FILINVEST Development Corp. (FDC) booked 37% more earnings for the second quarter largely from the banking and real estate businesses, with its venture into the power sector expected to further drive results moving forward. 

In a quarterly report to the Philippine Stock Exchange, the holding firm of the Gotianun family chalked a net income of P2.19 billion for the three months to June. This compares with the P1.6 billion recorded a year earlier. 

Net income attributable to the parent stood at P1.52 billion or 43% above the P1.06 billion posted for the comparable 2015 period. 

FDC cited a 23% increase in revenues coming from its subsidiaries and other income sources to P14.75 billion from P12.01 billion. This pushed the conglomerate’s year-to-date topline 17% to P28.97 billion from 24.83 billion. 

For the first six months, FDC netted P4.40 billion or 28% over the P3.43 billion posted a year earlier. 

The established businesses continued to deliver bulk of the total revenues, with banking unit accounting for 40% and real estate operation for 38% during the semester. The remainder was divided among the power (11%), sugar (9%) and hotel (2%) segments. 

East West Banking Corp. booked a first-half net income of P1.56 billion, a 55% year-on-year surge from P1.0 billion. The bank’s core recurring income base continued to grow by double digits following its expansion. 

“We are starting to see the early fruits of our investments growing the branch store network,” FDC Chairman Jonathan T. Gotianun said in a separate statement issued on Monday. 

For the January to June period, revenues from the real estate business rose 11.9% to P10.95 billion from P9.79 billion. The net income of Filinvest Alabang, Inc. (FAI) soared 81.2% to P710.1 million from P391.9 million, while that of Filinvest Land, Inc. inched 6.7% to P2.47 billion from P2.31 billion. 

“The 7.7% increase in costs of sale of lots, condominiums and residential units was at a slower pace than the 12.8% increase in real estate revenues due to higher share of increase in sales of FAI’s lots with relatively higher gross profit margin. Operating expenses likewise went up at a lower rate, which increased by just 5.4%,” FDC said. 

The conglomerate’s sugar operations, meanwhile, netted P461.9 million or 6.8% more than last year’s P432.5 million on the back of a 7% increase in sugar sales and other income. Hotel operations posted flattish earnings at P93 million. 

In the coming year, FDC expects stronger inflows from the power business. Its power subsidiary FDC Utilities, Inc. (FDCUI)has synchronized the first two of three units of a 135-megawatt (MW) 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,” FDC President and Chief Executive Officer Josephine Gotianun-Yap said in the statement issued on Monday. 

“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,” she added. 

Shares in FDC closed flat at P6.85 apiece on Monday. 

Source: BusinessWorld
By: Keith Richard D. Mariano