2021 Message to Shareholders
Lance Y. Gokongwei
Chairman
Frederick D. Go
President & CEO
Lance Y. Gokongwei
Chairman
Frederick D. Go
President & CEO
2021 was a year of strategic milestones for Robinsons Land Corporation (RLC). As the effects of the global pandemic raged on, the Company braved headwinds to sustain business operations, and list its flagship real estate investment trust. We seized opportunities to invest prudently, allocating and raising capital for the long term, and advancing sustainability towards a strong foundation for the future.
Amid enhanced quarantine conditions, RL marked the historic listing of its flaqship real estate investment trust, RL Commercial REIT, Inc. (RCR). RCR made its successful debut on the Philippine Stock Exchange as the country's largest REIT in market capitalization, asset size, and portfolio valuation. It holds the record of having the widest geographical reach spanning 9 cities and the longest land lease tenure of up to 99 years. The landmark offering drew an overwhelming response from the capital markets, attracting strong institutional and retail interest for its size and liquidity. We are thankful to the investing public for this expression of confidence in the Robinson Land brand, reputation, and track record.
The RCR IPO was named the Best IPO in the Philippines at the 2021 Asset Triple A Country Awards. The Asset’s annual recognition represents the industry’s most prestigious awards for banking, finance, treasury and the capital markets. RCR also emerged as the Philippines’ Best Sustainable REIT in the 2022 International Investor Awards, and was included in the FTSE Global Equity Index Series for Asia Pacific.
In the most significant single event in the Company’s recent history, the listing of RCR unlocks the intrinsic value of RLC’s office assets and opens a myriad of future opportunities for the Company. The proceeds of Php23.4 billion from the initial public offering (IPO) will be reinvested by RLC into its various business units and a strategic land banking program that will drive long-term profitability.
Capital raised from the RCR IPO further strengthened RLC’s financial position. Total Assets posted at Php227.9 billion and Shareholder’s Equity expanded to Php130.3 billion. Its net gearing ratio of 23% is an industry low, while earnings per share reached Php1.55, 53% higher than last year and about 93% of pre-pandemic record.
Dividends remain the centerpiece of our shareholder return policy. In 2021, we paid out more than 20% of the Company’s net recurring income. Furthermore, as part of our key strategy in preserving and maximizing shareholder value, we have launched a Php3.0-billion share buyback program, which underscores our confidence in RLC’s growth prospects.
Notwithstanding the volatility of economic uncertainty, RLC delivered robust financial results. For calendar year 2021, consolidated revenues increased 30% to Php36.5 billion with strong organic growth fuelled by improved customer demand across RLC’s core businesses, the sale of parcels of land within the Bridgetowne East Destination Estate, and the continued success of the Chengdu Ban Bian Jie project in China. EBITDA grew 9% to Php15.0 billion, pushing overall EBIT up by 14% to Php9.7 billion. This translated to a consolidated net income of Php8.5 billion, 62% greater versus the same period last year. Meanwhile, net income attributable to equity shareholders of the parent entity rose by 53% to Php8.1 billion.
While business conditions improved in most of 2021, the surging cases of new coronavirus variants in the second and third quarters led to subdued recovery in the retail and hospitality sectors.
Robinsons Malls generated 23% of total consolidated revenues at Php8.3 billion, 3% lower versus 2020, while EBITDA dropped 6% to Php3.9 billion. In 4th quarter of 2021, under a more relaxed quarantine classification, mall revenues increased 22% versus the same period last year, with foot traffic improving to 65% of 2019 levels from a low of 20% in 2020. Mall operating fundamentals are expected to rebound stronger in 2022 as widespread vaccinations, along with pent-up demand, spur in-store shopping and revenge spending.
In response to the increasing role of technology on customer lifestyles, we focused on enhancing the shopping experience by scaling our digital capabilities. Robinsons Malls launched MallDash, a hyperlocal online shopping platform that enables customers to purchase from multiple Robinsons Malls partner tenants in a single transaction. With its quick, on- demand delivery service, MallDash enables easy, safe, and convenient shopping. In addition, Robinsons Malls introduced the RMalls+ App to create seamless online-to-offline customer journeys.
In 2021, Robinsons Malls has steadily grown its presence in the country, increasing total leasable space by 4% to 1.58 million sqm, with the opening of Robinsons Place La Union, expansion of Robinsons Place Dumaguete and the re-opening of Robinsons Place Tacloban. Featuring surfing decors and ocean murals, Robinsons Place La Union is the biggest mall in the province with a wide variety of fashion outlets and dining establishments. The full-service mall takes pride in showcasing the best of the Ilocos Region.
Robinsons Malls closed 2021 with a system-wide lease rate of 91% across 53 lifestyle centers nationwide.
