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Cebu Landmasters reports H1 net profit of P1.1 billion

August 16, 2019

PUBLICLY listed company Cebu Landmasters Inc. (CLI) reported on Thursday its consolidated net profit reached P1.109 billion in the first half of 2019, up 34 percent from P826 million during the same period last year.

Combined revenues, likewise, grew by 34 percent from P2.613 billion to P3.495 billion year-on-year (YoY) due to construction progress from ongoing projects.

“I do want to note that a lot of the percentage completion revenues go from higher-end projects,” CLI Chief Finance Officer (CFO) Beauregard Grant L. Cheng said during their First Half 2019 Investors’ and Analysts’ Briefing held at the Shangri-La Hotel in Bonifacio Global City, Taguig.

The biggest surge in the topline was posted by high-value projects, primarily the 38 Park Avenue residential development within the Cebu IT Park in Cebu City. Standing at 38 floors, this New York-inspired project has an inventory of 756 dwelling units.

Parent net income from January to June of 2019 amounted to P855 million, representing a 13-percent increase from P759 million in the same period last year. This translates to earnings per share of P0.51 for the period.

The firm continues to have a strong presence in Cebu, where all its projects account for 61 percent of the total revenues. This is followed by developments in Bacolod and Dumaguete that contribute 16 percent and 9 percent, respectively.

“I’d like to believe that we are one of the best at not just packaging, but also the delivery with our on-time construction and quality of construction,” said Jose Franco B. Soberano, executive vice president and chief operating officer of CLI.

Consolidated reservation sales of the leading developer in the Visayas and Mindanao expanded from P5.187 billion to P5.263 billion YoY. The bulk of this came from Davao-based projects.  Among them is the newly launched One Paragon Place, 78-percent sold-out at present. This is a prime residential tower integrated within The Paragon Davao, a master-planned lifestyle destination.

“We’re not in a hurry. We still have three years to build. But it means that there’s so much liquidity [in this city province],” he said.

Developments in Cebu, Cagayan de Oro and Bacolod also reported high booking sales in the first six months of the year, as well as projects in expansion areas.

According to the real-estate company, more projects are set for launch in new cities, including the rollout of its fastest-selling brand Casa Mira in Iloilo, Dumaguete, Bacolod and Bohol in the second half of the year. They are expected to enable CLI to achieve its P12.5-billion combined reservations sales target by end of this year.

Leasing is another growth segment as the company registered a 16-percent hike in revenues from P23.87 million to P27.7 million during the two periods in review. This was because of the increase in gross leasable area (GLA) after the recent turnover of retail areas in Casa Mira Towers Labangon and Base Line Center developments in Cebu.

Overall, the firm’s GLA as of the first half of this year is at 11,815.15 square meters. With 69,234 sq m of GLA under construction, it is on track to complete its planned total GLA of 200,000 sq m by 2023.

CLI plans to widen its hotel business to more than 1,100 rooms by 2023 via a strategic partnership with serviced residence owner-operator The Ascott Limited. Citadines Cebu City, their first property together, will open next month.

The Cebu-based developer also tied up with Radisson Hotel Group for the pioneering Radisson Red in the country. This will be located at the Astra Centre in Mandaue City.

“Cebu Landmasters has rapidly expanded in its current areas. It is also preparing to launch projects in new VisMin cities in the second half of 2019. Our first township, DGT in Davao, is already under way and we have recently disclosed our partnership with Xavier University-Ateneo de Cagayan for a 63.5-hectare University township,” said Cebu Landmasters President and Chief Executive Officer Jose Soberano III.

“We foresee that the volume and diversity of developments, backed by our growing pipeline, will empower us to consistently hit our targets.”

The company’s balance sheet continues to be robust, with assets amounting to P29.309 billion as of end-June 2019, or 15 percent higher than P25.427 billion last year, primarily due to the higher volume in receivables as more units are completed and prepared for take-out.

The top executive said this will allow the company to generate cash for reinvestment for future developments.  In support of its expansion plans, the firm continues its land bank initiative, which to date has a total of 1,131,771 sq m of land in 10 key VisMin cities.

Part of its latest acquisitions is an existing resort in Mactan, Cebu, with 18,000 sq m of land area. It will be redeveloped and integrated with a residential component. It also bought a 9.4-hectare property in Ormoc to be developed into a residential project in 2020. The property developer’s strong sales posted from the last quarter of 2018 and first three months of 2019 will qualify more units for revenue recognition. As of June 30 this year, the firm continued to enjoy net growth in unrecognized revenues by 9.3 percent to P12.9 billion versus December 2018 because of strong reservation sales.

Looking forward, CLI is bullish to attain its year-end goals of P2.6 billion in consolidated net income and P2 billion in parent net income, as well as P8.4 billion in combined revenues.

“Based on our internal tracking and the results that we’re seeing in the first half, we are reiterating our guidance in the market,” Cheng stressed. – By Roderick Abad

Published in Business Mirror