Filinvest Development targets 20% annual income growth in 5-year plan

GOTIANUN-LED conglomerate Filinvest Development Corp. (FDC) said it is aiming for at least 20% annual growth in net income over the next five years.

“What we’ve announced is a four- or five-year plan of at least 20% annual growth,” FDC President and Chief Executive Officer Rhoda A. Huang said during a media roundtable last week.

This year, the FDC is hoping to reach or exceed the company’s pre-pandemic net income of P12 billion, she said.

  In 2023, FDC’s attributable net income climbed by 58% to P8.9 billion as total revenues and other income increased by 31% to P92.8 billion.

According to Ms. Huang, the previous operating year saw robust growth across all business lines, attributing the performance to a renewed focus on business fundamentals. FDC reported revenue and other income growth in its banking segment at 35%, real estate at 20%, hospitality at 77%, power at 35%, and sugar at 16%.

Ms. Huang also said that FDC is “well-positioned” to take advantage of improving economic data.

 “When you look at controlled inflation, interest rates are coming in, there is a drive in terms of a consumer-led economy. I think it is very positive,” she said.

 On Monday, the Bangko Sentral ng Pilipinas maintained its benchmark interest rate at 6.5% for a fourth consecutive meeting. The country’s inflation rate rose to 3.7% in March, up from 3.4% in February, driven by elevated food prices.

 “We’re well-positioned. Despite the high interest rates, the ability to sell, in terms of sales and revenue for Filinvest Land, Inc. (FLI), there is still a shortfall in available housing in the low to medium segment,” Ms. Huang said.

 “We see greater receptivity below the P3.6 million price range,” she added.

 She also noted that the conglomerate is keeping an eye on certain risks, such as US interest rates and geopolitical tensions.

The company has allocated between P20 billion and P25 billion for its capital expenditure (capex) budget this year. It invested P13 billion in capex in 2023.

FDC Chief Finance Officer Brian T. Lim has said that 60% of the budget would be allocated to real estate, 15% to renewable energy, another 15% to hospitality, with the remaining 10% allocated to other businesses. FDC’s ongoing renewable energy projects include a 20-megawatt (MW) solar energy project in Misamis Oriental and a 12-MW solar energy project in Cebu.

FDC’s expansion in the hospitality segment includes the ongoing construction of the 200-room hotel in Baguio City under the Grafik brand, which will open in the first quarter of 2025.

FDC is also renovating and expanding its Crimson Mactan Hotel, according to Ms. Huang.

Aside from FLI, FDC is engaged in real estate through Filinvest Alabang. The conglomerate also has presence in the power sector via FDC Utilities, Inc., as well as in the hospitality business with Filinvest Hospitality Corp.

 At the same time, the holding company is involved in the banking sector through East West Banking Corp., as well as in the sugar and infrastructure sectors.

FDC shares were last traded on April 8 at P5.51 per share. — Revin Mikhael D. Ochave