With the gradual easing of travel restrictions and the re-opening of some tourist destinations, Robinsons Hotels and Resorts received demand for quarantine accommodations and long- stay bookings. Revenues rose 11% to Php1.2 billion versus a year ago. EBITDA accelerated 60% to Php245.7 million on the back of operational efficiencies; while depreciation from new hotels dragged EBIT to a loss of Php172.5 million.
As the worst effects of the global pandemic ebb, Robinsons Hotels and Resorts opened its maiden property under an upscale version of its own homegrown brand, Grand Summit Hotels. Located in the Tuna Capital of the Philippines, Grand Summit General Santos was formally unveiled to the public last October 15, 2021. It welcomes guests to the grand lifestyle through deluxe rooms and suites, a fine array of amenities and services, and exceptional cuisine in Café Summit. Conveniently located beside Robinsons Place General Santos, Grand Summit Hotel is the best choice for travelers looking for a complete, upscale hotel experience in General Santos.
Robinsons Hotels and Resorts ended 2021 with over 3,200 keys across 21 company-owned hotel and leisure properties. Moreover, there are four (4) Go Hotels with 800 rooms under franchise agreements.
Sustaining topline results on the back of a resilient Business Process Outsourcing (BPO) industry, Robinsons Offices finished the year strong and contributed 18% to consolidated revenues. Stable and high occupancy across existing assets, as well as rental escalations, carried revenues to a 9% growth to end at Php6.5 billion. EBITDA closed at Php5.7 billion, while EBIT ended at Php4.7 billion, up by 11% and 13%, respectively.
We have expanded the breadth of our office portfolio with the opening of the PEZA-registered Cyber Omega in Ortigas CBD, Cybergate Iloilo Tower 1, a premier office development in Iloilo City, and Bridgetowne East Campus One, home of the largest telco-neural data center in the Philippines.
2021 closed with a 93% system-wide lease percentage across 28 office developments spanning approximately 688,000 sqm of net leasable space. Meanwhile, our flexible workspace business under the work.able brand continued to operate five (5) sites in Pasig City, Quezon City and Taguig City with a total of around 1,200 seats.
With its seven industrial facilities, Robinsons Logistics and Industrial Facilities (RLX), capitalized on the rising opportunities in the logistics sector which served as a bright spot in an otherwise battered economy. RLX achieved a 50% surge in revenues to Php353.6 million. Similarly, EBITDA and EBIT climbed 76% and 89% to Php323.7 million and Php249.3 million, respectively.
Meanwhile, Robinsons Land crystalized the value of its destination estates from the sale of prime lots to Shang Robinsons Properties, Inc. (SRPI) and RHK Land Corporation (RHK), two of the most recognized real estate names in Asia. Realized revenues reached Php3.0 billion in 2021 yielding an EBITDA of Php1.6 billion and EBIT of Php1.5 billion. SRPI and RHK acquired a total of over 2.6 hectares of land inside the 31-hectare master-planned Bridgetowne Destination Estate.
After three decades of growth and expansion, Robinsons Land’s residential arm embarked on a rebranding strategy for its vertical developments. In 2021, it launched RLC Residences – a single, integrated brand identity that empowers Filipinos to “Raise, Live, and Connect” through beautiful, well-designed homes. With this simplified structure and the merging of resources, we expect to increase brand mindshare and deliver improved seamless customer journeys.
RLC Residences and Robinsons Homes posted combined realized revenues of Php6.3 billion in 2021, contributing 17% to consolidated revenues. EBITDA and EBIT ended at Php2.3 billion and Php2.1 billion, respectively.
Net pre-sales, excluding those from joint venture projects, escalated by 48% versus the same period last year to end at Php10.8 billion. Growth was primarily driven by the notable performance of SYNC Y Tower in Pasig City, Galleria Residences Tower 3 in Cebu, Sierra Valley Gardens 2 in Cainta, and The Sapphire Bloc South Tower in Ortigas CBD. In 2021, RLC launched three (3) new residential projects – Forbes Estates Lipa in Batangas, SYNC Y Tower in Pasig City, and Woodsville Crest’s Oak Building in Parañaque.
Meanwhile, RLC recognized Php10.94 billion in realized revenues from its Chengdu Ban Bian Jie project in China, following the turnover of condominium units in Phase 1. We have sold 95% of the project, while construction for Phase 2 neared completion. Furthermore, RLC has recovered 89% of its invested capital with the repatriation of US$200 million in 2021.
The Company spent a total of Php24.8 billion in capital expenditures in 2021 for the development of malls, offices, hotels and industrial facilities, construction of residential projects, land acquisitions, and for new investments for its local operations.
Beyond our financial commitments, we take pride in doing business that contributes to the greater good. The Company served as a leading catalyst of change towards a more resilient and equitable future, investing in sustainable developments that promote inclusive growth for people and planet.
In the face of challenging economic headwinds, we continue to uphold our ‘people-first’ agenda. We instituted remote work arrangements and supported a digital workplace to offer the flexibility needed by thousands of our employees. The Company also offered free access to safe and effective COVID-19 vaccines. As of end December 2021, 99% of RLC’s total workforce have been inoculated.
