D.M. Wenceslao & Associates Inc. (PSE: DMW) has reported net income attributable to equity holders of PhP1.9 billion in 2018, 23% higher from 2017. Net income margin reached 89% from 56% in the prior year, reflecting continued momentum in each of the businesses, led by the office and residential segments.
Revenues amounted to PhP2.15 billion, of which PhP1.9 billion or 88% are recurring income from rentals. Leasing of land grew 5% to PhP965.2 million and while rentals of buildings and other revenues related to leasing increased 77% and 90% to PhP762.1 million and PhP173.8 million, respectively. Residential unit sales increased by 153% to PhP119.4 million. Meanwhile, other income in connection with the settlement of the company’s joint venture agreements was PhP1.2 billion.
“We have a clear set of strong results and compelling opportunities ahead. Profitability has consistently improved over the years, with net income increasing 26% annually since 2016. Our holistic approach to Aseana City master plan brings together our construction and real estate development capabilities from project planning to property management. This full scope of services provides us with a diversified earnings base and substantial recurring revenue streams. More importantly, it positions us well to complete approximately 380,000 square meters (sq.m.) of leasable and saleable properties by 2022 and grow Aseana City into a next generation central business district within Metro Manila,” said Delfin Angelo “Buds” C. Wenceslao, chief executive officer.
Throughout 2018, DMW has made progress in spearheading the development of Aseana City through implementing its pipeline projects. Earlier in the year, the Company has delivered its third office building, Aseana Three, which added 30,000 sq.m. to the company’s total leasable gross floor area. Construction of 8912 Asean Ave. (formerly Aseana Four) has also started in light of sustained office demand and is on track for 2020 completion. During the fourth quarter, the company has unveiled its second residential project. MidPark Towers is a four-tower condominium development with 42,000 sq.m. saleable floor area positioned as luxury property.
“The rising economic activity and employment opportunities in the Manila Bay area make the residential segment highly promising. We have expanded our footprint in this fast- growing market which we expect to rise further in 2019. MidPark Towers has achieved significant sales in the few weeks it has been available, where one tower was sold in one month since the project was launched in November. As of February 15, it has sold an aggregate of PhP2.8 billion worth of units—an excellent performance considering we are less than two months into the year.”
On February 15, the company announced board approval of P120 million special cash dividend. “Following this special dividend, we continue to be at a level where our strong operating results and growth outlook enable us to look ahead from a position of stability and strength,” said Wenceslao. “We remain focused on delivering the plan we set out at the time of our initial public offering while being mindful to make any necessary adjustments as market conditions evolve.”
In line with the new accounting standards PFRS 9 and 15, DMW has restated its consolidated statements of profit and financial position. To facilitate year-on-year comparisons, DMW has disclosed restated financial information for full year 2016 and 2017. The new standard impacts the presentation of recognition of residential revenue and costs, while having no impact on cash flow.
At December 31, 2018, the company’s total leasable gross floor area aggregated to 89,914 sq.m., leased land area was 155,418 sq.m. and land reserves in Aseana City totaled 313,415 sqm.