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Filinvest profit down 4.6% on expansion costs

Posted on April 1, 2015

MANILA, April 1 (PNA) — Gotianun-led conglomerate Filinvest Development Corp. (FDC) posted a slight 4.61-percent decline in profit in 2014 despite higher revenues, pulled down by business expansion expenses.

In a statement to the Philippine Stock Exchange, FDC said its consolidated net income reached Php6.2 billion last year from Php6.5 billion in 2013.

Net income attributable to equity holders of the parent company was Php3.7 billion, lower than the previous year, as a result of additional costs related to expansion plans.

Its revenues surged by 11 percent to reach Php38.6 billion in 2014 from Php34.9 billion in 2013.

“FDC is at the tail end of a major investment cycle,” said FDC President and Chief Executive Officer Josephine Gotianun Yap.

Yap said banking subsidiary, East West Bank, has just completed its 400-branch expansion thrust.

She said its power subsidiary, FDC Utilities Inc. (FDCUI), will commence operations of its 405-megawatt power plant by 2016.

“On the property front, FLI’s (Filinvest Land Inc.) gross leasable area will grow by 50 percent by end of 2015 from investments made in the retail and BPO (business process outsourcing) office sector,” she added.

FLI recorded a 16-percent jump in profit to Php4.6 billion from Php4 billion.

East West Bank generated Php2.1 billion in net income in 2014, a one percent increase over 2013.

FLI and Filinvest Alabang Inc., together with EastWest Bank, drove FDC’s top line growth.

These businesses accounted for 90 percent of revenues, with 48 percent coming from real estate and 42 percent coming from banking.

Sugar and hotel operations contributed six percent and three percent of total revenues, respectively.

For his part, FDC Chairman Jonathan Gotianun said East West Bank’s core net interest income and profit both increased last year, but was offset by a 16-percent increase in expenses resulting from the last phase of our branch-store expansion.

“We are excited by our prospects in 2015 and onwards… Now that we have recently concluded the final phase of the EastWest Bank branch-store expansion, we are looking forward to reaping the benefits of the wider network in the coming years,” added Gotianun.

The conglomerate is still priming to reach a new peak with most of its power infrastructure projects coming into stream in the next two years.

Yap said FDCUI this year will start contributing to revenues from the sale of power from the 140-MW independent power producer administrator (IPPA) contracts with Unified Leyte and Apo Geothermal.

“Construction of FDCUI’s 3 x 135 MW circulating fluidized bed power plant in Misamis Oriental is in full swing and test runs will commence this year. We expect to bear the initial fruits of our investment in 2016,” she added.

“This will make the FDCUI plant the biggest in Mindanao and will significantly alleviate the power shortage in that region,” the company said. (PNA)

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