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RLC’s Growth Momentum Sustained, EBIT up by 12% in 2016

Robinsons Land Corporation (RLC), a leading real estate property developer, sustained its growth momentum in fiscal year (FY) 2016 with a 12% uptick in EBIT to PhP8.5Bn from PhP7.5Bn in FY2015 on the back of a strong top-line performance of 14% to PhP22.5Bn. EBITDA surged to PhP12.0Bn, a 13% increase versus last year. The com-pany’s investment portfolio consisting of the malls, offices and hotels business accounted for 83% of total company EBITDA; while the balance of 17% came from development portfolio composed of four residential brands. Net In-come likewise expanded by 8% to PhP6.2Bn from PhP5.7Bn compared to the same period last year.

As a beneficiary of a consumption-fueled economy, the Commercial Centers Division continued to account for a majority of the total company revenues at 45% to PhP10.0Bn, which grew by 9% in FY16 from PhP9.1Bn in FY15 owing to a rosy system-wide occupancy rate of 94%, revenues from new malls and same mall rental revenue growth of 7%. EBITDA ended at PhP6.7Bn, 9% higher than last year’s PhP6.1Bn; while EBIT at PhP3.9Bn was 5% more than FY15’s PhP3.7Bn.

The Philippine retail landscape, buoyed by optimistic consumer sentiment in 2016, had allowed RLC to successfully commence commercial operations of four new lifestyle centers and one mall expansion planned for the year name-ly: Robinsons Galleria Cebu, RLC’s third and largest mall in Cebu, Robinsons Place Tagum in Davao, Robinsons General Trias in Cavite, Robinsons Place Jaro in Iloilo and Robinsons Place Ilocos expansion. As a result, RLC boasted 1.3Mn sqm of GLA from its 44 malls nationwide by the end of FY16. In the same year, RLC undertook the redevelopment of Robinsons Galleria, its flagship mall in Metro Manila situated in Ortigas Center, to uplift the over-all mall aesthetics and create more upscale dining options and venues for entertainment in response to a dynamic and competitive retail market. In December 2016, the company also expanded Robinsons Place Tacloban which resulted in an additional 15,000 sqm of retail space. RLC aims to further strengthen its mall footprint in the country by developing malls in Naga, Iligan, Ormoc and Abucay and by expanding Robinsons Place Antique and Robinsons Place Butuan in calendar year (CY) 2017, which will translate to an 11% increase in GLA. By CY2018, RLC targets to breach the 1.5Mn sqm-mark by completing four new provincial malls which will boost GLA by 10%.

The Office Buildings Division exhibited the fastest revenue trajectory of 30% to PhP2.9Bn in FY2016 from PhP2.2Bn in FY2015 due to higher rents from existing offices and revenues from Cyberscape Alpha, Cyberscape Beta and Tera Tower. Its contribution to the total company revenues likewise increased to 13% from last year’s 11%. EBITDA escalated by 25% to PhP2.6Bn from PhP2.1Bn in the previous year; while EBIT at PhP2.0Bn rose by 28% from PhP 1.6Bn in FY15.

Driven by robust demand for office spaces from the Information Technology and Business Process Management (IT-BPM) sector, RLC fortified its presence in six strategic locations across the country with thirteen office develop-ments. In 2016, it completed two new offices within its mixed-use properties in Ilocos Norte and Cebu which grew total net leasable area (NLA) to 325,000sqm by end of FY2016 while achieving virtually 100% occupancy for its existing offices located in various central business districts and urban areas. In the next two years, RLC plans to solidify its status as one of the major IT-BPM office space providers by completing Cyber Sigma in Taguig and two offices in Naga and Davao in CY2017; and by finishing Exxa Tower in Quezon City and Cyberscape Gamma in Orti-gas Center in CY2018. These five office developments will have a combined NLA of 146,500 sqm, of which a third have already been pre-leased to-date.

Revenues from RLC’s multi-branded Hotels and Resorts Division advanced by 4% at PhP1.8Bn in FY16 from PhP1.7Bn in FY15 from its 15 hotel properties. It contributed 8% to the total company revenues. Portfolio-wide oc-cupancy rate remained healthy at 68%. EBITDA increased by 7% to PhP660.1Mn in FY2016 from PhP618.9Mn last year; while EBIT at PhP490.7Mn was up by 8% from PhP453.3Mn in FY15.

A flourishing hospitality sector enabled RLC to add 4% more keys to its hotel room portfolio by opening the 10th branch of its essential service hotel chain, Go Hotels, in Lanang, Davao City in partnership with Udenna Develop-ment Corporation. This brought the total room count to 2,263 by the end of FY16. In addition, RLC’s franchisee, Roxaco-Vanguard Hotels Corporation, officially opened the Go Hotels Manila Aiport Road near the Ninoy Aquino International Airport. Anchored on the development of Philippine tourism, RLC intends to build more hotel proper-ties in Visayas and Mindanao by opening Summit Maxilom in Cebu, Summit Tacloban and Go Hotels – Iligan in CY2017 which will propel the number of rooms by 20%. By CY2018, RLC’s hotel room count would stand at 3,350, 19% higher than CY17, with the completion of Summit Naga, Amisa, Go Hotels – Naga and Go Hotels – Tuguega-rao.

The Residential Division generated 34% of total company revenues at PhP7.8bn in FY16, which rose by 18% from FY15. EBITDA and EBIT both ended at PhP2.0Bn and displayed double-digit positive variances of 14% in FY16 versus the same period last year.

In line with expectations, RLC reported a flattish growth in sales take-up at PhP9.2Bn in FY16 from projects launched in previous years and from the five residential projects launched in FY2016 namely: Galleria Residences Cebu Tower 1 under the Residences brand; Acacia Escalades, Axis Tower Residences Tower B and Escalades North Tower under the Communities brand; and Brighton Bacolod, a horizontal development under the Homes brand. In October 2016, RLC launched The Residences at Westin Manila Sonata Place under the Luxuria brand and another landed development, Brighton Puerto Princesa. RLC will take on a more conservative stance in CY2017.

To support the company’s plans for each business unit for calendar year 2017, RLC has allotted approximately PhP16.0Bn earmarked for domestic capital expenditures which will be funded through internally generated cash from operations and borrowings.

Lastly, effective 2017, RLC will be adopting a new accounting period from a Fiscal Year beginning October 1 ending September 30 to a Calendar Year beginning January 1 to December 31. The adoption will result to a one-time three month reporting period covering October to December 2016.

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