Shares of Discovery World Corp fell sharply on its trading debut today, mirroring the weakness in the broader market.
Shares of the luxury resort developer dropped 11.59 percent to a session low of P2.90 per share from its listing price of P3.28 apiece. The stock price did not break past its listing price throughout the session.
"I guess it's a case of bad timing. People were cutting exposure on equities. Discovery World was no exception," said Jose Vistan of AB Capital Securities Inc.
The Philippine Stock Exchange index was down 32.45 points or 0.53 percent to close at 6,122.89 today.
On the sidelines of its listing ceremony, Discovery World president John Y. Tiu told reporters that the company expects the onslaught of Typhoon 'Yolanda' to make a slight dent on sales and profit.
"Calamities will always happen. We believe strongly in the growth of the Philippine tourism industry. While the country is currently experiencing some slowness in growth because of the typhoon, we believe moving forward, the prospects for the tourism industry is extremely bright," Tiu said.
Discovery Shores Boracay experienced "minimal" cancellations at the peak of the typhoon's onslaught, but its waiting list of clients can "more than absorb" the cancellations, Tiu said.
Discovery World was forced to shut down operations of newly acquired Club Paradise in Coron, Palawan. The renovation of the resort will be finished in a month just in time for the peak season, Tiu said.
"There might be a slight reduction in revenues. We expect some cancellations from guests because of the initial impact of ‘Yolanda.’ In the medium term, we don't see any effect as long as we get the generators online," he said, adding that facilities at Club Paradise are insured.
Discovery World is purchasing more generator sets to support the close to 1-megawatt requirement of Discovery Shores Boracay. The firm's reliance on gensets will hike its power costs by about 15-20 percent, Tiu said.
"In Boracay, the main issue there is the power situation. We have over 150 percent back-up power and we're purchasing generators to make sure we have continuous power that's why we're fully operational," he said.
"About 12-15 hours would be tapped to the grid then we use the gensets for the balance of 12 or 19 hours that's left," he said.
Discovery World may spend as much as P1 billion to expand Club Paradise and Discovery Shores. It plans to start developing the beach properties owned by Palawan Cove Corp in San Vicente, Palawan next year -- a venture that has been delayed following the acquisition of Club Paradise.
Discovery World, the eighth company to go public this year, raised P551 million from the public offering of 168 million shares.
Net proceeds of P516.46 million from the share sale will be used to retire debts incurred for the acquisition of Club Paradise and to bankroll investments in Palawan Cove and in Discovery Fleet Corp, which offers full diving and non-diving programs.
The company plans to start the development of the San Vicente property next year. It has been delayed following the acquisition of Club Paradise.
Discovery World doubled its net income to P30.53 million in the first half from P15.59 billion in the same period last year following a slight uptick in revenues and lower operating expenses.
source: interaksyon.com
