Why some companies still have positive earnings despite the pandemic

By John Carlo Tria

 

Readers have asked me why despite the quarterly GDP drop that mirrors the fall in neighboring economies like Malaysia (17% GDP drop) and Thailand (12% GDP drop), the local stock market still performs rather well, and that a number of companies reported first-half earnings.

I am sharing with you an excerpt from my column at the Edge Davao business paper:

I guess we need to start with the fact that the pandemic has not hit all companies negatively. A look at first half corporate reports of many local companies like food processors, some banks, a telecommunications company showed incomes while those of fast-food chains will not.

Obviously, many people did not go out to eat during the ECQ. But they did buy or consume more packaged food and grocery items and fresh food to cook at home and engaged a higher level of internet services as they worked from home. People spent more on certain products and services. companies that provided them generated the revenue.

What do these varied reports mean for entrepreneurs? It provides a direction to the innovation you may need to do to thrive amid the crisis. Some companies have now begun exploring the more resilient food and agriculture businesses by revisiting old agri properties and finding ways to reinvigorate them.

Other companies are exploring expansions in areas less affected by restrictions like the Visayas and Mindanao. Having better internet is the key to ensuring seamless work.

This deserves further study, to give flesh to the oft-repeated mantra of B school strategy professors who say that even in an economic downturn, strong pockets of growth can be found.

 

MINIBIZCON ON SEPT. 10

Those of you interested in the Mindanao economy are cordially invited to attend the first-ever online Mindanao Business Conference.

Hosted by the Davao City Chamber of Commerce and Industry and the Philippine Chamber of Commerce, the online event begins on September 10. Its theme is Mindanao: Journeying towards the new normal. The conference will include online discussions to take place on various days to tackle the various opportunities and concerns over our economic recovery. Keynote speaker is Secretary of Finance Carlos G. Dominguez.

Mindanao’s business sector has attracted many due to low power and food costs and a growing market. It has the lowest COVID 19 caseload and thus it looks like its recovery from the economic impacts of the pandemic may come faster than expected.

Its agri sector is the country’s most robust and with an even higher budget for the Department of Agriculture, it looks like the food growing capability of the island may be boosted even further, ensuring the country’s food security.

For more information, visit the Davao Chamber Facebook page, or the website at www.davaochamber.com.

Continue to Stay safe everyone. Wear your mask and maintain social distancing.