PUBLICLY listed Cebu Landmasters Inc. (CLI) reported on Thursday an impressive 72-percent hike in net income to P2.17 billion in 2018, from P1.26 billion two years ago due to positive market response to its ongoing projects.
Net income attributable to the parent company likewise grew 36 percent to P1.66 billion year-on-year (YoY). The growth momentum of the regional property developer was sustained as consolidated revenues reached P6.76 billion, or 72 percent higher than P3.94 billion in 2017.
“We are very proud to report these exceptional 2018 results to our shareholders,” said Jose Soberano III, president and CEO of CLI.
Soberano said 2018 saw their aggressive development activities as they launched a full range of projects “to fill opportunities offered by various VisMin [Visayas and Mindanao] markets—from residential condominiums and subdivisions to mixed-use projects and hotels.”
CLI’s improved financial performance could be mainly attributed to robust sales and higher number of projects under construction in 2018, namely, Mivesa Garden Residences Phase 3, Casa Mira South and Latitude Corporate Center—all located in Cebu—MesaTierra Garden Residences in Davao and MesaVirre Garden Residences in Bacolod.
“All these led to our robust financial performance and sustained momentum,” the top executive said.
The Garden series under CLI’s mid-market brand accounted for 45 percent of revenue contributions in 2018, followed by economic housing brand Casa Mira at 28 percent and high-end Premier Masters at 19 percent. In 2017, it was Casa Mira that accounted for 39 percent of the revenue pie, while the Premier brand and Garden series had shares of 34 percent and 24 percent, respectively.
“Mid-market is definitely the way to go. That’s why we spread out from the economic to mid-market. But we also have been doing high-end [projects],” he said.
Location-wise, the company’s projects in Cebu made up about 64 percent of the total topline last year; Davao, 12 percent; and Cagayan de Oro (CDO), 11 percent.
New expansion sites in Bacolod and Dumaguete took up the remaining allocation. Apart from Cebu projects generating 81 percent of the previous year’s total earnings, only CDO reported revenues for 2017.
“We are strongly positioned to sustain our growth in this region. There is a large underserved demand, and CLI will capitalize on its homegrown leadership and diverse product offerings in order to successfully cater to this growing VisMin market,” Soberano said.
With its expansion in CDO, Davao and Bohol this year, the company expects these areas to grow their revenue share in 2019. In the last quarter of 2018, the VisMin property developer started its foray in township development, with the groundbreaking of the P33-billion Davao Global Township (DGT). At an estimated cost of P10 billion, Phase 1 is targeted for completion by 2022.
Reservation sales in 2018 significantly rose by 86 percent to P8.54 billion from the 2017 figure of P4.58 billion. This exceeded the firm’s yearend target of P7 billion by 22 percent.
Soberano said such improved growth came from the robust take-up on their newly launched projects, namely, MesaVirre Garden Residences in Bacolod, as well as Baseline Prestige, One Astra Place in Mandaue and Casa Mira Towers Guadalupe in Cebu.
Recurring income stream of the company also was a bright spot in last year’s earnings. Leasing revenue went up by 26 percent YoY from P45.65 million to P57.48 million on the back of a 42-percent increase in total gross leasable area (GLA) to 8,952 square meters (sq m) as well as from moderate rental rate increases with existing contracts.
As regards its hospitality portfolio, CLI is set to open its pioneering hotel, the 180-room Citadines Cebu City in Base Line Center in the second half of 2019. The company already has an inventory of 950 rooms spread across its properties in Davao, Bacolod and Mandaue.
CLI projects the growth momentum will continue this year, with net income expanding by 20 percent for both consolidated and parent to P2.6 billion and P2 billion, accordingly. Combined revenues is pegged to grow by 25 percent to P8.4 billion as construction of more projects progresses, including 38 Park Avenue, MesaTierra Garden Residences, MesaVirre Garden Residences and Velmiro Uptown.
Recurring revenues by 2023 will also surge as GLA is expected to bolt past 200,000 sq m, contributing 10 percent to the aggregate revenue. Reservation sales is seen to increase by 28 percent to reach P12.5 billion by end of this year as CLI is scheduled to launch P25 billion worth of real-estate sales. The linchpin to the company’s notable growth is its successful diversification effort.
Soberano said: “Cebu Landmasters will continue to diversify its developments from horizontal and vertical residential offerings to mixed-use, hotels, office and estate projects.”
At present, CLI leads the real-estate industry in the VisMin region with 61 projects in eight growth cities—Cebu, Mandaue, Davao, Cagayan de Oro, Dumaguete, Bacolod, Iloilo and Bohol—all in different stages of development.
“We expect the growth momentum to continue. This year, we’ll be launching P25 billion worth of projects to support our real-estate sales,” he said, citing their planned expansion to General Santos, Butuan and Ormoc in Leyte. “That is something that we will be doing in the next quarters, still focusing in very familiar grounds in VisMin.”