Filinvest Delivers Strong Broad-Based Net Income Growth of 57%

Filinvest Development Corporation (FDC) reported a net income attributable to equity holders of the parent company of ₱5.9 billion for the first nine months of 2023.

The company’s balance sheet remained healthy at the end of the first nine months of 2023, with total assets of ₱713.1 billion. I Photo: Filinvest

This represented a 57 percent increase from the net income generated in the same period last year, ₱3.8 billion. The growth was driven by a 26 percent increase in total revenues and other income, from ₱51.1 billion in the first nine months of 2022 to ₱64.6 billion in the same period in 2023.

The increase in revenues and other income by business segment were as follows: Banking, 37 percent; Real Estate, 14 percent; Power, 19 percent; Sugar, 25 percent; and Hospitality, 56 percent.

These increases mainly reflected the continued recovery of the businesses from the adverse effects of the COVID-19 pandemic.

The level of total revenues and other income of the conglomerate in the first nine months of 2023 already surpassed the amount generated before the pandemic, ₱63.0 billion in the first nine months of 2019.

"We are pleased to report the strong performance of our portfolio with impressive broad-based growth in revenues and profit across all our business segments in banking, real estate, hotels, power, and sugar despite the challenges of high interest and inflation rates. With enhanced business strategies and execution, and a resilient organization, we look forward to sustaining, if not accelerating, our growth in 2024 and the years ahead,” said FDC President and CEO, Ms. Chiqui A. Huang.

Revenues from EastWest Bank grew by 33 percent in the first nine months of 2023, or by ₱6.1 billion, led by higher interest income and the build-up of high-yielding fixed income securities.

Real Estate’s overall revenues grew by 15 percent, driven by the growth of both residential and mall revenues.

The residential segment was led by the improvement in housing and medium-rise condominium projects, while mall leasing saw continued growth on the back of higher shopper traffic and the normalization of rental rates.

Revenues from Power grew strongly by 19 percent, or by ₱1.8 billion, due to the significant increase in electricity prices driven by high fuel prices.

Hospitality revenues increased by 53 percent, or by ₱698 million, made possible by higher occupancy rates and average room rates across the seven hotel properties with the continued recovery of travel and tourism, albeit mostly domestic.

Other Income improved by 44 percent, or by ₱1.9 billion, coming mainly from EastWest Bank’s higher service charges, fees, and commissions.

On Banking, while costs, mainly interest expenses, operating expenses, and provision for probable losses were higher, these were more than offset by higher interest income, trading gains, and fees, resulting in the 59 percent growth of net income from ₱3.0 billion to ₱4.7 billion in the first nine months of 2023.

Real estate saw a 22 percent growth in net income, which was higher than the growth in revenues and other income of 14 percent.

On Power, net income grew by 1 percent from the first nine months of 2022 to the same period in 2023 despite an increase of 19 in revenues and other income, mainly due to the significant increase in the cost of sales, primarily fuel prices.

Volumes are expected to improve moving forward as the benefits from the Mindanao-Visayas grid connection start to bear fruit. Hospitality’s revenues rose by 53 percent as higher occupancy and average room rates were recorded this year compared to the same period last year.

The increase in room rates and revenues from food and beverage also led to the improvement in gross margins.

The company’s balance sheet remained healthy at the end of the first nine months of 2023, with total assets of ₱713.1 billion. For this year, the Filinvest group has earmarked a total capital expenditure budget of ₱35 billion, of which about half is slated for the real estate and hospitality businesses.

The balance will go to investments in new ventures, including renewables, water, and other urban solutions.

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