Filinvest profit down 13.5%

The Gotianun family’s Filinvest Development Corp. said profits last year fell as expenses related to its expansion plans increased, a filing in the Philippine Stock Exchange yesterday showed.

Filinvest, which is involved in property development, banking and sugar production, said net income in 2014 fell 13.5 percent to P3.7 billion from year-ago level. In terms of consolidated net income, the decline was at 5 percent to P6.2 billion, it added.

The company noted that revenues were up by 11 percent to P38.6 billion.

Filinvest president and CEO Josephine Gotianun-Yap said the company was currently at the “tail-end of a major investment cycle.”

She cited a 400-branch expansion program for banking unit East West Bank and the start of commercial operations of a 405-megawatt power plant by 2016.

For property unit Filinvest Land Inc., Yap said the company’s gross leasable area would grow by 50 percent by the end of this year due to the expansion of its retail and business process outsourcing portfolio.

“We are excited about our prospects in 2015 and onwards,” Yap said in a statement.

Filinvest noted that revenues last year were driven by Filinvest Land and East West Bank, which accounted for 48 percent and 42 percent, respectively. Sugar accounted for 6 percent while its hotels business accounted for 3 percent, the filing showed.

The company, which was started by taipan Andrew Gotianun Sr. as a lender to buyers of second-hand cars in 1955, continues to diversify its interests. The family is betting that power generation will be a new earnings driver in the coming years.

“This year, power subsidiary FDC Utilities Inc. will start contributing to revenues from the sale of power from our 140-MW IPPA contracts with Unified Leyte and Apo Geothermal,” said Yap, adding that the construction of the unit’s 3 x 135-MW circulating fluidized bed power plant in Misamis Oriental is in “full swing and test runs will commence this year.”

“We expect to bear the initial fruits of our investment in 2016,” Yap said.

On hotels, Filinvest Development is eyeing further expansion with the ongoing development of a project in Boracay under the Crimson brand.