Philratings maintains PRS Aa rating for Robinsons Land’s P1-B bond issue

Local credit rating firm Philippine Rating Services Corp. (Philratings) has maintained its PRS Aa rating for Robinsons Land Corp.’s outstanding P1-billion bonds maturing in 2008.

A PRS Aa rating is defined as: "With large margins of protection. Fluctuations of protective elements, however, may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than for PRS Aaa-rated securities."

Philratings said it considered RLC’s good business franchise and asset quality, its conservative capital structure, and ample cash flow protection in assigning the rating. The Gokongwei-owned company is a major player in the Philippine property market, with its assets spread across the core sectors of the real estate industry.

"Revenue streams show some diversification, anchored primarily on stable lease income from RLC’s commercial centers. Improving the operations of the hotel division, however, continues to remain a challenge in the short-term given the outlook for tourism over-all. Nevertheless, the company is expected to maintain and enhance its solid business profile supported primarily by its well-defined strategy for its core businesses," Philratings said.

RLC is planning to open at least 15 new malls in the next five years or two to three new malls or commercial centers every year. It plans to break ground for at least two new midsize malls in Metro Manila before yearend. The malls will each have approximately 30,000 square meters in floor area.

Three new malls are scheduled to open this year, which will bring to 18 the total number of its commercial centers with a total gross floor area of 1.1 million square meters by the end of the year.

These include the Robinsons Metro Gateway in Mandaluyong, as well as malls in Bacolod City and Angeles, Pampanga.

RLC currently has four malls operating in Metro Manila, namely, Robinsons Galleria in Ortigas, Robinsons Place Ermita, Robinsons Place Novaliches and Robinsons Metro East in Pasig City. The remaining 11 malls are located in various parts of Cavite, Laguna, Pampanga, Cebu City, Iloilo City and Cagayan de Oro.

RLC will spend as much as P4 billion this year to finance ongoing mall projects, high-rise buildings and residential developments.

The company will continue its strategy of forging joint ventures with landowners, pre-selling and selling receivables to government’s funding and guarantee programs and private financial institutions to mitigate financing risks associated with development.

RLC intends to focus on the development of affordable residential condominiums with a price range of P1.8 million to P3.5 million for the middle-income market.

As for its hotel division, RLC intends to maintain its higher-than-industry hotel occupancy rates by strengthening its marketing organization to focus on corporate and leisure travelers, as well as to bolster the domestic market with its airline affiliate, Cebu Pacific Air.