Filinvest Dev’t earnings dip in 2nd quarter as costs climb

FILINVEST Development Corp. (FDC) saw a slight decline in its attributable profit for the second quarter, as higher costs outpaced the single-digit increase in revenues.

In a regulatory filing, the Gotianun-led conglomerate said net income attributable to the parent stood at P3.35 billion in the April to June period, 2% lower year on year.

Total revenues and other income rose 8% to P20.6 billion, slower than the 15% growth in total costs and expenses to P15.35 billion.

On a six-month basis, FDC’s attributable net income climbed 19% to P6.13 billion while total revenues and other income grew 15% to P41.61 billion.

“We are pleased with the results of our various business lines, with notable improvements resulting from the ramp up of our leasing, hotel and power businesses,” said FDC President and Chief Executive Officer Josephine G. Yap in a statement.

“We are positive that the trajectory is sustainable in the second half of the year as demand for our products and services across the different business lines continue to be strong,” she added.

FDC’s banking and financial services unit accounted for 42.1% of total revenues and other income for the first half, followed by real estate operations at 37.3%. Power, sugar, and hotel operations accounted for the remaining 12.7%, 4%, and 3.9%, respectively.

East West Banking Corp.’s revenues and other income jumped by 25% to P17.5 billion, due to higher non-interest income from fees and commissions. The bank’s first-half net income also grew 33% to P2.69 billion.

“With inflation easing and interest rates tapering off, we anticipate that the second half of the year will be more positive and allow us to sustain our performance,” FDC Chairman Jonathan T. Gotianun said in a statement.

Rental revenues from Filinvest Land, Inc. (FLI) and Filinvest Alabang, Inc. surged 31% to P3.7 billion, thanks to the completion of six office buildings covering 118,000 square meters (sq.m.) in gross leasable area in 2018.

On its own, FLI delivered a 19% uptick in gross revenues to P12.62 billion, while net income went up 16% to P3.21 billion in the first half. FLI traced the performance to a 30% increase in rental revenues to P3.38 billion, alongside a 25% rise in real estate sales to P8.43 billion.

Meanwhile, net income from hotel operations jumped 62% to P203.6 million. Revenues gained 24% to P1.6 billion, due to the opening of Crimson Resort and Spa Boracay in 2018 and Quest Tagaytay in April. The company now has about 2,600 rooms under its network, which is seen to increase to 5,000 by 2023.

Under the power business, revenues added 28% to P5.3 billion due to higher demand and the sale of replacement power to other power generators. Net income accordingly surged 86.7% to P1.41 billion.

FDC operates a 405-megawatt clean coal plant in Misamis Oriental, 302 megawatts of which are contracted under mostly long-term power purchase agreements.

The sugar unit delivered a net income of P260.4 million, 6.3% higher year on year, despite a 22% drop in revenues due to lower volumes sold.

Shares in FDC closed flat at P13.80 each at the stock exchange on Thursday. — Arra B. Francia