SEAFRONT Resources Corp. reported that its net income last year fell by 24% to P20.13 million as its revenues during the period fell by 6.7% to P32.7 million.

The company said its dividend income dropped by 6.8% to P31.7 million due to lower dividends from Hermosa Development Corp. (HEDC), in which it holds an 11.3% interest as of end-2021.

In 1997, Seafront Resources entered into a project shareholders’ agreement with five other companies led by Investment and Capital Corporation of the Philippines and Penta Capital Investment Corp.

Through HEDC, the project aimed to develop 500 to 600 hectares of raw land in Hermosa, Bataan into a new township consisting of industrial estates, residential communities, a golf and country club and a commercial center.

HEDC started its land development in 2002 and has developed a total of 162 hectares in the industrial area. The remaining 323 hectares are allocated for leisure.

From 2017 to 2021, HEDC sold a total of 1,002,227 square meters (sq.m.) for a gross revenue of P3.46 billion.

HEDC has already declared and paid a total of P1.05 billion of dividends, where Seafront Resources received its share amounting to P119 million.

“The management of HEDC is taking all efforts to sell its saleable property, proceeds of which will be used to finance the development of the undeveloped portions of the property. Portions of the proceeds were also declared as dividends to its stockholders,” the company said in a report.

“The Philippine economy is still affected by the economic crisis, resulting in fluctuating foreign exchange rates and increased stock market uncertainties. Uncertainties remain as to whether the country will continue to be affected by regional trends in the coming months,” it added.

Being an investment holding company, Seafront Resources said it is “exposed to market risk or loss on future earnings due to volatility in financial instruments due to uncertainties in the capital market.”

The company said that its market risk emanates from its holdings in debt and equity securities.

“To address this, the company closely monitors the prices of its debt and equity securities as well as the macroeconomic and entity-specific factors which could directly or indirectly affect the prices of these instruments,” it added.

Seafront Resources said that there were also risks associated with the operations of HEDC.

“HEDC is a master planned township consisting of industrial estates, residential communities, and commercial centers. COVID-19 (coronavirus disease 2019) may affect the manpower and operating schedules of the locators in the ecozone, which may lead to negative financial impact in their businesses,” the company said.

“To mitigate this risk, Seafront Resources, together with its partners will work closely with HEDC administration to ensure that the locators have their respective business continuity plans in place,” it added.

Over the pandemic, the company said it is working to ensure that its business operations remain unhampered by the continuous lockdowns.

“The company has recognized the health and business risks posed by the virus to the general public and the need to join the collective effort in mitigating the spread of COVID-19,” Seafront Resources said.

“In the face of this global crisis, the company remains collected and vigilant as it operates and maintains mitigation efforts to help safeguard the health and safety of its employees. Considering the evolving nature of this outbreak, the company is continuously assessing at this time the impact to its financial position, performance and cash flows,” it added. — Luisa Maria Jacinta C. Jocson