(May 7, 2020) - Robinsons Land Corp. (RLC), one of the Philippines’ leading real estate companies, posted an 82% in net income growth to PHP3.34 billion from PHP1.8 billion in 1Q 2019.

For the first three months ended March 31, 2020, RLC’s consolidated revenue surged by 70% to PHP11.57 billion from PHP6.79 billion, while overall EBITDA grew by 59% to PHP6.00 billion from PHP3.77 billion in the same period. Consolidated EBIT surged by 82% to PHP4.73 billion in the said period.

The robust earnings growth was mainly driven by RLC’s residential business as it changed its accounting policy to align it with the industry practice. This resulted in the residential business posting a 241% yearon-year increase to PHP6.70 billion and contributed 58% of the consolidated revenue. However, the investment portfolio posted flat revenues in the first three months of the year because of the operational disruptions caused by the implementation of Enhanced Community Quarantine (ECQ) in mid-March to curb the spread of the new corona virus. RLC’s investment portfolio contributed 42% of the consolidated revenue for the quarter.

As of March 31, 2020, RLC’s financial position remains solid with over PHP6 billion of cash balance, and net gearing ratio remaining low at 0.38x. Total assets stood at PHP195 billion while Shareholders’ Equity was at PHP104 billion.

“RLC continues to be optimistic about its growth outlook as it builds a larger and more diversified platform. Our strong fundamentals and solid balance sheet will help us navigate the challenges brought about by the new corona virus. We will also seek opportunities and new ways of doing business to deliver long-term sustainable value. As we emerge from the enhanced community quarantine, our priorities are the welfare and wellbeing of our employees, business partners, and patrons,” said RLC President and CEO Frederick D. Go.

MIXED PERFORMANCE FOR INVESTMENT PORTFOLIO
RLC’s Malls Division revenues posted a decline of 8% to PHP2.87 billion while EBITDA was marginally down by 1% to PHP2.06 billion. Same mall rental growth was down by 6% as the company temporary closed all 52 malls in cooperation with the government’s ECQ directives in the second half of March 2020. Allowed to open during the ECQ are essential establishments only (supermarkets, drugstores, banks, food deliveries and convenience stores). RLC waived rentals for non-operational tenants during the ECQ period. Mall EBIT in 1Q20 weakened by 5% to PHP1.14 billion. Total mall leasable space currently stands at 1.5 million sqm with over 9,000 retailers. No new malls were opened during this period.

The Office Buildings Division has been RLC’s best performing division for the period as it registered the highest growth in the investment portfolio. Revenue increased by 27% to PHP1.43 billion from PHP1.12 billion in 1Q19 mainly because of the successful leasing activities in new buildings namely, Cybergate Magnolia located in Magnolia mixed-use complex, Luisita 2 in Tarlac and Giga Tower in the Bridgetowne Estate. EBITDA grew by 34% to PHP1.20 billion while EBIT in the first quarter surged by 42% to PHP985 million. The Office Buildings division now has 23 operational sites with locations in the cities of Pasig, Quezon, Taguig, Mandaluyong, Makati, Cebu, Davao, Naga, among others.

Robinsons Hotels and Resorts Division (RHR) is the second business unit of RLC that has been heavily affected by the ECQ implementation. In the first three months of the year, RHR posted a 10% decline in revenues to PHP468 million because slower business and cancellations due to the corona virus and the disruption brought about by the Taal Volcano eruption. The Division’s EBITDA dropped by 51% to PHP81 million versus PHP165 million in 1Q19. During the ECQ period, about 12 of RHR hotels located in Metro Manila, Metro Cebu, Bacolod and Iloilo remained open to accommodate BPO clients and returning overseas Filipino workers. Currently, the average occupancy rate of all RHR hotels combined is around 79% across its ecosystem of over 3,000 room keys.

The warehouse business under the Industrial and Integrated Developments Division (IID) is registering continuous growth. In the 1st quarter for the year, IID consolidated revenues surged by 96% to PHP96.4 million driven mainly by its two warehouse facilities in Sucat, Muntinlupa and in Calamba, Laguna. IID EBITDA and EBIT rose by 77% and 48% to PHP49.8 million and PHP36.5 million respectively. IID has 77,000 sqm of gross leasable space and continues to build more warehouses to increase its portfolio. For the development portion, IID’s revenue increased by 130% to PHP45 million as it recognized a deferred gain on sale to joint venture entity, Shang Robinsons Properties, Inc.

STRONG PERFORMANCE FOR RESIDENTIAL AND NEW PROJECT LAUNCHES Effective January 2020, RLC’s Residential Division recognized revenue based on a buyer’s equity threshold of 10% from the previous 15% to be more reflective of the operating performance and align with the domestic industry practice of its peers. As a result, realized revenues significantly grew by 241% to PHP6.70 billion compared the previous year; while EBITDA and EBIT accelerated by 327% and 335% to PHP2.61 billion and PHP2.60 billion, respectively. RLC’s sales take-up for the first quarter ending March was steady at PHP3.90 billion with three new projects worth PHP10 billion launched during the period namely Sapphire Bloc South in Ortigas Center and Sierra Valley Gardens buildings 1 & 2 located in Cainta, Rizal.

CHINA PROJECT CONTINUES STELLAR PRESALES PERFORMANCE ON NEWLY LAUNCHED UNITS
Overseas, the Chengdu Ban Bien Jie project has seen significant progress in the 1Q20 as RLC was able to acquire the sales permits for its villas/ townhouses for Phase 1 and some of the residential high-rise apartments for Phase 2. Pre-selling has commenced for these two segments and to date, all 64 townhouses are fully sold while the high-rise apartments for Phase 2 are 94% booked. The success is a testament to RLC’s capability to do business successfully overseas. The Company expects that recognition of revenues from the Chengdu project will take effect next year.

For the 1st quarter, RLC spent PHP5.91 billion of capital expenditure for the Philippine operations for the development of malls, offices, hotels and warehouse facilities, acquisition of land and construction of its residential projects. Due to the effects of the ECQ and the expected slow transition back to normal life, RLC has assessed its new projects pipeline. Projects that have not commenced will no longer be pursued for now. For the full year, RLC has pared down its planned capital expenditure to P24 billion for its domestic operations.

Currently, RLC has 788 hectares of land bank throughout the country. The Company continues to search for properties to acquire all over the country for the expansion of its many businesses. RLC is also open to engage with property owners and developers to do joint venture projects