D.M. Wenceslao and Associates, Inc. (DMW) on Thursday reported a 43.5% jump in its core net income last year to P1.88 billion, driven by its resilient leasing businesses, improved residential gross margin, and land sale transactions closed in the fourth quarter.

“We remain in an evolving landscape which while crowded with opportunities is also filled with potential re-emerging risks as well as new risks, including geopolitical conflicts. Amidst precarious circumstances, we remain steadfast in our two-pronged approach anchored on nimbleness,” Chief Executive Officer Delfin Angelo C. Wenceslao said in a statement.

Last year’s financial performance excludes the after-tax impact of one-off gains, which in 2020 amounted to P1 billion, related to the termination of a joint venture agreement as well as the adjustment of tax expense in 2021 due to the Corporate Recovery and Tax Incentives for Enterprises Act or CREATE Law.

“We remain mindful of risks through maintaining a more-than-capable balance sheet, implementing a business continuity plan, and prioritizing the welfare of stakeholders while hand-in-hand remaining on track with our expansion goals to capture opportunities beyond current risks,” Mr. Wenceslao said.

In the company disclosure, DMW said its core net income was also 12% higher than the pre-pandemic figure of P1.7 billion in 2019.

“Note that DMW booked earnings — bulky land sales amounting to P787.6 million and P935.9 million in 2021 and 2019, respectively. As such, core earnings in those fiscal years are closely comparable,” it added.

Its recurring income, consisting of rentals from land, building, and other revenues, improved 2% to P1.99 billion, accounting for 58% of total revenues.

Meanwhile, residential revenues declined 18% P615 million year on year, due to revenue recognition timing.

“Pixel Residences was already fully turned over as of 2021 and most of the residential revenue bookings for the year was accounted for by MidPark Towers,” DMW said.

Despite the revenue decline, residential gross profit climbed 14% to P388 million due to a higher gross profit margin of 63% in 2021 compared with 45% in 2020.

The margin improvement resulted from the markedly higher selling price per square meter of MidPark Towers compared to that of Pixel Residences.

DMW completed a P787.6-million land sale transaction, which it said boosted revenues and fortified its balance sheet.

In the fourth quarter, DMW reported a 79% increase in commercial building gross leasable area (GLA), expanding to 162,351 square meters (sq.m.) as of end-2021 from 90,712 sq.m. in 2020.

In the fourth quarter, 8912 Asean Ave. building, its largest office development, and the 58 Jupiter St. mixed-use building were both completed.

“Located along Jupiter Street in Makati City, 58 Jupiter is our first constructed commercial building outside of Aseana, further advancing our diversification efforts,” DMW said.

Landers also signed a 25-year contract of lease for a 15,064-sq.m. parcel of land in Aseana City. DMW said the membership shopping chain, with its significant following, is an anticipated draw.

“These developments are expected to contribute markedly to DMW’s recurring earnings moving forward,” the company added.

At the stock exchange, DMW shares remained unchanged at P6.86 apiece on Thursday. — Luisa Maria Jacinta C. Jocson