FDC net income down 29% in 2020

Filinvest Development Corp. (FDC), the holding firm of the Gotianun Group, on Monday said its attributable net income fell 29 percent last year to P8.5 billion from the previous P12 billion, as its units were affected by the Covid-19 pandemic.

Revenues and other income declined 15 percent to P72 billion from the previous year’s P84.3 billion, as its property business contracted while its banking unit had provisioned higher expenses on probable loan losses.

“some businesses took a harder hit but other businesses continued to deliver solid performances,” FDC President and CEO Josephine Gotianun-yap said.

east West Bank delivered a net income contribution to the group of P6.4 billion, equivalent to 46 percent of FDC’S bottom line. the property business, composed of the real estate and hospitality segments, delivered a combined P5.3 billion or 38 percent of total, the power subsidiary contributed P1.9 billion in net income or 14 percent of total, while the balance of 2 percent came from other businesses. “Coming from a landmark year in 2019, the Covid-19 pandemic brought an unexpected pause to our 2020 plans. Our immediate response was to work closely with the public and private sectors to mobilize resources towards the primary concern of health care, testing and community assistance to avert the crisis. We then shifted our gears in our business operations and quickly adjusted and innovated to adapt to the circumstances,” Yap said.

east West Bank delivered a net income contribution to the group of P6.5 billion in 2020, 4 percent higher than the P6.2 billion in 2019, driven by higher trading gains and higher margins resulting from the low interest rate environment that consequently lowered funding costs.

Real estate units Filinvest land inc. and Filinvest Alabang inc. contributed P6 billion in net income to the group in 2020, lower by 29 percent from the previous year as the residential segment was affected by lower sales take-up, completion delays and the grace period granted to the homebuyers during the strict lockdown period which delayed real estate sales recognition.

the power subsidiary, FDC Utilities inc. registered a 23-percent decline in net income to P1.9 billion in 2020 from P2.5 billion in 2019. Revenues declined by 17 percent to P8.5 billion as volume contracted by 24 percent following lower demand from its customers especially during the second quarter. the lower volume was offset by the 10-percent increase in average price to P5.73 per kilowatt hour.

the earlier easing of lockdowns in Misamis Oriental in Mindanao, where its 405-megawatt circulating fluidized bed coal thermal plant is located, has helped improve the situation but energy demand has yet to get back to pre-covid levels even in the Mindanao region.

Hotel operations under Filinvest Hospitality Corp. were the most affected by the pandemic in the group. Hotel operations posted a revenue decline of 63 percent to P1.2 billion in 2020, as occupancy rates dropped across the properties, leading to a net loss of P731 million.

some five out of the six hotels and resorts under the Filinvest group’s portfolio remained in operation throughout 2020 but on very limited basis due to the travel and mobility restrictions.

Crimson Boracay temporarily ceased operations while the entire island of Boracay was on lockdown. the easing of domestic tourism outside of Metro Manila has been helping lift turnover at Crimson Boracay and Crimson Mactan.

the company’s portfolio of six managed properties has approximately 1,800 rooms under the Crimson and Quest brands.