December 21, 2014

RLC posts 5% hike in FY14 earnings

In a briefing yesterday, Robinsons Land Corp (RLC) said preliminary figures point to a 5% hike in net income to P4.7b in its fiscal year ending 30 Sep 2014 (FY14). FY14 earnings were dragged by the combined impact of a fire that hit its flagship Robinsons Galleria mall, the destruction wrought by a super-typhoon that affected its mall in Tacloban, the temporary closure of mall space in its flagship malls in Metro Manila to give way to H&M and Uniqlo, and the slow takeup in its two new BPO office buildings in Ortigas.

Mall revenues, which accounted for 48% of its total revenues, grew 10% yoY to P8.1b while mall EBITDA margin fell slightly to 68% from 69% in the previous year. Despite the 42% hike in gross leasable space, revenues grew by just 7% due to the slow take-up in Cyberscape Alpha and Beta BPO office buildings which were completed in March 2013. About 87% of Alpha were taken up as of 30 Sep but this included the 5,000sqms (out of the 42,000 sqm total GLA) taken up by RLC for its own use. Beta had an 88% lease-out rate.

Meanwhile, residential revenues which accounted for 34% of total revenues grew by just 5% given the 15% decline in sales takeup for Robinsons Residences products that contributed about half of total sales takeup.

Our take: The results came 6% below consensus forecast. This is the second year that RLC’s income growth hovered at around 5%. It remains to be seen if earnings tenants, the contribution may be smaller than expected given that RLC has can recover in FY15 given that revenues from its flagship Metro Mall will continue to be weighed by the ongoing fit-out by new tenants H&M and Uniqlo.

While office revenues should gather momentum as the new BPO office buildings gain new occupied a good portion of the first building. We will firm up our numbers for RLC upon the release of its final numbers next month. – WealthSec