SEAFRONTRESOURCESCORPORATION
STATEMENTSOFCASHFLOWS
CASHFLOWSFROMOPERATINGACTIVITIES
Adjustmentsfor:
Netunrealizedloss(gains)onfairvaluechangeson financialassetsatfairvaluethroughprofit(Note8)
Changesinoperatingassetsandliabilities: Decrease(increase)in:
AcquisitionofFinancialassets-AFS
ProceedsfromdisposaloffinancialassetsatFVOCI
Forthe2ndQuarterEndedFortheSixMonthsEnding ₱13,900,310₱98,613,073
₱13,900,310₱98,613,073
See accompanying Notes to Financial Statements.
The financial asset is held within a business model with the objective to hold financial assets in ordertocollectcontractualcashflows;and
Thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolely paymentsofprincipalandinterestontheprincipalamountoutstanding.
Financialassetsatamortizedcostaresubsequentlymeasuredusingtheeffectiveinterest(EIR)method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized,modifiedorimpaired.
TheCompany’sfinancialassetsat amortizedcostincludescashandcashequivalentsandreceivables.
Financial assets at FVTPL
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required tobe measured atfair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effectivehedginginstruments.Financialassetswithcashflowsthatarenotsolelypaymentsofprincipal andinterestareclassifiedandmeasuredatfairvaluethroughprofitorloss,irrespectiveofthebusiness model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through OCI, as described above, debt instruments may be designated as at FVTPL on initial recognitionifdoingsoeliminates,orsignificantlyreduces,anaccountingmismatch.
FinancialassetsatFVTPLarecarriedinthestatementoffinancialpositionatfairvaluewithnetchanges infairvaluerecognizedinprofitorloss.
This category includes derivative instruments andquoted equity investments which the Companyhad not irrevocably elected to classify at fair value through OCI. Dividends on quoted equityinvestments arealsorecognizedasotherincomeinprofitorlosswhenthe rightofpaymenthasbeenestablished.
The Company’s financial assets atFVTPL consists of investmentsinquotedequity securitiesheldfor trading.
Financial assets designated at FVOCI (equity instruments)
Uponinitialrecognition,theCompanycanelecttoclassifyirrevocablyitsequityinvestmentsasequity instruments designated at FVOCI when they meet the definition of equity under PAS 32 and are not heldfortrading. Theclassificationisdeterminedonaninstrument-by-instrumentbasis.
Gainsandlossesonthesefinancialassetsareneverrecycledtoprofitorloss.Dividendsarerecognized as other income in profit or loss when the right of payment has been established, except when the Companybenefitsfromsuchproceedsasarecovery ofpartofthecostof thefinancialasset,inwhich case, such gains are recorded in OCI. Equity instruments designated at FVOCI are not subject to impairmentassessment.
The Company’s financial assets at FVOCI include quoted and unquoted equity securities and quoted governmentsecurities.
Impairment of financial assets
The Company recognizes an allowance for ECLs for all debt instruments not held at FVTPL. ECLs arebasedonthedifferencebetweenthecontractualcashflowsdueinaccordancewiththecontractand allthecashflowsthattheCompanyexpectstoreceive,discountedatanapproximationofthe original effectiveinterestrate. Theexpectedcashflowswillincludecashflowsfromthesaleofcollateralheld orothercreditenhancementsthatareintegraltothecontractualterms.
tomeasureprogresstowardscompletesatisfactionoftheservice,becausethecustomersimultaneously receivesandconsumesthebenefitsprovidedbytheCompany.
GeneralandAdministrativeExpenses
Expenses are recorded when incurred. General and administrative expenses constitute costs of administeringthebusiness.
IncomeTax
Current tax
Currenttaxassetsandliabilitiesforthecurrent andpriorperiodsaremeasuredatthe amountexpected toberecoveredfromorpaidtothetaxationauthorities. Thetaxratesandtaxlawsusedtocomputethe amountarethosethatareenactedorsubstantiallyenactedbythereportingdate.
