The first quarter net profit of Gokongwei-led property developer Robinsons Land Corp. (RLC) jumped by 82 percent year-on-year to P3.34 billion as earnings contribution from the residential business soared following a recent change in accounting policy.
Effective January 2020, RLC recognized revenues from residential development based on a buyer’s equity threshold of 10 percent, from the previous 15 percent. This was to be more reflective of the company’s operating performance and align accounting practices with domestic industry practice.
As a result of the shift to a new accounting policy, realized revenues went up by 241 percent year-on-year to P6.70 billion in the first three months.
“RLC continues to be optimistic about its growth outlook as it builds a larger and more diversified platform. Our strong fundamentals and solid balance sheet will help us navigate the challenges brought about by the new corona virus. We will also seek opportunities and new ways of doing business to deliver long-term sustainable value. As we emerge from the enhanced community quarantine, our priorities are the welfare and wellbeing of our employees, business partners, and patrons,” RLC president Frederick Go disclosed to the Philippine Stock Exchange on Thursday.
To conserve liquidity, RLC said projects that have not commenced would no longer be pursued for now. For the full year, capital expenditure will be capped at P24 billion for domestic operations.
RLC’s consolidated revenues in the first three months rose by 70 percent year-on-year to P11.57 billion, while overall cash flow grew by 59 percent to P6 billion.
An an indicator of revenue generation in the coming years, RLC’s sales take-up for the first quarter was steady at P3.9 billion with three new projects worth P10 billion launched, namely: Sapphire Bloc South in Ortigas Center and Sierra Valley Gardens buildings 1 & 2 located in Cainta, Rizal.
Overseas, RLC reported significant progress in its Chengdu Ban Bien Jie project in mainland China as it was able to acquire the sales permits for its villas/ townhouses for phase 1 and some of the residential high-rise apartments for phase 2. Pre-selling has commenced for these two segments. To date, all 64 townhouses have been fully sold while the high-rise apartments for phase 2 are 94 percent booked.
RLC expects recognition of revenues from the Chengdu project to take effect next year.
On the other hand, RLC’s investment portfolio posted flat revenues in the first three months of the year due to operational disruptions caused by the enhanced community quarantine (ECQ) starting mid-March. RLC’s investment portfolio contributed 42 percent of the consolidated revenues.
Revenues from RLC’s malls division declined by 8 percent to P2.87 billion. Same mall rentals went down by 6 percent as the company temporary closed all 52 malls in cooperation with the government’s ECQ directives. RLC waived rentals for non-operational tenants during the ECQ period.
The office buildings division, on the other hand, increased revenues by 27 percent year-on-year to P1.43 billion, mostly due to the business process outsourcing (BPO) market. The office buildings division now has 23 operational sites with locations in the cities of Pasig, Quezon, Taguig, Mandaluyong, Makati, Cebu, Davao, Naga, among others.
On the other hand, the hotels and resorts segment was also heavily affected by the ECQ, resulting in a 10-percent year on-year decline in revenues to P468 million. This drop was due to slower business and cancellations due to the COVID-19 pandemic as well as the disruption brought about by the Taal Volcano eruption early in the year.
During the ECQ period, about 12 of its hotels located in Metro Manila, Metro Cebu, Bacolod and Iloilo remained open to accommodate BPO clients and returning overseas Filipino workers. Currently, the average occupancy rate of all hotels combined stood at around 79 percent across its ecosystem of over 3,000 room keys.
Meanwhile, the warehouse business saw a 96-percent year-on-year growth in consolidated revenues to P96.4 million, driven mainly by its two warehouse facilities in Sucat, Muntinlupa and in Calamba, Laguna.
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