FDC Earnings Surge 28% to PhP4.4B in 1H 2016

Taguig—(PHStocks)—Filinvest Development Corp. (PSE: FDC) reported net income of PhP4.4 billion at the end of June 2016, a rise of 28% over the same period of the previous year. This was driven largely by robust results in its banking subsidiary, EastWest Bank (EWB) which posted first semester net income of PhP1.6B, 55% higher than the PhP1 billion achieved in the same period last year. Income from property subsidiaries Filinvest Land, Inc. (FLI), Filinvest Alabang Inc. and FDC Hotels, grew by 17% compared to same period last year.

Total revenues grew 17% to PhP29 billion from PhP24.8 billion. The lion’s share was delivered by its established businesses in banking (40%) and real estate (38%). The remainder was divided among the power (11%), sugar (9%), and hotel (2%) businesses.
Its power subsidiary, FDC Utilities Inc. (FDCUI) has synchronized the first two units of its 3 x 135MW clean coal power plant in Misamis Oriental.

“All three units are expected to be connected to the grid by end of third quarter 2016 and in commercial operations by year end,” Josephine Gotianun-Yap, FDC president and CEO expressed enthusiasm about the firm’s newest business. “We expect significant growth as well as a change in FDC’s income mix in 2017. FDCUI’s 405 MW plant is now the biggest power plant in Mindanao and will put an end to the energy crisis in the region.”

EWB Loans grew 36% year-on-year, driven by strong consumer loan growth (50%). Deposits increased 30%, supported by 24% growth in low-cost deposits (checking and savings accounts). As a result, the bank maintained its industry-leading net interest margin of 7.8% at the end of June. “We are starting to see the early fruits of our investments growing the branch-store network,” explained FDC Chairman Jonathan T. Gotianun.

Last May, EastWest Bank (PSE: EW) finalized the acquisition of the retail banking business of Standard Chartered Philippines, which includes credit cards, personal loans, wealth management and retail deposits. Earnings from the acquisition will be come in 2017 after the operational transition is completed. Addressing the needs of EastWest’s growing consumer base, the bank’s joint venture with Belgium-based Ageas Insurance, Troo, began its bancassurance operations at select EastWest stores early this year.

Listed real estate subsidiary FLI also recorded healthy results with net income of PhP2.5 billion, up 7% from PhP2.3 billion in the same period last year. Real estate subsidiary FLI, one of the country’s largest integrated real estate developers and BPO office providers, generated consolidated revenues of PhP9.2 billion. Growth was driven mainly by rental revenues, which rose 13% to PhP1.5 billion, as the firm booked higher revenues from its office buildings. FLI remains on track to attain its goal of one million square meters in GLA by 2019.

FLI currently operates 19 buildings with total gross leasable area (GLA) of 275,000 square meters, predominantly in Northgate Cyberzone in Filinvest City, Alabang. It is expected that by the end of 2016, FLI’s office portfolio will have GLA of 348,000 square meters or close to 70% more than 2014 levels. Likewise, FLI’s retail portfolio is expected to double its current level by year-end, with more than 433,000 square meters of gross floor area or 275,000 square meters of GLA. FLI has ample room to grow as the Filinvest group has one of the biggest land banks in three major centers – Alabang, Cebu and Clark.

Banking subsidiary EastWest attributes its continued growth momentum to its expanded branch-store network, now 440 nationwide to date—the 5th largest in the industry, excluding subsidiaries, and 7th overall, including subsidiaries.

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