Deferred tax
Deferred tax is provided on all temporary differences at the reporting date between the tax bases of assetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.
Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits from excess minimum corporate income tax (MCIT) over regular corporate income tax and unused net operating loss carryover (NOLCO), to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits from excess MCITandunexpiredNOLCOcanbeutilized.
Thecarryingamountofdeferredtaxassetsisreviewedateachreportingdateandreducedtotheextent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferredtaxassettobeutilized. Unrecognizeddeferredtaxassetsarereassessedateachreportingdate and are recognized to the extent that it has become probable that future taxable profit will allow the deferredtaxassettoberecovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enactedorsubstantiallyenactedatthereportingdate.
EventsAfterthe ReportingDate
Post year-end events up to the date of auditors’ report that provide additional information about the Company’ssituationatthereportingdate(adjustingevents)arereflectedinthefinancialstatements,if any. Postyear-endeventsthatarenotadjustingeventsaredisclosedinthenoteswhenmaterial.
5. SignificantAccountingJudgments,EstimatesandAssumptions
The preparation of the accompanying financial statements requires management to make judgments, estimates and assumptions that affect amounts reported in the financial statements and related notes. The judgments, estimates and assumptions used in the financial statements are based upon management’sevaluationofrelevantfactsandcircumstancesasofthedateoftheCompany’sfinancial statements. Actualresultscoulddifferfromsuchestimates.
Judgments andestimates are contractually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Judgments
In the process of applying the Company’s accounting policies, management has made the following judgments,apartfromthoseinvolvingestimations,whichhasthemostsignificanteffectontheamounts recognizedinthefinancialstatements:
Recognition of deferred tax assets
The Company’s deferred tax assets pertain to the carryforward benefits of NOLCO and excess MCIT overRCIT.Judgmentisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.
The Company did not recognize deferred tax assets because the management believes that it may not be probable thatsufficienttaxable income willbeavailable against which the incometax benefits can berealizedpriortotheirexpiration.
EstimatesandAssumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the statementsoffinancialpositiondate,thathaveasignificantriskofcausingamaterialadjustmenttothe carryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.
Estimation of fair value of unquoted equity securities classified as financial assets at FVOCI
The Company uses its judgment to select the most appropriate valuation methodology to value its unquotedequityinvestmentsandmakeassumptionsthataremainlybasedonmarketconditionsexisting at each reporting period. As of June 30, 2024 and December 31, 2023, the Company valued the unquoted equity securities classifiedas financial assets at FVOCI using the adjusted net asset method which is a combination of the market and income approaches. It involves directly measuring the fair value of the assets and liabilities of the investee company. Assets of the investee company consist mainlyofparcelsoflandforsalewhichisadjustedtoitsfairvalue. Thefairvalueadjustmentsarising fromchangesinfairvalueofunquotedequitysecuritiesarefullydisclosedinNote8.
6. CashandCashEquivalents
30-Jun-24 31-Dec-23 (Unaudited) (Audited)
Cashinbanks(Note7) P =2,612,774 P =1,313,469 Cashequivalents(Note7) 11,287,536 109,747,195 P =13,900,310 P =111,060,664
Cash in banks earn interest at the prevailing bank deposit rates. Cash equivalents are short-term investmentsthataremadefor varying periodsofuptothree monthsdependingontheimmediatecash requirementsoftheCompanyandearninterestattheprevailingshort-termplacementrates.
Interest income earned on cash in banks and cash equivalents amounted to P =3.33 million and P =1.95 millionasofJune30,2024andDecember31,2023,respectively.
7. InvestmentinTrustFunds
The Company established trust funds (the Trust) which are being administered by a local bank under two trust agreements. The details of the trust funds based on the financial statements issued by the trusteebankareasfollows:
31-Dec-23 (Unaudited) (Audited)
andcashequivalents(Note6)
atFVTPL(Note8)
assetsatFVOCI-government
8)
trustfund
(560,425)
The assets, liabilities and performance of the fund are consolidated in the applicable accounts of the Companyforfinancialstatementpresentationpurposes.
