Philrealty back in the black with P324-M net income

After two years in the red, Philippine Realty & Holdings Corp. (Philrealty) made a significant turnaround in its financial performance last year as it posted a net income of P323.52 million, from a net loss of P94.4 million in 2004.

In a financial report filed with securities regulators, Philrealty said the turnaround was due to gains from the reversal of excess accrued interest in accordance with the court-approved rehabilitation program and by the jump in equity earnings.

In December 2005, Philrealty started payment of interest on its restructured loan.

Consolidated gross revenues reached P507 million, up 223 percent from P157 million in 2004. Rental income went up 22.1 percent as major areas were leased out. Equity earnings almost doubled from 2004’s P37.31 million to P70.14 million.

The company’s investments in diversified lines of business remained as major revenue sources. Banking unit International Exchange Bank reported a 55.2-percent jump in net profit to P804 million from P518-million as assets grew by P6 billion to P58 billion.

Manufacturing arm A.Brown Co. Inc., on the other hand, posted a net income of P40.41 million, up 36.54 percent from the year ago’s P29.6 million while insurance subsidiary Meridian Assurance Co. reported a net income of P2.29 million, 14.37 percent higher than the previous level.

Philrealty’s total assets stood at P4.51 billion as of end-2005, lower by P158 million. Bank borrowings, on the other hand, amounted to P1.97 billion last year from P2.15 billion in 2004. It settled a P185-million loan from Export & Industry Bank by way of dacion en pago.

The company’s management has been continuously undertaking measures to address the liquidity and profitability of future operations. Since 1998, the realty firm has offered land properties to banks as payment for its obligations through dacion en pago to substantially reduce its obligations.

The company’s strategy is to enter into joint ventures whereby Philrealty will merely contribute the land and other pre-development expenditures while the partner will shoulder the cost of construction of the building.