Cebu Landmasters to issue bonds to fuel expansion

Jose Soberano III, Cebu Landmasters Inc. CEO and president (with microphone), discusses the performance and plans of the company during Monday’s Cebu Landmasters annual stockholders meeting at the Cebu City Marriott Hotel.
(CDN PHOTO/LITO TECSON)

2018 TARGET

Homegrown property developer Cebu Landmasters Inc. (CLI) is primed to once again tap the capital market in the first half of 2018 as it seeks to fuel its prospects for expansion.

Jose Soberano III, CLI president and chief executive officer, said they plan to raise P5 billion to P10 billion through the issuance of retail bonds.

“This will be made available to a wider spectrum of investors, and they will be assured of fixed returns on their investments,” Soberano told reporters on the sidelines of CLI’s annual stockholders’ meeting at the Cebu City Marriott Hotel on Monday.

Tap capital market

The company first tapped the capital market after listing at the Philippine Stock Exchange and launched an Initial Public Offering (IPO) in June this year, raising fresh equity capital amounting to P2.15 billion.

CLI has already used P605.6 million or 28 percent of the IPO proceeds in key land acquisitions and investments in joint ventures.

Soberano said that moving forward, the proceeds of their upcoming bond sale will be used for the actual development of their projects.

He said that they are currently in the process of coming up with the terms for the retail bond issue.

Loans, funds

In its bid to expand its financial resources, the company is also considering term loans and other funding options.

CLI has launched and is planning to launch 14 projects across Visayas and Mindanao worth P17 billion starting early this year until the early part of 2018.

It has yet to finalize its capital expenditure for next year and onward.

The developer’s expansion plans are anchored on its robust growth over the last five years, posting a 150.5 percent compounded annual growth in net income between 2012 and 2016.

In a disclosure on the PSE on Monday, CLI said it was on track to surpass its P1.2-billion net income year-end target as it grew its third-quarter 2017 profit on the back of record real estate earnings.

P940 million

The publicly listed firm, considered as a major powerhouse in the Visayas-Mindanao area, reported its year-to-date net income after tax at P940 million, significantly exceeding the previous year’s P459 million.

CLI attributed this report to the 68-percent increase in real estate revenues in the past quarter to P2.736 billion from P1.625 billion a year ago.

The company earlier reported that reservation sales during the first nine months of this year reached P3.66 billion, 26 percent more than the P2.9 billion in reservations sales registered for the entire 2016.

“We’re very pleased with our company’s performance this year, but we still have more projects to launch for the balance of the 2017,” Soberano said.

Upcoming projects

Key projects scheduled to be launched in the fourth quarter include the mixed-use Astra Centre in Cebu City which will feature 10,000 square meters of retail space, 467 residential units and 158 hotel units; the 727-unit Casa Mira Towers in Guadalupe, Cebu; and the 351-unit Base Line Prestige residential condominium, also in Cebu.

Also set to be launched or are ongoing are four projects in Davao, three in Cagayan de Oro, two in Bacolod and two in Iloilo.

42 projects

There are 42 projects in its current portfolio in various stages of construction, cumulatively valued at P45.02 billion.

Residential condominiums account for the largest share in CLI’s project mix at 52 percent, followed by residential subdivisions at 26 percent.

Commercial developments account for a 16 percent share in the mix while hotel projects hold the remaining percent.