Mid-market focus boosts FDC net profit by 23%

FILINVEST Development Corp. (FDC) recorded a 23% earnings growth to P12 billion in 2019, lifted by higher profits from its banking and property segments as it focused on the middle market.

In a statement on Wednesday, the Gotianun-led holding company said its consolidated revenues last year rose 15% to P74.85 billion. Gross expenses also climbed 14% to P59.86 billion.

Primary drivers of growth were FDC’s banking and property units. East West Banking Corp. contributed P6.1 billion in net income, 45% higher than the level in 2018.

The property segment, which includes both real estate and hospitality businesses, made up “more than half of FDC’s bottomline.” The exact contribution of the property segment was not disclosed, but Filinvest Land, Inc. (FLI) said in a statement on Monday it booked a 7% earnings growth to P6.28 billion last year.

Power unit FDC Utilities, Inc. (FDCUI) added P2.5 billion in net income, up 20% year-on-year.

“The year 2019 was a banner year for FDC. We met our goals for our core businesses, gained further traction in the new businesses and achieved record financial results,” FDC President and Chief Executive Officer L. Josephine G. Yap said in the statement. “This was done through our continued focus on the delivery of products and services to the dynamic yet underserved middle market.”

Broken down, EastWest Bank saw a 21% growth in revenues and other income to P36.4 billion last year. This was due to a 12% increase in net interest income and a 16% rise in non-interest income.

“EastWest Bank recorded its most profitable year in 2019 following a consumer-led loan portfolio that expanded remarkably well. It also maintained its top-tier position in profitability with a return on equity of 14%,” FDC Chairman Jonathan T. Gotianun said in the statement.

Real estate arm FLI increased its lot, condominium and residential unit sales by 5% to P21.5 billion. Rental revenues from FLI and Filinvest Alabang, Inc. likewise rose 21% to P7.5 billion due to the expansion of its leasing portfolio.

Hotel operations, which is under FDC’s property segment, recorded a 24% growth in revenues to P3.3 billion after it opened new facilities in 2018 and 2019. Filinvest Hospitality Corp. now has six properties in its portfolio.

FDCUI had a 17% climb in revenues to P10.1 billion. This was due to an increase in sales volume from higher customer demand and gains from selling replacement power to other power generators.

This year, FDC said the coronavirus disease 2019 (COVID-19) pandemic has led to operational disruptions that may slow its businesses down.

“The COVID-19 pandemic…has put an unexpected pause to our 2020 plans. Our attention was diverted as we worked closely with the public and private sectors to mobilize resources towards health care, testing and community assistance,” Ms. Yap said.

“Nevertheless, the Filinvest group is in a solid position to address the forthcoming challenges posed by this crisis,” she added.

FDC and its subsidiaries have committed P100 million in fighting the COVID-19 pandemic through its foundations.

Shares in FDC at the stock exchange slipped 18 centavos or 2.20% to P8.02 each on Wednesday. — Denise A. Valdez