APVI just doing its thing; net income up 195%
FY21 profit of ?65 million, up 195% from FY20 profit of P22 million.
The Gokongwei Family’s property management firm, which was spun out of Robinsons Land [RLC 19.50 2.09%] “by way of introduction” in a dividend to shareholders in 2020, exists (for now) to do one thing: own and administer the North Wing of Robinsons Place Ilocos.
Altus Property Ventures Inc's [APVI 17.10 3.64%] 2020 was mangled by COVID, as were the annual reports of all mall operators in the Philippines, as COVID lockdowns basically eliminated foot traffic for long stretches of time, and government policies allowed tenants to delay or otherwise renegotiate lease payments to the mall operators during those scary months in the first year of the pandemic.
APVI’s 2021, in contrast, saw foot traffic to malls return as movement restrictions were eased and business started to return to regular operations (subject, of course, to the Delta wave).
APVI reported a 32% increase in rental income, which it credits to that increased foot traffic and “operating tenants” (yikes: it’s easy to forget how shut down everything was).
However, APVI also reported that it was able to drastically trim its costs associated with earning that rental income by nearly 57%, from P27 million down to just P12 million, by making some accounting adjustments on depreciation to bring itself “in line with peers”, and by reducing the amount that it spends on “professional, management and consultancy fees”. APVI also credits the CREATE Law with greatly reducing its effective income tax rate.
MB BOTTOM-LINE
APVI has always been a bit of an oddity: it was born in a chaotic frenzy of an IPO that saw its share price trade as high as P240/share (before dropping back down to P18.50, which was still an 83% increase: yes, it was insane, and you can read my blow-by-blow of it here), holds only one asset (the North Wing of Robinsons Place Ilocos), and was the subject of several rumors about APVI becoming the Gokongwei Family’s new land development company.
In a way, APVI almost feels like a failed mall REIT, in that APVI’s IPO didn’t return any fresh capital to RLC, and the spun-off entity hasn’t provided shareholders with any dividends nor has it gone ahead and acquired or built anything of value.
It’s just sort of existed.
Which is fine, and overall, still a net positive considering that anyone who owned RLC shares at the time of the IPO by way of introduction was able to receive APVI shares “for nothing”, and then either sell those shares or hold those shares as they saw fit.
I respect RLC for giving its shareholders that choice, and I wish more corporations would spin-off distinct subsidiaries in a similar way to deliver value (and options) to shareholders. I’m looking at you, Globe [GLO 2280.00 1.79%]!
Getting back to APVI’s results for a second, the thing that I’d like (if I were a shareholder) would be the focus on costs reduction: if APVI isn’t going to acquire to grow, it has to spend less to make more.
Those kinds of savings benefit the current year, but also subsequent years, so that’s something to cheer about.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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