RLC 1H2023 domestic net income surges by 71%, posts record operating margins

Robinsons Land Corporation (RLC), a leading diversified real estate company in the Philippines, delivered strong growth across all businesses and achieved record EBITDA and EBIT margins in the first half of 2023. Net income attributable to equity holders of parent grew 23% to Php5.78 billion, even with the high base effect of earnings from RLC’s Chengdu Ban Bian Jie project in China last year. Excluding China, profits from domestic operations accelerated by 71%.

Consolidated revenues registered at Php19.63 billion, while EBITDA and EBIT reached Php10.87 billion and Php8.25 billion, respectively. Higher revenues complemented by increased operational  efficiency pushed operating margins to record highs of 55% (EBITDA) and 42% (EBIT).

The Company’s investment portfolio contributed 71% of total revenues, 78% of overall EBITDA, and 72% of consolidated operating income, driven by the continued resurgence of the mall and hotel businesses. In the first six months of the year, Robinsons Malls’ revenues increased by  36% to Php7.76 billion on the back of improved occupancy rates and higher consumer spending.  Total mall leasable space currently stands at 1.6 million square meters with over 8,000 retailers.

Capitalizing on the significant recovery of travel and tourism, Robinsons Hotels and Resorts (RHR) grew revenues by 148% to Php2 billion in the first half of 2023, propelled by higher occupancy and room rates. EBITDA and EBIT likewise ballooned by 920% and 169% to Php443 million and Php132 million, respectively.

RHR is the largest hotel developer and operator in the Philippines with a multi-branded portfolio of 30 hospitality developments, including four (4) properties under franchise agreements. Earlier this year, RHR opened its fourth international hotel, The Westin Manila, in Ortigas Center, Pasig City, which brought total room keys to 4,975.

Robinsons Offices and Robinsons Logistics and Industrial Facilities (RLX), meanwhile, contributed stable topline growths of 4% and 9%, respectively.

RLC’s office portfolio consists of 31 office buildings with 741,000 sqm of gross leasable space, located in major central business districts, key cities, and urban areas. Sixteen (16) of its office assets have been infused into RLC’s flagship real estate investment trust, RL Commercial REIT, Inc. (RCR). RLX, on the other hand, owns 8 industrial facilities in Sucat, Muntinlupa, Sierra Valley in Cainta, San Fernando and Mexico in Pampanga, and Calamba, Laguna.

On the other hand, RLC Residences and Robinsons Homes, under the Company’s property development portfolio, generated Php5.39 billion in realized revenues for the first half of 2023. Excluding China, revenues grew 28% on the back of higher collections, faster construction progress, and strong equity earnings contribution from joint venture projects amounting to Php1.01 billion, 53% better than 2022.

Net sales take-up for the first half of 2023 accelerated by 107% year-on-year to Php12.43 billion, from Php6.01 billion in the same period last year. Meanwhile, residential sales from joint venture projects – Aurelia, Velaris, Sonora and Haraya – rose to Php8.79 billion, up 74%.

In the first half of 2023, RLC Residences launched three (3) new projects, namely, Le Pont Residences, Sierra Valley Gardens’ Building 4, and Mantawi Residences’ Tower 1 in Mandaue City. Le Pont Residences brings together carefully crafted living spaces and three levels of  hypersized amenities in a world-class address within the Bridgetowne Destination Estate. This  premium development allows residents to embrace the elevated lifestyle. Meanwhile, Sierra  Valley Gardens is a sprawling multi-tower residential condominium tucked within Sierra Valley,  an extensive master-planned destination estate along Ortigas Avenue extension in Cainta, Rizal. Finally, Mantawi Residences in Cebu offers luxurious condominium units with modern amenities and features. It is strategically located in Ouano Avenue in Mandaue City, providing residents with convenient access to lifestyle establishments and major thoroughfares.

RLC recorded property development revenues of Php446 million for the first six months of the year from the sale of parcels of land to joint venture entities. EBITDA and EBIT closed at Php251 million and Php249 million, respectively.

“The success of our strategic initiatives, supported by improving market conditions, fueled the Company’s strong first-half results. We look forward to the sustained expansion of our businesses and pursuing investments that will allow us to further create value for our stakeholders,” said RLC President and CEO Frederick D. Go.

In the first six months of 2023, RLC spent Php9.25 billion in capital expenditures primarily for the development of malls, offices, hotels, warehouse facilities, and residential projects for local  operations.

To date, RLC has over 800 hectares of land bank nationwide. The Company continues to be on the lookout for properties to acquire for the expansion of its various businesses. It remains open to joint venture projects with property owners and developers.

RLC Lists Php15-billion Second Tranche Bonds 

RLC listed its Php15-billion fixed rate bonds with the Philippine Dealing & Exchange Corp last  June 30, 2023. This constitutes the second and final tranche of the Company’s shelf-registered  debt securities program in the aggregate principal amount of up to Php30 billion, which was  rendered effective on August 12, 2022.

The overwhelming support of the investor community prompted the Company to fully exercise its oversubscription allotment of Php5 billion, marking the first fully filled oversubscription by a Philippine company this year. This enabled RLC to price at the tightest of spreads, locking in rates of 6.0972% per annum for the three-year tenor, and 6.1663% per annum for the five-year tenor. The issuance also received the highest credit rating of PRS Aaa, with a Stable Outlook, from the Philippine Rating Services Corporation (PhilRatings), indicating the Company’s stability, healthy balance sheet and strong capacity to meet its financial commitments. Net proceeds will be used to fully repay maturing debt obligations, partially fund the capital expenditure for project development, and support overall business operations.

ADVT.