8. FinancialAssets
TheCompany’sfinancialassetsaresummarizedbymeasurementcategoriesasfollows:
30-Jun-24 31-Dec-23 (Unaudited) (Audited)
Cashandcashequivalents(Note6) P=13,900,310 P =111,060,664 Receivables(Note9) 1,702,313 1,854,420
Notesreceivable(Note10) 100,000,000FinancialassetsatFVTPL(Note13) 33,624,779 38,107,024
FinancialassetsatFVOCI(Note13) 510,149,205 514,706,416 P=659,376,607 P =665,728,524
FinancialAssetsatFVTPL
DetailsoffinancialassetsatFVTPLconsistingofquotedequitysecuritiesareasfollows: 30-Jun-24 31-Dec-23 (Unaudited) (Audited)
Fairvalue P=33,624,779 P =38,107,024 Acquisitioncost 48,100,916 48,100,916
ThenetlossonfairvaluechangesonfinancialassetsatFVTPLamountedtoP =4.48millionandnetgain ofP =0.5millionasofJune30,2024and2023,respectively.
The movements in financial assets at FVTPL for the period ended June 30, 2024 and December 31, 2023areasfollows:
30-Jun-24 31-Dec-23 (Unaudited) (Audited)
Balanceatbeginningofyear P=38,107,024 P =36,828,021
Fairvalue gain(loss)recognizedduringtheperiod (4,482,245) 1,279,003 Balanceatendofyear P=33,624,779 P =38,107,024
FinancialAssetsatFVOCI
FinancialassetsatFVOCIconsistofquotedandunquotedsharesofstockheldforlong-terminvestment purposesandarecarriedatfairvalue. Thecarryingvaluesoftheseinvestmentsareasfollows:
30-Jun-24 31-Dec-23 (Unaudited) (Audited)
Quotedequitysecurities:
PetroEnergyResourcesCorporation(PERC) [Note 13] P=15,558,704 P =19,063,263
Unquotedequitysecurity: HermosaEcozone DevelopmentCorporation(HEDC) [Note13] 490,649,813 490,649,813 Investmentsingovernmentsecurities (Note7and13) 3,940,688 4,993,340 P=510,149,205 P =514,706,416
The movements in financial assets at FVOCI for the period ended June 30, 2024 and December 31, 2023areasfollows:
30-Jun-24 31-Dec-23 (Unaudited) (Audited)
Balanceatbeginningofyear P=514,706,416 P =540,609,468
Fairvalue
(loss)
ofperiod P=510,149,205 P =514,706,416
MovementsinthenetunrealizedgainsonfinancialassetsatFVOCIinequityareasfollows: 30-Jun-24 31-Dec-23 (Unaudited) (Audited)
Balanceatbeginningofyear P =337,293,862 P =361,525,568
Unrealizedgain(loss)recognizedinother comprehensiveincome (3,557,211) (13,148,096)
Cumulativegainondisposedfinancialassettransferred toretainedearnings ‒ (11,083,610) Balanceatendofperiod P =333,736,651 P =337,293,862
Dividend income earned on investments amounted to P =0.03 million as of June 30, 2024 and P = 0.04 millionasofJune30,2023.
Investment in HEDC
On January 31, 1997, the Company entered into a Project Shareholders’ Agreement with five other companies led by Investment and Capital Corporation of the Philippines (ICCP) and Penta Capital Investment Corporation(PCIC) to develop500to600hectaresofrawlandin Hermosa,Bataanintoa
new township consisting of industrial estates, residential communities, a golf and country club and a commercialcenter.
The fair valueofinvestment inHEDCisdeterminedusingtheadjustednetassetvaluemethod wherein the assets of HEDC consisting mainly of parcels of land are adjusted from cost to its fair value. The valuation of the parcels of land was performed by a SEC-accredited independent appraiser as of December31,2023. ThismeasurementfallsunderLevel3inthefairvaluehierarchy.
