Gotianun-led conglomerate Filinvest Development Corp. (FDC) grew net profit last year by 31 percent to P13.4 billion, driven largely by higher earnings from its property businesses.
In a disclosure to the Philippine Stock Exchange, FDC said the bulk of its revenue was from the property business, accounting for 43 percent, while banking and power generation contributed 41 percent and 13 percent, respectively. The remaining 3 percent came from the sugar business.
“Our investments, not only in power but also in property and bank infrastructure, are now being reflected in our healthy year-end net income,” FDC chair Jonathan Gotianun said.
Property income reached P8.8 billion, driven by the recurring income portfolio. The group’s rental revenue from the office and retail portfolio of Filinvest Land Inc. grew by 27 percent as it booked new leases for 124,000 square meters of gross leasable area (GLA) completed in 2017.
FLI runs 31 office and retail developments with a total GLA of 712,000 sqm. It has 21 recurring income developments, with half a million square meters of GLA now under construction.
FDC’s hospitality assets also registered a 23-percent increase in revenue owing to improved occupancy rates across all hotel properties alongside increased revenue from Mimosa Golf Clark. Together with Filinvest Alabang’s (FAI) commercial land leases, the group’s recurring income accounted for 38 percent of net income from the property segment in 2018.
Banking subsidiary EastWest Bank delivered a net income of P4.5 billion, down by 10.8 percent from the previous year, due to smaller lending margins, slower Treasury gains and the disruption of a crucial lending program for teachers. Despite a decline in net profit last year, however, EastWest maintained a return on equity of 11 percent, the highest among its peers, for the last three years.
FDC also reported ramped-up energy sales by its power group, which operates a 405-megawatt clean coal power plant. Energy sales from the FDC Misamis power plant grew by 24 percent in 2018. The power segment registered a P2.1-billion net income contribution, or 16 percent of the group’s net income.
“The Filinvest group’s entry into airports, hospitality and logistic parks marks the start of a new phase for FDC, as we kick off our involvement in tourism and infrastructure,” FDC president and chief executive officer Josephine Gotianun-Yap said. “This adds another layer of diversity to our income mix while also complementing investments in the region.”
FDC, together with FLI, invested in the 201-hectare Filinvest Mimosa+ Leisure City (the former Clark Mimosa Estate). Under Filinvest Hospitality Corp. (FHC) subsidiary Mimosa Cityscapes Inc., the group has a provisional license granted by Philippine Gaming and Amusement Corp. for a casino integrated resort in Filinvest Mimosa. More than $200 million has been allotted to the project, which includes a casino, lifestyle mall, five-star hotel and events venue.