MANILA – Filinvest Development Corp. (FDC)’s revenues grew nine percent for the first quarter of 2014 compared to the same period last year with real estate subsidiaries raking in the sales during the period.
In a report to the Philippine Stock Exchange, FDC’s first quarter revenues on a consolidated basis hit P9.05 billion from P9.02 billion recorded during the same period a year ago.
The company recorded a consolidated net income of P1.27 Billion in 1Q 2014.
Real Estate Business
Top line growth of most subsidiaries remained strong, led by the real estate business, which includes listed subsidiary Filinvest Land, Inc. (FLI) and Filinvest City developer Filinvest Alabang, Inc., posting a year-on-year gain of 11% in revenues to P4.22 billion from P3.81 billion in the first quarter.
The rise in real estate revenue was driven by growth across all types of construction– high rise buildings, mid-rise buildings and horizontal housing.
FLI currently has residential projects in Davao, Cagayan de Oro, Butuan and Zamboanga.
Power generation business
FDC’s power affiliate, FDC Utilities Inc. (FDCUI) has 405 megawatt clean coal plant rising in Misamis Oriental and could bring more power generation requirements for the Mindanao region.
FDCUI, the conglomerate’s power division broke ground on its 405MW power plant in Mindanao late last year and will be operational by early 2016. Further, in November 2013, FDCUI was awarded 40MW Independent Power Producer Administrator (IPPA) contract for the Unified Leyte Geothermal Power Plant’s contracted capacity for turnover in November 2014.
Banking subsidiary
FDC’s banking subsidiary East West Bank’s (EWB) net interest income, representing majority of its earnings, increased by 24% in the first quarter as a result of strong growth in its loan portfolio heavily focused on consumer and middle-market segments.
EWB’s Non-interest income, excluding trading, which is largely composed of recurring fees income, increased by 23% as against the same period last year. Trading income was lower in 1Q 2014 compared to 1Q 2013 in line with the industry-wide decline in trading gains.
“We have always aimed to focus and grow net interest income at East West Bank as this is considered our core business, a more steady and regular revenue source and a positive indicator of what we can expect in the future,” said FDC President and CEO Josephine Gotianun-Yap in a statement sent to the regional newspaper Mindanao Examiner.
Jonathan Gotianun, Chairman of FDC, stated that East West Bank is at the height of its branch/store expansion program in 2014.
“We have already reached 376 stores and expect to attain 400 by year end. The expansion program will temporarily put pressure on the bank’s earnings but will catapult it to higher levels once the branches become more productive and mature,” he added.
Solid Financials
FDC’s financial condition remained healthy at the end of March 2014 with equity of P86.12 billion. Total assets grew 5% to P285.01 billion from P270.76 billion in the previous period.
The conglomerate ended the quarter with a cash balance of P33.61 billion and long-term debt of P66.10 billion.
FDC ended the period with a long term debt to equity ratio of 0.77 and net debt to equity ratio of 0.38. Debt increased slightly as a result of the successful P8.8 billion bond issuance on January this year, proceeds of which were earmarked for investments in power and hotels as well as for refinancing existing debt.
Real estate and banking represented the bulk of 1Q 2014 revenues at 47% and 40% respectively. Sugar operations contributed 11% while hotels contributed 3% of total revenues.
Both sugar and hotel businesses posted revenue gains. Notably, hotel revenues were up 5% over the same period last year due to sales generated by newly opened hotel Crimson Alabang, which formally began commercial operations in March 2013.
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