GOTIANUN-LED Filinvest Development Corp. (FDC) saw its attributable net income fall by 29% to P8.5 billion in 2020 as it was “not spared by the severe impact of the COVID-19 (coronavirus disease 2019) pandemic.”

“Coming from a landmark year in 2019, the COVID-19 pandemic brought an unexpected pause to our 2020 plans,” FDC President and Chief Executive Officer Lourdes Josephine Gotianun-Yap said in a statement on Monday.

However, the company said its mixed portfolio allowed it to finish the year with healthy financial results.

Consolidated net income amounted to P11.5 billion, dipping by 28% from the P15.9 billion seen in 2019.

Banking arm EastWest Banking Corp.’s income contribution amounted to P6.4 billion, net of eliminations, or 46% of FDC’s bottom line. Its share is four percent higher than the P6.2 billion contributed in 2019 due to gains in trading and higher margins from the low interest rate environment.

EastWest’s net interest income went up by 23% to P26.5 billion as the banking business sustained a net interest margin of 8.1%. Non-interest income inched down by five percent to P6.9 billion due to the drop in fees, modified payment schemes, and assistance to customers.

The bank also increased its provisions for losses to P9.8 billion from P4 billion the previous year.

Meanwhile, the company’s real estate business and hospitality segments accounted for P5.3 billion or 38% of FDC’s net earnings.

The combined income contribution of real estate firms Filinvest Land, Inc. (FLI) and Filinvest Alabang, Inc. (FAI) fell by 29% to P6 billion in 2020 from P8.4 billion the previous year.

“The residential segment was affected by lower sales take-up, completion delays and the grace period granted to the homebuyers during the strict lockdown period, which delayed real estate sales recognition,” FDC said.

Sale of lots, condominium, and residential units totaled to P10.5 billion, declining by 51% from the P21.5-billion sales in the previous year.

“The group’s office leasing business was less affected by the restrictions as the Filinvest buildings remained operational throughout the pandemic as against most parts of the malls which were closed for the duration of the strict community quarantines,” the company said.

Rental revenues declined by 11% to P6.7 billion from P7.46 billion. The decline in retail mall revenues offset the growth in office leasing. Filinvest said it waived rental payments for non-operational establishments during the community quarantine periods.

“FLI was able to successfully raise 3-year and 5.5-year P8-billion fixed-rate peso-denominated retail bonds in November 2020 as initial issuance from FLI’s (Securities and Exchange Commission)-approved bond shelf registration for a series of bond issuances of up to an aggregate amount of P30 billion,” the company said.

FLI will also be offering a real estate investment trust this year through subsidiary Cyberzone Properties, Inc.

“FLI’s entry into the REIT (real estate investment trust) market complemented by the steadfast expansion of its residential and recurring income business is seen to contribute to FDC’s overall growth this year,” FDC said.

Hospitality arm Filinvest Hospitality Corp. was “the most affected by the pandemic in the group,” incurring a net loss of P731 million. Revenues decreased by 63.7% to P1.2 billion from P3.31 billion as occupancy rates dropped.

“Five out of the six hotels and resorts under the Filinvest group’s portfolio remained in operation throughout 2020, but on [a] very limited basis due to the travel and mobility restrictions,” the company said.

Meanwhile, power subsidiary FDC Utilities, Inc. posted an income contribution of P1.9 billion or 14%, going down by 23% from P2.5 billion seen in the previous year.

FDC Utilities’ revenues amounted to P8.5 billion, 17% lower than P10.1 billion in 2019 as customer demand fell, especially in the second quarter.

“Amidst the difficult business environment in 2020, we are pleased that we were able to strike a balance in our overall performance. Some businesses took a harder hit, but other businesses continued to deliver solid performances,” Ms. Gotianun-Yap said.

FDC said it is looking at infrastructure and sustainable options such as solar energy, water, and wastewater projects for its portfolio expansion.

On Monday, FDC shares at the exchange rose by 2.24% or P0.19 to close at P8.69 each. — Keren Concepcion G. Valmonte

THE Philippine Stock Exchange, Inc. (PSE) added three securities to the list of firms compliant with Islamic guidelines on finance for the latest quarter ending March 25.

In a memorandum released on Monday, the PSE added Converge Information and Communications Technology Solutions, Inc., Global Ferronickel Holdings, Inc., and SPC Power Corp. to the list of Shari’ah-compliant securities.

The PSE conducts quarterly screenings on listed securities’ Shari’ah compliance to make investment opportunities in the local bourse inclusive to Muslim investors.

“The exchange engaged the services of IdealRatings, Inc. to screen listed companies in accordance with the standards for Shari’ah compliance as stipulated by the Accounting and Auditing Organization for Islamic Finance Institutions,” the PSE said.

Ideal Ratings specializes in checking securities for their compliance with Shari’ah law.

The screening process involves checking firms on their engagements with businesses in adult entertainment, alcohol, cinema, defense and weapons, financial services, gambling, gold and silver hedging, interest-bearing investments, music, pork, and tobacco.

Income earned by companies from these engagements must be less than five percent.

Firms also undergo a financial ratios screening. Cash or interest-bearing deposits and interest-bearing debt of a company should not go beyond 30% of its market capitalization.

A total of 57 firms passed the criteria, the same number of firms which passed the screening last quarter.

Companies bumped off the list were Concepcion Industrial Corp., Euro-Med Laboratories Phil., Inc., and Xurpas, Inc. — Keren Concepcion G. Valmonte