Vista Land nets P8.1B as leasing business grows
VISTA LAND & Lifescapes, Inc. sustained a double-digit growth in earnings last year, as its leasing operations expanded and contributed more while its residential business slowed on weaker demand from overseas Filipinos.
In a media briefing in Mandaluyong City on Tuesday, the Villar-led listed property developer announced its consolidated net income increased 13% to P8.10 billion from the P7.19 billion booked for 2015. Earnings per share accordingly rose to 67.6 centavos from 62.2 centavos.
Vista Land generated about P31 billion in revenues, 7% over the P28.85 billion realized in 2015. It accordingly improved its earnings before interest, taxes, depreciation and amortization (EBITDA) by 19% to P12.99 billion from P10.94 billion.
The leasing business buoyed the company’s bottom line during the period, President and Chief Executive Officer Paolo A. Villar noted.
Vista Land saw its leasing revenues jump 59% to P4.67 billion last year from P2.94 billion. The segment widened its contribution to 20% from 13% of consolidated net income; 26% from 18% of EBITDA; and 15% from 10% of revenues.
The company had 17 malls, 56 commercial centers and four offices at end 2016. In terms of gross floor area, its portfolio of leasable properties expanded to 882,009 square meters ( sq. m.) from 631,073 sq.m. following the acquisition of Starmalls, Inc. in November 2015.
Vista Land intends to further expand its portfolio of leasable properties to 1 million sq.m. toward the year end and to 1.3 million sq.m. by end 2018. It has identified 100 more locations covering 600 hectares in existing developments for commercial projects.
The portfolio will consist mostly of retail spaces within its malls (80%) and offices catering to business process outsourcing locators (20%).
“Reasonably, you can expect that the leasing business will grow easily by double digits this year in terms of share in revenues, net income and EBITDA. It should be at a higher percentage than last year,” Mr. Villar said. The company’s real estate sales, on the other hand, turned out flattish. Revenues from the business rose 2% to P25.03 billion from P24.50 billion, as demand from Filipinos working in the Middle East slowed down.
In 2015, Vista Land registered a 10% increase in real estate sales from P22.32 billion. The overall share of overseas Filipinos in the residential sales of Vista Land failed to rise above 50% when it settled between 50% and 60% in previous years.
“In terms of demand from overseas Filipinos in Middle East, I think we’re affected by what happened in 2016 in terms of the oil price and other uncertainties. You see that sales growth in our residential was slower than in 2015 and a large part of that is because of that,” Mr. Villar said.
“We’re hoping that weakness does not extend to this year. We are cautiously optimistic that this year will be better. Again, I think it’s just temporary,” he added.
Vertical residential projects, in particular, delivered less revenue last year. Its share shrank to 8% from 13% partly because the recognition of revenues depends on the progress of the developments.
“I expect that percentage to be higher next year, however, we’re not relying on condominium sales to be the main growth driver of our business. Definitely it will be over 10% of residential revenues over the long term,” Mr. Villar noted.
Vista Land launched 29 projects, including four mid- rise buildings, with an estimated value of about P26.2 billion in 2016. It plans to launch at least 30 more projects with a cumulative sales value of more than P30 billion within the year.
The company looks to invest P35 billion for the development of the additional retail spaces, offices and residences this year. It incurred P30.9 billion in capital expenditures and working capital in 2016.