Jump or Slump? Property Developers 2020 Income

The COVID-19 pandemic has created a drastic effect worldwide, which undoubtedly impacted the construction, tourism, and foreign and local real estate industries. One of the problems caused by this outbreak is the economy’s downfall, which subsequently affected different companies’ net income. 

Lobien Realty Group (LRG) records that COVID-19 has enormously influenced the Philippines’ real estate industry as the pandemic effectively hinders most businesses’ operations. According to Oxford Economics, the Philippine economy’s projected growth is down to 3.9% in 2020, from its original estimate of 5.9%. One factor of this slump is the country’s response to this health crisis. 

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Different companies experienced lower sales, lower unit reservations, and delayed timelines for construction projects, among others. Tourism suffered, and some hotel and resort companies experienced low to zero bookings. There were retail shops which closed. 

Let us look at the list of major property developers’ declared revenues and net income during the COVID-19 pandemic. 

Ayala Land

“Ayala Land recorded consolidated revenues of P63.32 billion and a net income of P6.37 billion, a 48% and 73% decline, from P121.66 billion and P23.21 billion, respectively, due to the impact of COVID-19 on business operations.”

“In the third quarter alone, the company registered P22.1 billion in revenues, a 73% improvement from the second quarter while net income in the third quarter reached P1.8 billion, a substantial advancement of almost nine-fold compared to only P197 million in the second quarter as government restrictions started to ease.”

For more information, kindly refer to these links: https://www.ayalaland.com.ph; https://ir.ayalaland.com.ph/financials/financial-highlights/

Company: Filinvest Land, Inc.

“In the first half of 2020, FLI reported a 30% decline in gross revenues to Php8.81 billion from Php 12.62 billion in the same period last year, and a 24% drop in net income attributable to equity holders of the parent to Php2. 42 billion from Php3.04 billion”

“The second quarter was a most difficult time for the company with ECQ limiting the operations of our malls and construction restrictions affecting residential revenue recognition.” said FLI President and CEO Josephine Gotianun-Yap.

For more information, kindly refer to these links: 

https://www.filinvestland.com; https://www.filinvestland.com/sites/default/files/pdf_files/SEC%2017-C%20FLI%20Press%20release%20-COVID-19%20continues%20to%20impact%20Filinvest%20Land’s%201H20%20results.pdf; https://www.filinvestland.com/news/fli-q1-income-24-p184b; https://www.reuters.com/companies/fli.PS/key-developments

Company: SM Prime Holdings, Inc.

“SM Prime Holdings, Inc. (SM Prime), one of the leading integrated property developers in Southeast Asia, reported a P18.0 billion consolidated net income in 2020, as compared to P38.1 billion in 2019. Consolidated revenues is P81.9 billion in 2020, as compared to P118.3 billion in 2019.”

“SM Prime’s residential business, led by SM Development Corp. (SMDC), posted a 6% revenue increase in 2020 to P46.5 billion from P43.7 billion in the previous year. Operating income, likewise, increased by 16% to PHP19.7 billion from P17.0 billion. SMDC’s reservation sales registered a 10% growth, bringing the sales take-up to P99.0 billion in 2020 from P90.00 billion in the previous year.”

For more information, kindly refer to these links: 

https://smprime.com/
https://smprime.com/company-releases/sm-prime-nets-php18-billion-fy202

Company: Vista Land & Lifescapes, Inc.

“Vista Land & Lifescapes, Inc., one of the country’s leading integrated property developers and the largest homebuilder generated consolidated total revenues of P25.7 billion and consolidated net income of P5.5 billion for the first nine months of 2020, a decline of 25% and 39%, respectively from the same period last year as COVID-19 continues to impact the Company’s business operations.”

For more information, kindly refer to these links: 
https://www.vistaland.com.ph
https://www.vistaland.com.ph/news/vista-land-nets-p5-5-billion-optimistic-for-the-rest-of-the-year-as-sales-uptrend-is-sustained/

Company: Megaworld Corporation

“During the first nine months of 2020, Megaworld recorded a net income of P8.1-billion, down 40% from the P13.7-billion recorded in the same period last year as the company’s core businesses were affected by months of strict lockdowns imposed by the government. Consolidated revenues, likewise, declined by 30% year-on-year to P33.3-billion from P48.1-billion last year.”

For more information, kindly refer to this website:
https://www.megaworldcorp.com ; https://www.megaworldcorp.com/news-and-updates/megaworlds-rental-income-recovers-q3-13-qoq#:~:text=During%20the%20first%20nine%20months%20of%202020%2C%20Megaworld%20recorded%20a,lockdowns%20imposed%20by%20the%20government

In summary it was a slump for Ayala Land, Filinvest Land, SM Prime, Vistaland, and Megaworld.  It was a jump for SMDC. 

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The challenges brought by the COVID-19 crisis have caused a massive collapse of opportunities. Sometimes, opportunities seek to find in this health crisis where real estate market expectations are improving, interest rates are projected low, and future sales are calculated to grow in 2021.

If you decide about buying or even selling your house, you need to consider taking advantage of these challenging times in the real estate market. 

Reach out to your local real estate broker for you to start your plan in terms of finding a house.

#realestateblogph | #realestateblogphpropertynews | #REBPH | #realestate | #propertydevelopers | #2020income | #propertydevelopersincome | #diegosarcaoga

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Original article written by Diego Sarcaoga, REBPH Intern.

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