GERI earnings fall 23% as pandemic locks down hotels

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GLOBAL-ESTATE RESORTS, Inc. (GERI), the listed subsidiary of Megaworld Corp., posted a 23% drop in attributable profits to P296.84 million for the second quarter, as its hotels were closed during the pandemic-induced quarantine starting in mid-March.

In a regulatory filing Monday, GERI said its total revenues declined 38% to P1.39 billion, mostly owing to the 96% plunge in hotel revenues to P12.39 million.

Revenues from real estate sales fell 29% to P1.13 billion, and rental income slid 18% to P160.88 million.

Year to date, the company’s attributable net income fell 37% to P544.8 million, as consolidated revenues declined 29% to P2.91 billion.

Excluding non-recurring gains, GERI’s net income would’ve been P728 million, down by 9% from last year.

Real estate sales decreased 23% to P2.17 billion, coming from a mix of lot and condominium unit sales, mostly in projects in Aklan, Cavite, Rizal and Laguna.

Hotel revenues were the hardest hit, falling 67% to P161.5 million, due to the closure of all GERI’s hotels since mid-March.

Rental income dipped 8% to P347 million because aside from the quarantine, mall operations were affected by the eruption of Taal Volcano in January.

Despite the slowdown in its top line, the company managed to reduce its costs and expenses by 30% to P2.2 billion.

“[W]hile the country was placed on strict quarantine, we saw aggressive take-ups of our provincial projects. In fact, on the average, our second-quarter sales are 61% of what we have booked for the entire first half of 2020. And we still have enough inventory to address the demand for residential projects in these areas,” GERI President Monica T. Salomon said in a statement.

“[A]s soon as the quarantine measures were relaxed in June, we saw a steep climb on the sales of our commercial and village lots in Boracay Newcoast. Buyers now prefer residential and leisure products in nature-rich settings outside of Metro Manila,” she added.

GERI operates eight integrated tourism developments across the country, located in Batangas, Laguna, Cavite, Las Piñas City, Boracay, Iloilo and Rizal.

Shares in GERI at the stock exchange grew one centavo or 1.27% to close at 80 centavos each on Monday. — Denise A. Valdez