Vista Land & Lifescapes FY22 net profit up just 6%
Vista Land & Lifescapes [VLL 1.75 1.2%; 443% avgVol] [link] reported a FY22 net income of P7.4 billion, up 6% from its FY21 net income of P7.0 billion.
The Villar Family’s real estate development arm has two main segments: residential real estate and commercial malls and office space.
On the real estate side, VLL reported that real estate income was down 27% to P12.8 billion, due to a decrease in completion rate due to pandemic-related issues like extended payment terms, and that interest income was down 28% to P1.7 billion due to more home buyers taking bank financing instead of VLL’s various in-house financing options.
On the rental income side (malls and offices), VLL reported a 48% jump in income to P13.7 billion, mostly due to the full reopening of malls and other public commercial spaces. In a press release, VLL said that its core net income was up 10% to P7.7 billion, and that it had started P40 billion in projects “across the country”, which was four times higher than the previous year. VLL said that its land acquisitions “remained muted” because it is still trying to maximize its existing landbank.
MB BOTTOM-LINE
This is another “good news bad news” type of event.
On the plus side, VLL gets the benefit of the wildly successful reopening of malls and public commercials spaces to boost its rental income, but on the negative side, it’s still feeling the delayed impact of the COVID-19 pandemic in the form of payment extensions that it provided to home buyers that, when combined with some other quarantine-related issues, meant that VLL wasn’t able to recognize as much revenue as it maybe would have expected due to those delayed turnovers.
That said, the VLL farm-to-house conversion machine isn’t grinding to a halt by any means; they’re pushing ahead with a raft of new projects to sell to buyers that have simply not stopped buying.
I think the trend of buyers shying away from in-house financing is something that VLL shareholders will want to see some creative thinking from management to deal with, as those profits are a pretty tasty cherry on the top of the farm-to-house cake.
VLL didn’t elaborate on why they feel like more buyers are opting for bank financing. That discussion might be pretty interesting, and might reveal the next opportunity in the private financing space.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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