Filinvest Land Incorporated · PSE:FLI
Filinvest Land — Q1 2020 Earnings Presentation
36 slides from Filinvest Land's earnings presentation, May 21, 2020
Slide 1: Full Year 2019 and 1st Quarter 2020 Analysts' Briefing
Full Year 2019 and 1st Quarter 2020 Analysts’ Briefing May 21, 2020
Slide 2: Presentation Outline
Presentation Outline • Full Year 2019 Results • COVID-19 Response • First Quarter 2020 Results • Outlook for 2020 5/30/2020 2
Slide 3: FY 2019 Key Messages
FY 2019 Key Messages • FLI recorded total revenues of P25.7B and net income of P6.3B, growing by 16% and 7%, respectively. • Real estate revenues increased by 18% to P17.0B due to high sales take-up in 2018 coupled with higher completion rates in 2019. • Rental services (Leasing) revenues grew by 25
Slide 4: 2019 Total Revenues
2019 Total Revenues (Php B) +16% 25.67 22.21 2018 2019 4
Slide 5: 2019 Real Estate Revenues
2019 Real Estate Revenues (Php B) 18% 17.01 14.40 Increase in real estate sales revenues due to high sales take-up in 2018 and catch-up of delayed revenues caused by extended payment terms 2018 2019 5
Slide 6: 2019 Rental Services Revenues
2019 Rental Services Revenues (Php B) 7.00 +25% • Growth driven by completion and high 5.61 Retail occupancy rates of office buildings completed in Retail 2018 and 2019 Offices • 2 office buildings completed in 2019 Offices • Office occupancy: 91% • Retail occupancy: 73% • Overall occupancy: 85% 201
Slide 7: 2019 Net income growth of 7%
2019 Net income growth of 7% Php M 2019 2018 Revenues 25,673 22,205 Real estate 17,013 14,404 Rental services 7,009 5,608 Interest and other income 1,249 1,656 Equity in net earnings 402 537 Costs 10,982 9,470 Cost of real estate sales 9,854 8,339 Cost of rental services 1,128 1,131 Operating Expens
Slide 8: Stable margins
Stable margins 2019 2018 GPM of real estate sales 42% 42% GPM of rental services 84% 80% % of G&A to Revenues 9.6% 10.5% % of S&M to Revenues 5.6% 6.5% Tax rate 21% 22% Net income margin 25% 27% • Better GPM of rental services due to higher occupancy rates of rental properties • Improved G&A to reve
Slide 9: Balanced income mix from real estate sales and office/retail leasing
Balanced income mix from real estate sales and office/retail leasing Php6.5B net income breakdown Real Estate Leasing Equity in Net Earnings 6% 46% 48% 9
Slide 10: 2019 launches amount to Php13.1B
2019 launches amount to Php13.1B Project Type Location Est. Sales Value (Php M) New Leaf Horizontal Cavite 1,471 Mira Valley Horizontal Rizal 921 Montebello Ph3 Horizontal Calamba 557 Hampton Orchards Horizontal Pampanga 881 Futura Mira Horizontal Calamba 776 Futura Plains Horizontal Rizal 810 Centr
Slide 11: Sales take-up
Sales take-up Php Billion Breakdown of 2018 2019 Sales Take Up 25.49 -19% Socialized 3% 1% 20.65 Affordable/Middle 90% 94% Income High-End / Others 7% 5% 2018 2019 OFW Share of Sales 2018 2019 32% 31% Take Up Decline in sales take-up due to: • Less launches compared to 2018 • Reduced HRB inventory 1
Slide 12: Rental Portfolio
Rental Portfolio (in ‘000 square meters) +9% 777 712 2018 2019 12
Slide 13: CAPEX for 2019: Php20B
CAPEX for 2019: Php20B Office leasing 26% Retail leasing 6% Residential 52% Land Acquisition 16% 13
Slide 14: Debt level remains moderate
Debt level remains moderate Dec. 31, 2019 Dec. 31, 2018 Change (%) (Php M) (Php M) Total Assets 173,696 158,860 +9% Total Borrowings 63,413 59,784 +6% Net Debt 58,639 53,364 +10% Stockholders’ Equity 72,164 67,272 +7% D/E Ratio 0.88x 0.89x Net D/E Ratio 0.81x 0.79x Low cost funding with low interest
Slide 15: FLI Response to the COVID-19 Health Crisis
FLI Response to the COVID-19 Health Crisis 5/30/2020 15
Slide 16: Customer Support
Customer Support CUSTOMER SEGMENT FLI SUPPORT Residential Buyers (Low and Mid- • Grace period during the ECQ period income projects only) (2 months) • Payments may be made over 6 months or payment period may be extended equal to the ECQ period (2 months) • Waiver of penalties and interests Mall Tena
Slide 17: Support to Government
Support to Government (through Filinvest City Foundation) • P100MM total pledged donation for fight against COVID-19 • Healthcare support covering PPEs, PCR testing machines and ventilators donated to hospitals and LGUs • Palms Country Club as temporary accommodation area and food for RITM front lin
Slide 18: 1st Quarter 2020
1st Quarter 2020 5/30/2020 18
Slide 19: 1Q20 Key Messages