Fairvaluemeasurementdisclosuresforthedeterminationoffairvalueofunquotedequitysecuritiesare providedinNote13.
9. Receivables
30-Jun-24 31-Dec-23 (Unaudited) (Audited)
fromHEDC(Note12)
10. NotesReceivable
On February 1, 2024, the Company placed P =100 million in a 362-day tenor promissory note through RCBC Capital Corporation. The interest rate per annum is 8%, subject to quarterly interest payment.
11. OtherIncome
30-Jun-24 30-Jun-23 31-Dec-23 (Unaudited) (Unaudited) (Audited)
Management income pertains to accounting, legal and administrative services rendered by the CompanytoHEDC(seeNote12).
Rentalincomepertainstorentalsearnedfromthetwo(2)parkingslotsownedbytheCompanywhich areclassifiedasinvestmentproperty.AsofJune30,2024andDecember31,2023,thecostofthefully depreciatedparkingslotsamountedtoP =207,598.
The fair value of the investment property ranges from P =800,000 to P =1,000,000 per slot as of June 30, 2024 and December 31, 2023,respectively. This has been determinedonthe basis of recent sales of similar properties in the same area as the investment property and taking into account the economicconditionsprevailingatthetimethevaluationwasmade.Thesignificantunobservableinputs used in determining the fair value include the location, size, shape, and highest and best use (Level 3 - Significant unobservable inputs). There are no related costs for the operation of the investment property.
12. RelatedPartyTransactions
Relatedpartyrelationshipexistswhenonepartyhastheabilitytocontrol,directly,orindirectlythrough one or more intermediaries, the other party or exercise significant influence over the other party in makingfinancialandoperatingdecisions. Suchrelationshipalsoexistsbetweenand/oramongentities, which are under common control with the reporting enterprises and its key management personnel, directors,oritsshareholders. Inconsideringeachrelatedpartyrelationship,attentionisdirectedtothe substanceoftherelationship,andnotmerelythelegalform.
TheCompanyinitsregularconductofbusinesshasenteredintothefollowingtransactionswithrelated partiesconsistingofreimbursementofexpensesandmanagementandaccountingservicesagreements.
The Company’s financial statements include the following amounts resulting from transactions with relatedparties:
30-Jun-24 (Unaudited)
* included as part of accounts payable and accrued expenses
31-Dec-23 (Unaudited)
Affiliate:
* included as part of accounts payable and accrued expenses
TheCompanyhasnoemployeesandPERCprovidesadministrativesupporttotheCompany.
On April 1, 2022, the Company entered into a management agreement with PERC. Under the said agreement, PERC provides the Company management and technical services including compliance, administration and supervision of operations, finance, accounting, and treasury, and general services. The agreement took effect on the date of execution of the management agreement and may be terminatedbyeither partyupon 30 daysofprior written notice.The Companypays amonthly service fee amounting to P =35,000, exclusive of VAT. Furthermore, PERC also charges direct costs as an incidence of the performance of services such as rent of office space and other office-related costs. Therefore, no compensation and short-term benefits for key management personnel were charged in profitorlossforthequartersendedJune 30,2024and2023andyearendedDecember 31,2023.
Market risk
Marketriskistheriskoflossonfutureearnings,onfairvaluesoronfuture cashflowsthatmayresult fromchangesinmarketprices. The valueof afinancialinstrumentmaychangeasa resultofchanges in interest rates, foreign currency exchanges rates, commodity prices, equity prices and other market changes. TheCompany’smarketriskemanatesfromitsholdingsindebtandequitysecurities.
The Company closely monitors the prices of its debt and equity securities as well as macroeconomic and entity-specific factors which could directly or indirectly affect the prices of these instruments. In case of an expected declineinits portfolio of equitysecurities,theCompanyreadilydisposesortrades thesecuritiesforreplacementwithmoreviableandlessriskyinvestments.
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. With respect to credit risk arising from cash and cash equivalents, receivables, financial assets at FVTPL and financial assets at FVOCI, the Company’s exposure to credit risk is equal to the carrying amount of these instruments. The Company limits its creditriskontheseassetsbydealingonlywithreputablecounterparties.
