Construction lag pulls down FLI profit by 25%

Gotianun group-led Filinvest Land Inc. (FLI) saw a 25-percent year-on-year drop in first quarter net profit to P1.35 billion, citing the enhanced community quarantine (ECQ) that disrupted operations and delayed construction activities starting mid-March.

Gross revenues fell by 29 percent year-on-year to P5.15 billion, FLI disclosed to the Philippine Stock Exchange on Thursday.

Real estate sales revenues went down by 39 percent year-on-year as a result of lower sales take-up in 2019 and delays in the completion of the projects amid the lockdown, which was imposed to stem the spread of the new coronavirus disease (COVID-19).

FLI granted a grace period to homebuyers, affecting the recognition of revenues from real estate sales.

Rental revenues, on the other hand, inched up by 4 percent year-on-year to P1.79 billion in the first quarter as the growth in office leasing made up for the decline in shopping mall revenues.

FLI reported that its office buildings continued to enjoy high occupancy rates and remained operational during the period.

However, most of the mall’s tenants were closed beginning mid-March, with the exception of essential services such as supermarkets, drugstores and banks. FLI waived the rent for these closed establishments.

“The country is in a difficult and trying situation. Our focus right now is to serve our customers through financial relief for our affordable and middle income clients during ECQ as well as new safety protocols and conveniences for our homeowners. Paramount as well is to ensure the health and financial peace of mind of our employees both direct and indirect. The Filinvest group [as well as its foundations] is an active partner of the government in the fight against COVID-19 and have pledged over a P100 million for this purpose. As we deal with the effects of the pandemic, we are also reviewing and reassessing our plans,” FLI chief executive and president Josephine Gotianun-Yap.

She said projects under construction would be prioritized for now. “We will be launching residential projects and selectively expand in new territories within the country. We have moved a large part of our planned launches to 2021 though we can easily accelerate their launches if there is an improvement in market demand,” she said.

Prior to the ECQ period, FLI was able to launch three projects worth P2.1 billion in the first quarter.

The plan for the entire year was to launch a total of P13.4 billion worth of residential projects.