Filinvest reports 9% hike in 1st quarter revenues

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Monday, June 23, 2014


REVENUES of Filinvest Development Corp. (FDC) grew by nine percent in the first quarter of 2014 over the same period last year.

On a consolidated basis, the Q1 revenues this year hit P9.05 billion, compared with the P9.02 billion logged last year. The holding company recorded a consolidated net income of P1.27 billion in the quarter.

Top line growth of most subsidiaries remained strong, led by the real estate business, which includes publicly-listed subsidiary Filinvest Land, Inc. (FLI) and Filinvest City developer Filinvest Alabang Inc.

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This sector posted a year-on-year gain of 11 percent in revenues to P4.22 billion from P3.81 billion in the first quarter.

Construction

The growth across all types of construction – high-rise buildings, mid rise buildings and horizontal housing – drove the rise in real estate revenues.

Mall and rental revenues increased because of both increases in rental rates and additional leasing area that resulted from the initial expansion of Filinvest Mall and the completion of office buildings Filinvest One and Plaz@E.

Banking subsidiary East West Bank’s (EWB) net interest income, representing majority of its earnings, increased by 24 percent in the first quarter as a result of strong growth in its loan portfolio heavily focused on consumer and middle-market segments.

The bank’s non-interest income, excluding trading, which is largely composed of recurring fees income, increased by 23 percent against the same period last year. However, trading income was lower in the first quarter of 2014 compared to the same period in 2013 in line with the industry-wide decline in trading gains.

“We have always aimed to focus and grow net interest income at East West Bank as this is considered our core business, a more steady and regular revenue source and a positive indicator of what we can expect in the future,” said FDC president and CEO Josephine Gotianun-Yap.

Bank expansion

FDC chairman Jonathan Gotianun said East West Bank is at the height of its branch/store expansion program in 2014. “We have already reached 376 stores and expect to attain 400 by year end,” he declared.

“The expansion program will temporarily put pressure on the bank’s earnings but will catapult it to higher levels once the branches become more productive and mature,” he said.

FDC’s financial condition remained healthy at the end of March 2014 with equity of P86.12 billion. Total assets grew by five percent to P285.01 billion from P270.76 billion in the previous period.

The conglomerate ended the quarter with a cash balance of P33.61 billion and long-term debt of P66.10 billion.

FDC ended the period with a long term debt to equity ratio of 0.77 and net debt to equity ratio of 0.38. Debt increased slightly as a result of the successful Php8.8 Billion bond issuance last January 2014, proceeds of which were earmarked for investments in power and hotels as well as for refinancing existing debt.

Real estate and banking represented the bulk of 1Q 2014 revenues at 47 percent and 40 percent respectively. Sugar operations contributed 11 percent while hotels contributed three percent of total revenues.

The rise in real estate revenue was driven by growth across all types of construction– high rise buildings, mid-rise buildings and horizontal housing. Further, mall and rental revenues increased because of both increases in rental rates and additional leasing area resulting from the initial expansion of Filinvest Mall and the completion of office buildings Filinvest One and Plaz@E.

New power plant

FDC Utilities Inc. (FDCUI) the conglomerate’s power division, broke ground on its 405MW power plant in Mindanao late last year and this will be operational by early 2016.

In November 2013, FDCUI was awarded 40MW Independent Power Producer Administrator (IPPA) contract for the Unified Leyte Geothermal Power Plant’s contracted capacity for turnover in November 2014.

Both sugar and hotel businesses posted revenue gains. Notably, hotel revenues were up five percent over the same period last year due to sales generated by newly opened hotel Crimson Alabang, which formally began commercial operations in March 2013. (PR)

Published in the Sun.Star Cebu newspaper on June 24, 2014.

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