For cash and cash equivalents and quoted government securities, the Company applies the low credit risksimplificationwheretheCompanymeasurestheECLsona12-monthbasisbasedontheprobability of default and loss given default which are publicly available. The Companyalso evaluates the credit rating of the bank and other financial institutions to determine whether the debt instrument has significantlyincreasedincredit riskandtoestimateECLs.
The Companyconsidersitscashand cashequivalentsandquotedgovernment securitiesashighgrade since these are placed in financial institutions of high credit standing. Accordingly, ECLs relating to thesedebtinstrumentsroundstonil.
The Company’s receivables are aged current as of June 30, 2024 and December 31, 2023. No receivablesareconsideredcredit-impaired.
As of June 30, 2024 and December 31, 2023, the carrying values of the Company’s financial instrumentsrepresentmaximumexposure asofreportingdate.
Thetablebelowshowsthecomparativesummaryofmaximumcreditriskexposuresonfinancial instrumentsasofJune30,2024andDecember31,2023:
30-Jun-24 (Unaudited) 31-Dec-23 (Audited)
15. BasicandDilutedEarningsPerShare
ThecomputationsoftheCompany’sbasicearningspershareareasfollows:
(Unaudited)
(Unaudited)
The Company has no potentially dilutive common stock as of June 30, 2024, June 30, 2023, and December31,2023.
16. Others
a) The Interim Financial Report as of June 30, 2024 is in compliance with generally accepted accountingprinciples(alleffectivestandardsandinterpretationsunderPFRS).
b) The same policies and methods of computation were followed in the preparation of the interim financialreportcomparedtotheDecember31,2023AuditedFinancialStatements.
c) Therearenounusualitemoritemsthataffectedtheassets,liabilities,equityandcashflowsofthe June 30,2024FinancialStatements.
d) TherearenomaterialeventshappenedsubsequenttotheendofJune30,2024thatmightaffectthe resultofsaidfinancialstatements.
e) Earnings (loss) per share is presented in the face of the unaudited statements of income for the periodendedJune30,2024andJune30,2023.
f) No significant events happened during the quarter that will affect the June 30, 2024 Unaudited FinancialStatements.
g) There are no seasonal aspects that had a material effect on the financial condition or results of operationof theCompany.
h) There is no foreseeable event that will trigger direct or contingent financial obligation that is materialtotheCompany,includinganydefaultofacceleratedobligation.
i) There are no material off-balance sheet transactions, arrangements, obligations and other relationshipoftheCompanywithotherentitiesorpersonsthatwerecreatedduringtheperiod.
j) Therearenochangesinestimatesofamountsreportedinpriorperiodsofthecurrentfinancialyear orchangesinestimatesofamountsreportedinpriorfinancialyearsthatcouldhavematerialeffect inthecurrentperiod.
k) Therearenoissuances,repurchases,repayments,repaymentsofdebtandequitysecurities.
l) Therearenochangesinthecompositionoftheissuerduringtheinterimperiod,includingbusiness combinations, acquisitionor disposal ofsubsidiariesand long term investments, restructuringand discountingoperationsduringtheperiod.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOFOPERATIONS
1.FinancialCondition(AsofJune30,2024andJune30,2023)
ASSETS
LIABILITIESANDEQUITY
Total assets amounted to P =661.211 million and P =681.433 million as of June 30, 2024 and June 30, 2023, respectively.
The Company’s cash andcash equivalents amountedto P =13.900 million as ofJune 30, 2024 andP =98.613 million as of June 30, 2023. The 85.90% net decrease was due to issuance of 362-day promissory note under RCBC Capital Corporation at 8% interest per annum. This was recorded under Notes Receivable account.
FinancialassetsatFVTPLamountedtoP =33.625millionandP =37.326millionasofJune30,2024andasof June 30, 2023, respectively. The 9.92% decrease is due to downward movement of market values of investmentsinstockstradedatPSE.
