FDC’s net income rose 26 percent in 3Q 2013

November 15, 2013
by Filinvest Development Corporation

Filinvest Development Corporation’s Net Income Rose 26% in 3Q 2013 FDC reported a year-on-year upsurge of 26% in its consolidated net income for the first nine months of 2013 to Php4.3 Billion in 9M13 from Php3.4 Billion in 9M12. Consolidated revenues increased by 24% to PhP25.6 Billion from Php20.5 Billion during the same period last year. Top line performance was largely driven by its listed subsidiaries, East-West Bank (EWB) and Filin vest Land, Inc. (FLI) which contributed 87% of total revenues, or 44% and 43% respectively. Sugar operations contributed 10% while hotel operations contributed 3% of total revenues.

A significant share of growth came from EWB which reported a 28% increase in net income yearon-year, before eliminating entries. Net interest income increased by 41% to Php6.1 Billion, the result of double-digit growth in lending coupled with the decline in the cost of funds. Fee-based in come increased by 51% to Php2.3 Billion. The increase primarily came from service charges, fees, commissions and other charges, mainly attributable to the increasing deposit base and consumer loan portfolio which attract transaction and service fees. Trading and securities gains increased by 28% to end at Php1.5 Billion as of third quarter of 2013. Most of these trading gains were booked in the first half of the year.

EWB expects to further grow its deposit base by increasing the number of branches to 400 by 1Q 2014 from 337 at the end of September 2013. Growth in both loans and deposits has allowed the bank to maintain its industry leadership in net interest margin, currently at 8.3% for 9M13 which is double the industry average.

Total income and other revenue from real estate operations increased by 15% in the first nine months of 2013 to Php11.0 Billion against the same period last year. The growth resulted from continued robust real estate sales and steady growth in mall and rental revenues. Real estate sales
reached Php8.3 Billion, an increase of 18% over the first nine months of last year, owing to a) high er sales of middle-income projects consisting of medium-rise buildings (MRBs) and high-rise build ings (HRBs); b) higher sales of affordable house and lot units; and c) increase in sales of FCC lots. Mall and rental revenues, likewise posted a considerable growth of 9% to Php1.7 Billion, due to higher occupancy rates.

Sugar sales in the first three quarters improved by 76% year-on-year to Php4.8 Billion before elim inations. This was partly due to increased capacity due to investments in improvements in efficiency.

Year-on-year hotel revenues increased by 53% to Php0.8 Billion in 9M13. This was the result of both an increase in occupancy rate and an increase in room rate of Crimson Mactan as well as the addition of Crimson Alabang which was formally launched on March 21, 2013.

At the end of September, FDC had a cash balance of Php21.2 Billion, with long-term debt of Php53.8 Billion. The conglomerate maintained a net long-term debt to equity ratio of 0.39 to 1.

In other developments, FDC, through FDC Misamis Power Corporation, recently selected the con tractors for its 405-megawatt coal plant in Mindanao which could start commercial operations by early 2016. In addition, FDC announced this week its plans to offer Php10 Billion in long-term bonds in January 2014 after receiving the highest credit rating of PRS Aaa from Philratings Ratings Services Corporation.

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