GLOBAL-ESTATE Resorts, Inc. (GERI) delivered a five percent decline in attributable profit amid double-digit growth in revenues for the second quarter of the year.
In a regulatory filing, the integrated tourism and leisure developer of tycoon Andrew L. Tan showed that net income attributable to the parent reached P387.65 million in the April to June period, lower than the P406.21 million posted in the same period a year ago.
Second-quarter revenues increased 23% to P2.23 billion, but costs and expenses rose at a faster clip at 26% to P1.78 billion. The company saw costs of hotel operations balloon to P170.44 million for the period, from only P25.83 million in the same quarter in 2018.
On a six-month basis, GERI’s attributable profit climbed 16% to P865.13 million, against the P744.74 million seen during the same period in 2018.
Revenues jumped 22% to P3.9 billion, excluding non-recurring gains. Costs and expenses also increased by 25% to P3.1 billion, mainly due to higher rentals, hotel operations, operating expenses and income tax.
For the first half, residential sales, which accounts for almost 70% of GERI’s revenues, were flat at P2.8 billion, while the office and hotel units posted strong growth.
“Our growth story hinges on our rental and hotel businesses, which have been growing rapidly this year. On the rental side, the office segment in particular saw a huge swing in revenues due to the fact that both office towers in Southwoods City have already begun realizing full-year rentals,” GERI President Monica T. Salomon said in a statement.
Rental income in the first half surged 113% to P377 million by end-June, as the company benefited from the completion of Southwoods Office Towers in Biñan, Laguna. The two-tower project covers about 46,000 square meters in leasable space catered toward the business process outsourcing sectors.
Hotel revenues also jumped 286% to P484 million during the semester, following the opening of Twin Lakes Hotel in Tagaytay late last year.
“On the hotel side, the opening of Twin Lakes Hotel around late last year have boosted revenues significantly as the development continues to gain popularity amongst people visiting Tagaytay,” Ms. Salomon said.
Twin Lakes Hotel added around 130 rooms to GERI’s portfolio, complementing Savoy Hotel Boracay and Fairway & Bluewater in its Boracay Newcoast township.
GERI is part of listed property firm Megaworld Corp., which in turn is a subsidiary of Mr. Tan’s Alliance Global Group, Inc. The conglomerate also has interests in liquor, gaming, quick-service restaurants, and infrastructure.
Shares in GERI were flat at P1.36 each at the stock exchange on Tuesday. — Arra B. Francia