Receivables account as of June 30, 2024 amounted to P =1.702 million compared to P =1.030 million as of June30,2023.The65.25%netincreasemainlyreferstointerestreceivablefrommoneymarketplacements (MMPs)anddividendreceivablefromvariousstockinvestmentsduringtheperiod.
Other current assets consist of prepayments, prepaid taxes and input tax carry-overs. This amounted to P =1.835 million and P =1.582 million as of June 30, 2024 and June 30, 2023, respectively. The 15.96% net increasemainlyrepresentsadditionalinputtaxesrecordedduringtheperiod.
Financial assets at FVOCI as of June 30, 2024 amounted toP =510.149 millionand P =542.882million as of June 30, 2023. The 6.03% net decrease is due to the downward adjustment of the fair value of the investment inHEDC,PetroEnergyResourcesCorporationandsaleofinvestmentinBenguetCorp.
Accounts payable and accrued expenses amounted to P =0.436 million and P=0.510 million as of June 30, 2024 and June 30, 2023, respectively. The 14.53% decrease is due to settlement of payables during the period.
Total stockholders’ equity as of as of June 30, 2024 amounted to P =602.186million or P =3.694 book value pershareandP =619.738millionorP =3.802bookvaluepershareasofJune30,2023.
2.ResultsofOperations(FortheQuarterendedJune30,2024andJune30,2023)
The Company posted a net loss of P =1.520 million or P =0.009 loss per share as of June 30, 2024 and net incomeof P =2.303millionorP =0.014earningspershareasofJune30,2023.
Interest income amounted to P =1.748 million and P =0.993 million as of June 30, 2024 and June 30, 2023, respectively. The increase is attributable to higher interest rates from MMPs and notes receivable during theperiod.
Dividend income amounted to ₱0.003million and ₱0.041 million as of June 30, 2024 and June 30, 2023, respectively.Thedecreasereferstolowercashdividendsreceivedfromvariousstockinvestments.
Other income for June 2024 and 2023 mainly pertains to the rental income from the Company owned parkingspaceinTektiteTowersandmanagementservicesrenderedtoHEDC.
General and administrative expenses amounted to P =0.551 million and P =0.665 million as of June 30, 2024 andJune30,2023,respectively.The17.18%decreaseaccountsforlowerexpenseduringtheperiod.
TheCompany’snetlossonfairvaluechangesonfinancialassetsatFVTPLamountedtoP =2.824millionas of June 30, 2024 compared to net gain of P =1.832 million as of June 30, 2023, respectively. The negative varianceisduetothedownwardmovementof investmentsinstocksduringthe period.
Provisionforincome taxrefers to the Minimum Corporate Income Tax(MCIT) of 2% and 1%as of June 30,2024and2023,respectively.TheCompanyset-upMCITratherthanthe25%regulartaxbecausemost ofitsincomearefromunrealizedmarketchangesofinvestmentsandpassiveincomesubjecttofinaltax.
3.FinancialConditions(AsofJune30,2024andDecember31,2023)
Total assets amounted to P =661.211 million as of June 30, 2024 compared to P =667.405 million as of December31,2023.
The Company’s cash andcash equivalents amounted to P =13.900 million asof June 30, 2024 comparedto P =111.061 million as of December 31, 2023. The 87.48% decrease was due to issuance of 362-day promissory note under RCBC Capital Corporation at 8% per annum. This was recorded under Notes Receivableaccount.
FinancialassetsatFVTPLamountedtoP =33.625millioncomparedtoP=38.107million asofJune30,2024 andDecember31,2023,respectively.The11.76%decreasereferstodownwardmovementofmarketvalues ofinvestmentsinstockstradedatPSEduringtheperiod.
Receivables account as of June 30, 2024 amounted to P =1.702 million compared to P =1.854 million as of December31,2023.The8.20%decreasemainlyreferstoshorterperiodofinterestreceivablefromMMPs anddividendreceivablefromvariousstockinvestments.
