COVID-19 Continues to Impact Filinvest Land’s 1H 2020 Results
The disruptions brought about by the COVID-19 pandemic weighed on Filinvest Land Inc. (PSE: FLI), the publicly-listed property arm of Gotianun-led Filinvest Development Corp. (PSE: FDC). In the first half of 2020, FLI reported a 30 percent decline in gross revenues to PhP8.81 billion from PhP12.62 billion in the same period last year, and a 24 percent drop in net income attributable to equity holders of the parent to PhP2.42 billion from PhP3.04 billion in the first half of 2019. The results reflect the full impact of the Community Quarantines from mid-March to June, which hampered operations and delayed construction activities.
Rental revenues slightly increased by 1% to PhP3.42 billion in the first half of 2020, with the growth in office leasing offsetting the decline in retail mall revenues. FLI’s office buildings continued to enjoy high occupancy rates and remained operational during the ECQ period. However, most parts of FLI’s malls were closed for the duration of the ECQ, with the exception of essential services such as supermarkets, drugstores and banks. Following government’s mandate and as support to its tenants, FLI waived rent for establishments which were not operational during the ECQ period. As Metro Manila and other cities transitioned to General Community Quarantine (GCQ) from June to August 3, FLI malls were 60 percent operational with more establishments allowed to open.
Real estate sales revenues went down by 46 percent to PhP4.56 billion resulting from lower sales take-up coupled with revenue recognition delay brought about by the construction restrictions during the quarantine period. FLI also granted a grace period in homebuyers’ payments as support to its customers while under ECQ which affected real estate sales recognition. There were no residential projects launched in the second quarter, but the company plans to launch PhP11.3 billion worth of residential projects for the rest of the year.
“The second quarter was a most difficult time for the company with ECQ limiting the operations of our malls and construction restrictions affecting residential revenue recognition. Despite the challenges, we prioritized easing the burden of our customers by providing payment grace periods or rental relief. Our past efforts in process improvement and digitalization allowed us to operate efficiently and effectively during this period as we continued to serve our customers,” said FLI President and CEO Josephine Gotianun-Yap. “We saw a very healthy rebound of sales during the GCQ period. We look forward to a gradual recovery as we expect buyer amortization payments to normalize and construction capacities to increase which will improve our residential revenue recognition in the next quarters. Operations have adjusted to the COVID-19 pandemic from our digital marketing and online selling processes to the continued communication with our buyers and homeowners through the online service desk.”
For the second half of the year, the company is taking a two-pronged strategy of expanding the investment property portfolio and prudent residential development focusing on the end-user, affordable and middle-income markets. The company is focusing on the completion of its key projects, particularly office buildings which continue to be in demand, Phase 1 of the Filinvest Innovation Park in New Clark City, the Lodgeplus dormitels in Clark Mimosa Plus and selected residential developments across the country.
To support the company’s capital expenditures program and manage its cash flows, the company has announced its plans and intention to file with the SEC a shelf registration of a fixed-rate peso-denominated retail bonds issuance.