1Q20 Key Messages • FLI recorded total revenues of P5.1B and net income of P1.3 B, declining by 29% and 25%, respectively. • Real estate revenues decreased by 39% to P3.1B due to delayed completions and the grace period given to buyers during the ECQ period. • Rental services (Leasing) revenues grew
Slide 20: 1Q20 Total Revenues
1Q20 Total Revenues (Php B) 7.20 -29% 5.15 1Q19 1Q20 20
Slide 21: 1Q20 Rental Services Revenues
1Q20 Rental Services Revenues (Php M) +4% 1,785 1,718 Lower retail mall revenues Retail due to rent waiver for closed Retail stores during the ECQ Office Office 1Q19 1Q20 (in Php M) 1Q19 1Q20 Offices 1,228 1,453 21 Retail 490 332
Slide 22: 1Q20 Real Estate Revenues
1Q20 Real Estate Revenues (Php B) 5.11 -39% • Effect of lower sales take-up in 2019 • Delayed completion 3.09 of projects due to ECQ • Effect of grace period granted on recognition of sales 1Q19 1Q20 22
Slide 23: 1Q20 Net income declined 25%
1Q20 Net income declined 25% Php M 1Q20 1Q19 Revenues 5,149 7,203 Real estate 3,094 5,111 Rental services 1,785 1,718 • 29% decline in total Interest and other income 249 318 revenues Equity in net earnings 21 56 • 34% decline in direct costs Costs 2,198 3,342 • 17% decline in Cost of real estate sa
Slide 24: Stable Margins
Stable Margins 1Q20 1Q19 GPM of real estate sales 41% 42% GPM of rental services 79% 78% % of G&A to Revenues 8.5% 6.5% % of S&M to Revenues 4.9% 5.0% Tax rate 20% 24% Net income margin 27% 26% • Improved GPM of rental services due to higher office leasing revenue as a result of high occupancy • % o
Slide 25: Balanced income mix from residential development and office/retail leasing
Balanced income mix from residential development and office/retail leasing 1Q20 (Php1.41B) Real Estate Leasing Equity in Net Earnings 1% 48% 51% 25
Slide 26: Php 2.1B worth of new projects in 1Q20
Php 2.1B worth of new projects in 1Q20 Project Type Location Est. Sales Value (Php M) Tropics 4 Phase Horizontal Rizal 260 1 Futura Vinta MRB Zamboanga 785 Studio N HRB Alabang 1,031 (Block 50) TOTAL 2,076 26
Slide 27: 1Q20 Sales take-up declined 14%
1Q20 Sales take-up declined 14% Php Billion Share of 2019 1Q20 Sales Take Up Socialized 1% 1% 5.64 -14% Affordable/Middle 4.87 Income 94% 93% High-End / Other 5% 6% 2019 1Q20 OFW Share of Sales 31% 25% 1Q19 1Q20 Take Up • Effect of Taal Volcano eruption and COVID-19 27
Slide 28: CAPEX spent for 1Q20: Php3.4B
CAPEX spent for 1Q20: Php3.4B Retail leasing 7% Office leasing Residential 41% 29% Land Acquisition 23% 28
Slide 29: Debt level remains moderate
Debt level remains moderate March 31, 2020 Dec. 31, 2019 Change (%) (Php M) (Php M) Total Assets 177,115 173,696 +2% Total Borrowings 64,956 63,413 +2% Net Debt 59,618 58,639 +2% Stockholders’ Equity 73,575 72,164 +2% D/E Ratio 0.88x 0.88x Net D/E Ratio 0.81x 0.81x • 98% fixed rate vs. 2% floating r
Slide 30: Outlook for 2020
Outlook for 2020 5/30/2020 30
Slide 31: Residential Market
Residential Market • Reduced launches from Php30 Billion to Php 13.4 Billion worth of new residential projects • MRB product segment in urban areas or key regional centers to take lion’s share of developments • Continued focus on core end-user market • Selective expansion in new territories for both
Slide 32: Optimization of Digital Marketing
Optimization of Digital Marketing Use of technology for: • virtual site tours • online reservation system • online payment systems • online sales training 5/30/2020 32
Slide 33: Investment Properties
Investment Properties • Construction delays due to ECQ to impact 72,000 sq m of the 210,000 square meters under construction and due for completion in 2020; 72,000 sq m to slide to 2021 • Under the adjusted plans, the following are scheduled for completion in 2020: • Office : 75,000 sq m of GLA (14%
Slide 34: Filinvest Innovation Park at New Clark City
Filinvest Innovation Park at New Clark City • Heightened interest from light manufacturing and logistics companies • Ready to accommodate construction of locators by 3Q20
Slide 35: 2020 Planned Capital Expenditures of P16 Billion, 20% lower than 2019
2020 Planned Capital Expenditures of P16 Billion, 20% lower than 2019 Retail leasing 8% Office leasing 44% Residential 34% Land Acquisition 14% 5/30/2020 35
Slide 36: Key Takeaways
Key Takeaways • Close to reaching a balanced portfolio of 50% Investment Properties and 50% Residential Development in line with thrust to grow recurring income base of stable cashflows • Focus on the underserved core affordable, middle-income and end-user markets projected to have a faster recovery