The decreaseof 0.89% in financial assetsat FVOCIreferstothe downwardmovementinmarketvalueof investment inPetroEnergyResourcesCorporation.
Accounts payable and accrued expenses amounted to P =0.436 million and P=0.984 million as of June 30, 2024 and December 31, 2023, respectively. The 55.73% net decrease accounts for the settlement of payablesandaccrualsduringtheperiod.
Total stockholders’ equity as of June 30, 2024 amounted to P =602.186 million or P3.694 book value per sharecomparedtoP =607.832millionor P3.729bookvalueasofDecember31,2023.
Exceptforitemsdiscussedabove,there arenomorechangesinthefinancialstatementsthatwillreachthe materialitythresholdof5%.
4.ResultsofOperations(ForsixmonthsendedJune30,2024andJune30,2023)
REVENUES
assetsatfairvaluethroughprofitorloss
The Company posted a net loss of P =2.088 million or P =(0.013) loss per share as of June 30, 2024 and net incomeofP =1.453millionorP =0.009earningspershareasofJune30,2023.
Interest income amounted to P =3.330 million and P =1.951 million as of June 30, 2024 and June 30, 2023, respectively.Theincreaseisattributabletohighermoneymarketplacementsaswellasbetterinterestrates duringtheperiod.
DividendincomeforJune30,2024and2023mainlyreferstocashdividendsfromvariousstockinvestment. Thedecreaseof9.12%pertainstolowercashdividendreceivedfrominvestmentsduringthe period.
The Company’s net loss on fair value changes on financial assets at fair value through profit or loss amounted to P =4.482 million as of June 30, 2024 and net gain of P =0.498 million as of June 30, 2023. The decrease pertains to downwardmovements in marketvalue oftheinvestments in stockstradedat the PSE fortheperiod.
OtherincomeforJune30,2024and2023mainlypertainstotherentalincomefromtheCompany’sowned parkingspaceinTektiteTowersandmanagementservicesrenderedtoHEDC.The13.49%increaseisdue toreceiptofperdiemfromHEDCforAnnualStockholders’Meeting.
Substantial progress continues in Phase 2 and 3 of Hermosa Ecozone Industrial Park (HEIP). Recent constructionanddevelopmenteffortsencompassestheinstallationof a reinforcedconcrete retainingwall, first pipe bridge with integrated water and sewer pipes, addition of street and building signages. Furthermore, significant rehabilitation has been undertaken such as refurbishment of roads, sidewalks, curbs and gutters, as well as the park way drive road re-blocking. These improvements demonstrate HEDC’sdedicationinprovidingexceptionalservicetoitslocatorsandstakeholdersefficiently.
B. InvestmentinFinancialAssetsatFVTPLandFVOCItradedinthemarket
The Company will continue to closely monitor the prices of its securities as well as those specific factors which could directly or indirectly affect the prices of these instruments. Because such investments are subject to price risk due tochanges in marketvalues, an expected decline in the portfolio will prompt the Companytodispose ortrade thesecurities for replacementwithmore viableandlessriskyinvestmentsin thefuture
WiththeCompany’scurrentcashposition,itcansustainitsneedsforoperatingexpenses.Theonlypossible materialcommitmentisacashcallfromHEDC,ofwhichisnotexpectedtocallinthenexttwelvemonths. Thus,itdoesnotintendtoraiseadditionalfunds.
Aside from the Company’s investments stated above, there are noother researches or development plans, andpurchaseorsaleofsignificantequipmentthattheCompanyexpectsperform.
PARTII-OtherInformation
The Company has no other information that need to be disclosed other than disclosures made under SEC Form17-C(ifany).
SEAFRONTRESOURCESCORPORATION
SCHEDULEOFFINANCIALSOUNDNESSINDICATORS
Financial Soundness Indicators
Below are the financial ratios that are relevant to the Company for the sixth-month period ended June 30,2024,June30,2023andfortheyearendedDecember31,2023:
(Unaudited)
*Earnings before interest, taxes, depreciation and amortization (EBITDA)
