Robinsons Land trims 2009 capex

MANILA, Philippines - Robinsons Land Corp., the property arm of Gokongwei-owned JG Summit Holdings Inc., has cut spending plans for 2009 as it takes a cautious stance in light of the slowing economy.

At the sidelines of the company’s annual stockholders’ meeting recently, its president and chief operating officer Frederick Go announced a cut in the capital expenditure budget to only P8 billion from the P10 billion that was earlier earmarked for this year, and the P9.5 billion spent in 2008.

Robinsons is following a domestic trend where companies are reducing their investments in order to maintain healthy liquidity amid weakening market demand due to the economic slump.

Earlier, Ayala Land Inc. disclosed it was only spending P17.4 billion for projects this year, down from P18.9 billion in 2008 while another major player, Vista Land & Lifescapes, set a capital outlay of P7.7 billion, a seven percent drop year-on-year.

“Obviously, 2009 will be more challenging than 2008,” said Go.

Go believes, however, that Robinsons is “doing quite well compared to the industry” in terms of sales.

He said the company posted a 10 percent drop in residential sales during the first quarter of its fiscal year, but the cancellation rate in its existing developments has stayed at 10-15 percent.

“We’re largely reliant on domestic sales that’s why our cancellation rate has not accelerated. We have very little sales overseas,” Go noted.

“Our sales were down in the first quarter as a result of not launching any projects. We expect our sales to greatly improve once we launch our new projects,” he added.

Robinsons is set to unveil five condominium projects in the Ortigas business district, in Quezon City, Makati and Parañaque.

It will also open a budget hotel at the first two floors of Robinsons Cybergate Plaza in Mandaluyong City and another hotel in Tagaytay.

For the fiscal year ended Sept. 30, 2008, Robinsons posted a net income of P3.15 billion, up 29 percent from P2.44 billion in the previous year.