late March to early April.
Liquor branch Emperador Inc., its business unit that defied declining profits caused by the COVID-19 pandemic, broke a new record as its second quarter net profit increased 60% year-on-year to 3 billion pesos. This supported a 53% growth in first half profit to 5.1 billion pesos.
AGI’s attributable net profit jumped 124% year-on-year to 8.5 billion pesos in the first half.
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