Filinvest profit slips 9%

MANILA, Philippines - The investment holding firm of the Gotianun family reported a single-digit drop in first half earnings amid lower trading gains of its banking unit.

In a disclosure, Filinvest Development Corp. (FDC) said its net income slipped nine percent to P2.9 billion in the first semester despite the 4.97-percent increase in revenues to P19 billion from P18.1 billion.

“Notwithstanding the growth in revenues from the property subsidiary and core banking revenues, FDC’s revenues for the first semester reflected a modest increase of four percent attributable to the industry-wide decline in trading revenues experienced by EastWest Bank in 2014,” the listed holding firm said.

Bulk of the investment firm’s total revenues continues to come from the real estate and banking businesses, representing 45 percent and 41 percent, respectively. Sugar accounted for 11 percent of revenues while hotels contributed three percent of revenues.

Net income of property unit Filinvest Land Inc. (FLI) remained strong, growing 15 percent to P2 billion in the six-month period.

Revenues picked up 26 percent to P7.2 billion, supported by a 30-percent uptick in the real estate business and seven-percent growth in the leasing business.

However, banking subsidiary EastWest Bank’s net income slipped 18 percent to P1 billion as a result of lower trading gains, lower miscellaneous income and higher income taxes.

“EastWest Bank is in the last phase of our branch expansion with a target of 400 branches by yearend. While we expect to feel the full impact of this on operating expenses this year, this will catapult earnings to higher levels once the branches become productive and mature,” said FDC chairman Jonathan Gotianun.

EastWest Bank has opened 39 branches go for this year, bringing its total network to 386 branches.

The lender said it maintained an industry-leading net interest margin at 8.1 percent for the first half, driven by sustained growth in high-yield consumer loans and improvement in funding costs.

FDC Utilities Inc., the conglomerate’s power division, broke ground for its 405-megawatt (MW) power plant in Mindanao late last year and is expected to be operational by early 2016.

In November, FDC Utilities bagged the independent power producer administrator contract for the 40-MW output of the Unified Leyte geothermal power plant’s contracted capacity.

FDC also registered as a potential bidder for the P24.4-billion Bulacan bulk water supply, one the government’s Public-Private Partnership (PPP) projects scheduled for bidding this year.

The investment firm allotted P38 billion for its capital spending this year, substantially higher than the P20 billion in 2013, to support property development projects and its foray into the power generation business.