Despite the crisis brought about by the COVID-19 pandemic, consolidated revenues of leading residential developer in VisMin Cebu Landmasters remained strong at Php 3.5 billion for the first six months of 2020, closely matching its 2019 levels and validating its market and operational leadership in the region.
While the mid-income and economic housing sectors in general were severely impacted by diminished OFW remittances and construction stoppages during the period, CLI posted record reservation sales of Php 4.613 billion in the second quarter and a 41% growth in sales to Php 7.436 billion in H1 2020 year-on-year. The firm’s economic housing brand Casa Mira contributed 65% of total sales.
The listed company also posted a significant growth in its recurring business by 137% to Php 91.3 million from Php 38.6 million year-on-year. Hotel revenues of Php 38.2 million were attributable to the 180-room Citadines Cebu City, which maintained a high occupancy of 70% throughout the lockdown period. Booking largely came from business process outsourcing companies that housed their employees during the community quarantine period. Rental income likewise improved by 16% and registered at Php 32.3 million.
CLI will continue to serve the undiminished demand for affordable housing in VisMin with a total of 14 projects in 2020 worth Php 19 billion. Four projects in Cebu, Bohol and Iloilo were launched in the first half of the year supported by a wide network of partner brokers and sales agents and process improvement and digitalization.
“We are pleased to launch more projects in the second half as our markets have remained committed to their purchases. The pandemic has made many see that owning a home in a safe and secure community is a good way to secure their family’s future,” says CLI chairman and chief executive officer Jose Soberano III.
Soberano noted that most CLI buyers were local residents prodded by stretched payment terms and grace periods to invest in a home. OFWs accounted for only 20% of the sales in the second quarter, considered as CLI’s best sales performance to date. In previous periods, OFWs had taken up as much as 40% of sales. “We ourselves were surprised by how local demand compensated for the decreased share from OFWs. Home ownership will provide the best security during these times.”
CLI’s strong capital structure will enable the firm to maximize opportunities even in trying times. Planning and ongoing construction works for mixed-use development and hotel projects continue with target completion in 2 to 4 years.
To date, CLI has an undrawn Php 2.7 billion from corporate notes available at 3.45% fixed for five years and 3.56% fixed for seven years. Philippine Rating Services Corporation or Philratings issued a report earlier this month indicating that it maintained its PRS Aa with stable outlook rating to CLI, validating the firm’s strong financial position and stability.
Meanwhile, Soberano reported that even as net income attributable to parent dipped in the first half by 7% to Php 792 million year-on-year, he was confident that the firm was on track to meet its year-end revenue targets as construction of its projects is catching up in the third and fourth quarters.
“Construction sites continue to progress despite the quarantine since Cebu Landmaster’s projects are mostly in cities with minimal quarantine restrictions. By imposing strict health protocols at the job site, we focused on keeping our workers safe and productive. We look forward to handing over units to many of our buyers in the next few months.”
A Php 20 million cash aid was provided by the company to support the families of construction workers and third-party contractors during the lockdown.
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