Wednesday , November 25 2020

Filinvest earnings will not fall in Q2 as costs rise



Filinvest Mimosa +

FILINVEST Development Corp. (FDC) saw a slight decrease in its attributable profit for the second quarter as higher costs outpaced the single-digit increase in revenue.

In a regulatory filing, the Gotianun-led conglomerate said net income attributable to the parent amounted to P3.35 billion in the April to June period, down 2% year on year.

Total revenue and other revenue increased 8% to P20.6 billion, slower than the 15% growth in total costs and expenses to P15.35 billion.

On a six-month basis, FDC's attributable net income increased 19% to P6.13 billion, while total revenue and other revenue rose 15% to $ 41.61 billion.

"We are pleased with the results of our various business areas with remarkable improvements resulting from the rise of our leasing, hotel and power companies," FDC President and CEO Josephine G. Yap said in a statement.

"We are positive that the track will be sustainable in the second half of the year, as demand for our products and services across the various business areas remains strong," she added.

FDC's banking and financial services unit accounted for 42.1% of total revenue and other revenue in the first half, followed by 37.3% real estate operations. Power, sugar and hotel activities accounted for the remaining 12.7%, 4% and 3.9% respectively.

East West Banking Corp.'s revenue and other revenue jumped 25% to P17.5 billion due to higher non-interest income from fees and commissions. The bank's net income in the first half also rose 33% to P2.69 billion.

"With a decline in inflation and interest rates declining, we expect the second half of the year to be more positive and allow us to maintain our results," FDC Chairman Jonathan T. Gotianun said in a statement.

Rental Income from Filinvest Land, Inc. (FLI) and Filinvest Alabang, Inc. increased 31% to P3.7 billion Thanks to the completion of six office buildings covering 118,000 square feet (sqm) in the 2018 gross rental area.

On its own, FLI delivered a 19% uptick in gross revenue to P12.62 billion, while net income rose 16% to P3.21 billion in the first half. FLI traced the result to a 30% increase in rental income to P3.38 billion along with a 25% increase in real estate to P8.43 billion.

Meanwhile, net revenues from hotel operations jumped 62% to P203.6 million. Revenue increased 24% to $ 1.6 billion due to the opening of Crimson Resort and Spa Boracay in 2018 and Quest Tagaytay in April. The company now has approx. 2,600 rooms under its network, which is expected to rise to 5,000 by 2023.

During the power business, revenues added 28% to P5.3 billion due to higher demand and sales of replacement power to other electricity generators. Therefore, net profit increased 86.7% to P1.41 billion.

FDC operates a 405-megawatt clean coal plant in Misamis Oriental, of which 302 megawatts have been entered into under largely long-term power purchase agreements.

The sugar unit delivered net income of P260.4 million, up 6.3% year-on-year, despite a 22% fall in revenues due to lower volumes sold.

Shares of FDC closed flat at P13.80 each on the stock exchange Thursday. – Arra B. Francia


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