Gokongwei-led Robinsons Land Corp. booked P3.7 billion in first semester net profit, down 8 percent year-on-year, as the coronavirus (COVID19) pandemic and the consequent lockdown protocols took a heavy toll on mall operations in the second quarter.
Coming from a net profit of P3.16 billion in the first quarter, the latest report implied a second quarter net profit of P540 million, marking a decline of around 75 percent from the previous year’s reported level.
“Even with the full impact of the quarantine in the second quarter, all our business units managed to be EBITDA (earnings before interest, taxes, depreciation and amortization – a measure of cash flow)-positive. Moving forward, the improving trend gives us optimism that the economy is on its way to recovery. We continue to seek opportunities and innovative new ways of doing business to deliver long-term sustainable value to all our stakeholders,” said RLC president and chief executive officer Frederick Go.
For the first six months, RLC’s consolidated revenues marginally increased by 3 percent year-on-year to P15.4 billion while overall cash flow as measured by EBITDA inched up by 1 percent year-on-year to P8.2 billion.
The full impact of the pandemic was felt during the second quarter of the year, which substantially affected RLC’s business units.
The investment portfolio – which generates recurring revenues and accounting for 49 percent of consolidated revenue – saw a 25 percent year-on-year decline in revenues to P7.5 billion.
On the other hand, the development portfolio managed to boost revenues by 59 percent year-on-year to P7.9 billion in the first half, due to a new residential accounting treatment. Effective January 2020, RLC recognized revenues from residential development based on a buyer’s equity threshold of 10 percent, from the previous 15 percent. This was to be more reflective of the company’s operating performance and align accounting practices with domestic industry practice.
Without the adjustment, residential revenues would have gone down by 51 percent in the first semester. Instead, the residential division recorded P7.9 billion revenues in the first half, 66 percent higher year-on-year.
Overseas, RLC reported that its Chengdu Ban Bien Jie project in China was doing “remarkably well.” During the first six months, RLC was able to acquire the sales permits for the second batch of condominium units and duplexes, and all such residential units had been sold out.
On its investment portfolio, RLC’s shopping mall division saw a 42 percent year-on-year drop in revenues to P3.8 billion, mainly due to the waiver of rentals for non-operational tenants and rental discounts provided during the start of the quarantine period in March.
During this period, the unit strengthened its on-line and e-commerce platforms in support of its tenants’ operations. RPersonal Shopper and RDelivery online apps were created to bring Robinsons malls closer to customers’ doorsteps.
On the other hand, the office buildings division turned out to be one of the most reliable businesses during the pandemic. Revenues increased by 23 percent year-on-year to P2.9 billion in the first half mainly because of robust leasing activities at Cyber Sigma in BGC, Zeta Tower and Exxa Tower in the Bridgetowne Estate, Cyberscape Gamma in Ortigas and work.able centers in Gamma, Exxa and Zeta.
The hotel unit, however, was among the most battered by the quarantine regulations and protocols. This unit posted a 39 percent year-on-year decline in revenues to P660.4 million due to the restrictions on guest accommodations from the start of the community quarantine and the disruption brought about by the Taal Volcano eruption in January.
Amid the pandemic, strong demand for hotel rooms came from overseas Filipino worker and returning resident quarantine requirements as well as long-staying accommodations for business process outsourcing employees. The unit has also turned some of its hotel rooms into private working spaces and offered long-stay services to address changing consumer demand amid the pandemic.
RLC’s warehouse business posted a 97 percent growth in revenues to P112.1 million, driven primarily by its two warehouse facilities in Sucat, Muntinlupa and in Calamba, Laguna.