Property developer Cebu Landmasters Inc. (CLI) expects to return to its 15- to 20-percent historical earnings growth track this year after the extraordinary challenges brought about by the new coronavirus disease (COVID-19) pandemic pared its earnings in 2020.
CLI’s attributable net income slipped by 8 percent to P1.85 billion last year while consolidated revenue hit P8.3 billion, not too far from the P8.5 billion topline in the previous year when the pandemic had yet to hit local shores.The company was able to match the kind of revenue posted in 2019 due to “the immediate deployment of catch-up measures shortly after the relaxation of lockdowns triggered by the pandemic in the first half of 2020,” CLI chair and chief executive officer Jose Soberano III said.
Real estate sales slip
In the fourth quarter alone, CLI’s revenue grew by 18 percent to P2.59 billion from the third quarter.
For the full year, revenue from the sale of real estate slipped by 3 percent to P8.15 billion. The rest of its revenues came from its rental portfolio, one operating hotel and management fees.
Given its focus on the Visayas and Mindanao (Vis-Min) region where COVID-19 contagion is more manageable compared to Greater Metro Manila, CLI is optimistic on returning to its normal growth path this year.
In a briefing on Wednesday, CLI chief operating officer Jose Franco Soberano said the company would have P176 million in additional net income this year due to the newly enacted Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) law.
CREATE lowers the corporate income tax rate to 25 percent from 30 percent retroactive to July 1, 2020.
CLI is also set to jack up its capital spending this year to P12 billion from P7.4 billion in 2020. To fuel its growth in the years ahead, the company is set to bring to the market 15 residential projects with 7,507 units valued at P19 billion.
ExpansionIt also expects to double its gross leasable area to 28,000 square meters this year from last year’s 14.5 square meters.
With a 12-percent market share, CLI is the leader in Vis-Min’s residential market.
As an indicator of future revenue growth, CLI beat its 2019 reservations sales performance in 2020 with record P14.25 billion in new sales versus P12.67 billion in 2019.
“There is a real estate boom and a global trend towards safer and healthier homes. With CLI’s agility, we’re able to take advantage of this new kind of demand,” said Jose Soberano.
“The situation in 2020 has only paused our growth trajectory… We were always looking at still growing at our historical trajectory of 15-20 percent compounded annually,” said CLI chief financial officer Grant Cheng.