Taguig—(PHStocks)—Filinvest Development Corp. (PSE: FDC), the parent firm of the Filinvest group of companies, reported year-to-date net income of PhP5.9 billion in the third quarter of 2016, reflecting year-on-year growth of 21%. A large part of growth was delivered by banking subsidiary East West Banking Corp. (EastWest Bank, PSE: EW), which registered a hefty year-on-year 78% increase in net profits which reached PhP2.3 billion from January to September 2016. Net income from property subsidiary Filinvest Land Inc. (PSE: FLI) grew 7% to PhP3.5 billion from the same period last year.
Growth was achieved on the back of a 15% increase in revenues to PhP42 billion from PhP36.5 billion. Majority was contributed by its established businesses in banking (42%) and real estate (38%). The power, sugar and hotel subsidiaries contributed the balance, at 11%, 6% and 3% respectively.
Power subsidiary FDC Utilities Inc. (FDCUI) marked a major milestone last September as President Rodrigo Duterte inaugurated its 3 x 135MW clean coal power plant in Villanueva, Misamis Oriental.
“We are proud to say that all three units are now connected to the grid. Two units have been declared commercially operational and we expect the third to be declared before year end,” indicated Josephine Gotianun-Yap, President and CEO of FDC. “FDC’s income mix in 2017 will be significantly altered with the addition of this plant. With total capacity of 405MW, it is now the biggest power plant in Mindanao and will put an end to the power crisis in the region.”
EastWest’s loan portfolio grew 32%, driven by strong consumer loan growth (50%) and supported by a 30% rise in deposits, mainly from low-cost deposits. Consequently, the bank’s net interest income grew 24% year-on-year while non-interest income grew 58%.
“As the results bear out, we are harvesting the initial fruits of our investment in the branch-store expansion,” said FDC Chairman Jonathan T. Gotianun. EastWest has 443 stores to date, almost triple its consolidated nationwide network five years ago.
“Not only are we strengthening our core businesses, but also we are diversifying our sources of income with our new joint venture and subsidiaries,” Gotianun added. EastWest Leasing and Finance, the bank’s newest subsidiary, just received regulatory approvals while “Troo,” EastWest’s joint venture with Belgium-based Ageas Insurance began its bancassurance operations last April. EastWest also formed an insurance brokerage, EastWest Insurance Brokerage Inc., which has been operating for almost a year. In addition, last May, EastWest finalized the acquisition of the retail banking business of Standard Chartered Philippines, which includes credit cards, personal loans, wealth management and retail deposits. Migration of the accounts is ongoing and the transfer is expected to be completed before the year ends.
Real Estate subsidiary Filinvest Land recorded revenues of PhP13.6 billion at the end of the third quarter of the year, 6% higher than the previous year. Rental revenues rose 14% to PhP2.3 billion as the firm booked increased revenues from its office buildings. Part of the increase came from the three new buildings completed in the last quarter of 2015. In addition, the company has just completed two new buildings, “Filinvest Cyberzone Bay City 1 & 2” with 37,000 square meters of gross leasable area (GLA). The two new buildings have been fully leased out and rental revenue will be recognized in 2017. FLI now operates 21 buildings with GLA of 312,000 and will end 2016 with 348,000 square meters, roughly 70% more than 2014 levels.
FLI is also growing its retail rental space portfolio. The Festival Mall in Alabang, with gross floor area (GFA) of 200,000 square meters, is undergoing a major expansion project to add almost 100,000 square metrers of GFA; of this, the first phase is also already open. Apart from this, retail developments are underway all over the country, including “Fora Mall” in Tagaytay, “Center Square Community Mall” in Molino, Cavite and “Il Corso Mall,” the seaside lifestyle mall located in South Road Properties in Cebu. By year-end, FLI is expected to double its end-2015 level GFA with more than 433,000 square meters.
FLI continues to launch real estate projects that address the needs of its nationwide core market. It is set to invest an additional Php5 billion in the next three years in Mindanao as it expands its Futura Homes economic housing and Spatial medium-rise building affordable condominium portolios with new projects in South Cotabato and Davao City. This year, FLI has also launched residential projects in Cavite, Rizal, Bulacan and other key locations.
The Filinvest Group has one of the biggest commercial land banks in three major centers – Alabang, Cebu and Clark. The Filinvest Group won and was awarded the 200-hectare Clark Mimosa project and the 288-hectare Clark Green City project by CDC and BCDA respectively.