Robinsons Land raises capex to P16 B this year

MANILA, Philippines - Property firm Robinsons Land Corp. (RLC) is raising its capital spending by a fifth to P16 billion in fiscal year 2014 to fasttrack the construction of malls, office buildings and hotels.

The property development arm of tycoon John Gokongwei said its earnings picked up five percent to P4.47 billion in fiscal year 2013 that ended last September as higher costs and expenses offset gains in revenues.

“The company has budgeted P16 billion in capital expenditures (capex) covering land and construction for fiscal year 2014,” RLC said.

Specifically, 80 percent or P12.8 billion would be spent for the construction and completion of shopping malls, office buildings and hotels, while the remaining 20 percent or P3.2 billion is allotted for residential condominiums and housing units.

“These will be funded through cash from operations and borrowings,” RLC said. The real estate firm spent P13.2 billion, P9.5 billion and P13.9 billion, in fiscal years 2013, 2012 and 2011, respectively.

Higher spending is seen to continue ensure the profitability of the listed real estate developer.

In fiscal year 2013, RLC’s net income improved 5.6 percent to P4.47 billion from P4.23 billion in the previous period.

The 20-percent jump in operating expenses that hit P9.93 billion in fiscal year 2013 from P8.28 billion offset the 18-percent growth in gross total revenues that reached P15.9 billion from P13.52 billion.

RLC said higher cost of real estate sales, depreciation expense of commercial centers and increased property and maintenance cost for hotels tempered earnings last year.

The commercial centers division accounted for P7.39 billion of the real estate revenues, up 15 percent from P6.43 billion in the previous year.

“Metro Manila malls led by Robinsons Galleria and Robinsons Place Manila contributed to the growth, while most provincial malls  also posted decent growth in rental revenues,” RLC said.

For its part, the residential division’s revenues spiked nearly 30 percent to P5.58 billion from P4.3 billion due to the an increase in buyer equity requirement.

Revenues of the office buildings segment inched up 2.85 percent to P1.44 billion, while the hotels division’s revenues rose almost nine percent to P1.5 billion from P1.38 billion.