April 21, 2014

GERI’s 2013 net income up 29% YoY

In its filing to the Exchange last week, Global Estates Resorts Inc (GERI) reported a net income of P341m in 2013, up 29% YoY. This came on a 34% rise in total revenues to P1.6b which was fueled by the 32% growth in real estate sales, doubling of hotel operating revenues and the five-fold increase in maintenance income from management and maintenance of golf courses.

Real estate sales came largely from the sale of residential subdivision lots and townhouses from the Newcoast Shophouse District, Boutique Hotel and The Village in its Boracay Newcoast project, as well as its Twin Lakes projects in Tagaytay and the Sta. Barbara Heights residential projects in Iloilo City.

Our take: Net income to common shareholders was up by only 9% as minority interest was negative in 2012 (thus yielding a higher parent company share). At any rate, we highlight the strong growth and rising contributions of recurring income to total revenues.

In 2013, the combined revenues from hotel operations, golf course management and maintenance as well as rental operations grew 134% YoY and accounted for 32% of total revenues vs. just 18% in 2012. This should get a further boost from the planned development of a mall and office towers in its Southwoods project and other forthcoming township development projects. Meanwhile, real estate sales should also be driven by resumption of sales in previous developments as well as new projects to be launched by the company. – WealthSec