As we welcome back employees to our offices, their health and well-being will remain to be our utmost priority. RLC will continue to implement stringent safety and sanitation protocols across its properties, and adopt ways of working that will enable employees to feel at ease and perform at their best.
Furthermore, Robinsons Land made significant strides towards shaping an inclusive, people- driven culture that empowers all employees to succeed. We are proud to be recognized in the 2022 Bloomberg Gender Equality Index (GEI), marking the second time the Company has entered the global list. The distinction comes as a validation to our continued efforts to champion diversity, equity, and inclusion in the workplace, providing equal opportunities for women in corporate roles. Notably, women account for more than half of RLC’s total workforce and management base, with a significant number engaged in senior leadership roles across the organization.
As an integral part of our core strategy and identity, we also continued to integrate environmentally and socially responsible practices in our diverse business operations. The Company is proactively taking steps to accelerate the shift toward the use of greener sources of energy through rooftop solar panel installations in malls, and electricity supply generation from hydroelectric power plants in our office buildings. In addition, through our very own Robinsons Land Foundation Inc. (RLFI), RLC continues to pursue several social welfare programs for disaster response, community development, health & nutrition, and child welfare & education.
Robinsons Land has proven that it can withstand external shocks and grow even in the most challenging of circumstances. The resilience of our Company is due to the diversity of our portfolio, the strength of our culture, and the focus of our strategy on customer-centric innovation. We begin 2022 with a strong foundation and clear plan for growth that allow us to deliver value in an ever-changing environment.
Robinsons Malls will continue to ramp-up its portfolio bringing lifestyle centers closer to consumers with the opening of Robinsons Place Gapan in Nueva Ecija and the expansion of Robinsons Place Antipolo. Once completed, these projects will increase total gross leasable area by 3% to 1.62 million sqm.
With return-to-work strategies in full swing and expected to sustain demand, Robinsons Offices is preparing to deliver new inventory of office spaces in Bacolod, Cebu and Iloilo. These developments will further solidify our position as one of the major IT-BPM office space providers in the country.
As people look to reconnect, explore new destinations, or revisit reliable favorites, revenge travel is expected to spark recovery in the tourism and hospitality sectors. Through well- diversified brands spanning multiple market segments, Robinsons Hotels & Resorts will capitalize on the anticipated return of foreign tourists, as well as the foreseen improvement in domestic tourism within Metro Manila and in leisure destinations. We plan to operate over 3,600 keys with the opening of Summit Naga, Go Hotels Naga, Go Hotels Tuguegarao, and Fili Urban Resort Hotel in Cebu in 2022.
For our Residential Division comprised of RLC Residences and Robinsons Homes, we plan to launch future-ready projects to capture the growing demand from domestic end-buyers and foreign investors. This positive outlook is supported by attractive lending rates, the availability of mortgage bank financing, and solid OFW remittances.
Meanwhile, Robinsons Logistics and Industrial Facilities (RLX) will work towards becoming the fastest growing logistics facility provider in the country with additional warehouses in the pipeline. In parallel, we will continue to make substantial progress in the development of our landmark Destination Estates – the 30-hectare Bridgetowne in Pasig and Quezon City, the 18-hectare Sierra Valley in Cainta, and the 200-hectare Montclair in Pampanga. These master-planned integrated developments will espouse the “Live, Work, Play, Inspire” lifestyle to empower a life of convenience and productivity.
For 2022, RLC has earmarked approximately Php25.5 billion for capital expenditures to be funded through internally-generated cash from operations and borrowings. Our existing land bank in the Philippines has now reached over 800 hectares with a market valuation of about Php128.4 billion.
Overseas, the Company expects an earnings boost in 2022 upon the recognition of revenues from Phase 2 of its Chengdu Ban Bian Jien project in China.
With markets slowly regaining normalcy, RLC is well-positioned to take advantage of compelling opportunities that will drive immediate recovery and strategic expansions. Whilst uncertainty remains, we will continue to invest in long-term value creation for all our stakeholders.
As we move towards sustained recovery and inclusive growth, we would like to express our deepest gratitude to our Board for their ongoing support and guidance. We would also like to acknowledge our talented teams, who have gone above and beyond to keep serving our customers, partners, and communities amid the most uncertain of times. We are grateful that they share our passion for building people’s dreams.
Lastly, we are incredibly thankful to our shareholders, business partners, patrons and customers for their continued trust and support. We have never been prouder and more privileged to work alongside you.
Emerging from the pandemic stronger and wiser, we look forward to the years ahead with confidence and optimism. We will continue to push boundaries to create value that all of our stakeholders can be proud of.
Maraming salamat po.
LANCE Y. GOKONGWEI
Chairman
FREDERICK D. GO
President & CEO