By Giovanni A. Flaviano
DAVAO CITY – Cebu Landmasters Incorporated (LCI) continue to dominate in residential development in Visayas and Mindanao after announcing robust sales and now eyeing on a distinct class of buyers branded as “Covid or pandemic home buyers.”
Executive Vice President and Chief Operating Officer Jose Franco B. Soberano during a first semester Investors’ and Analysts’ Briefing in August announced that CLI remains to stay close to its target for the year 2020 giving credit to its strong performance in 2019.
“This inspite the challenges brought about by the pandemic proves the leadership that Cebu Landmasters, Inc. continues to show in our region which made us an outlier of our performance at this time,” he said.
Soberano reported of robust sales with an increase of 41% or P7.4 Billion versus the first half of 2019.
He was also elated to report its healthy and stable balance sheet with total assets of P44.4 Billion compared to the P10 Billion four years ago in terms of assets.
“We reported our highest orderly sales output at the height of the pandemic. This shows you the investment CLI has done in the last two years are bearing fruit because we are able to cater to the market where there is most need and we are now present in different 15 key cities of Visayas and Mindanao.”
When asked how CLI was able to survive the challenges of the COVID-19 pandemic making it a unique player in residential development, Soberano said their ability to navigate the regulations by the Local Government Units (LGU) allowed CLI to continue construction and operating activities in these market. Ironically, while Cebu and the National Capital Region (NCR) were hard hit, majority of the locations where CLI is operating were allowed continued construction.
“Most of our sites are running at 100% construction. If you drive around Cebu City, you would hear construction noise that would be from a CLI construction site.”
”How we were able to do that was really cooperating with the LGUs and especially on securing workers where they are able to live close the construction sites with minimal exposure (from Covid-19).”
He cited their project at 38 Park Avenue where they maintained a high sales level. “As of March 2020 we were already (constructing) on the 2nd floor but at the end of the quarter we were already at the 29th floor,” he said.
Moreover, in order to continue construction, Soberano said CLI was able to extend grace periods to its buyers in order to protect the health of its receivables. By applying this prudent strategy, it was able to meet enough room for the liquidity of CLI operations.
PROTECTING ITS INVESTORS
Soberano assured that CLI is still able to get ahead of those risks so that at the end of the day it is still able to deliver returns and shareholder value not only to shareholders but as well as to stake holders, how it continues to generate construction progress, support the local suppliers, contractors, and continued employment.
“We have paid close to P1 Billion pesos worth of cash dividends and as well as bought back P400 Million pesos of our common shares and they are now sitting as treasury shares. A company that is cognizant of the interests of our shareholders.”
“We are still confident that in 2020 we can still deliver shareholder value in terms of revenue and net income and will definitely be profitable.”
“Soberano said that mid market and premier market segments drove their reservation sales in the first half of 2020 with their affordable housing market posting a 41% growth from last year.
“Economic housing does not mean to vulnerable users but hardworking users. These are people who would work hard to protect their investments and what investment are we talking about? 5k to 10k a month. They would prioritize that. This is the housing for the Filipino family.”
“Even socialized housing is the most affordable class. For both developers it is a compliance. For us (in CLI) it is a service and we sold 680 units during the second quarter.”
He said CLI is well positioned to navigate this crisis also attributing to its strong balance sheet and a robust liquidity situation.
“Rest assured we are not sitting on this comfortably and are very well aware what the situation calls for,” Soberano said.
“In a time of crisis, in a time of challenges it is your balance sheet that will see you through. Palakasan talaga ito ng balance sheet in terms of surviving,” he said.
“We also have P39 Billion pesos worth of approved funding lines and this does not include yet all the lines we are currently working with applications from the different banks,” he said.
PREPARING FOR THE MONTHS AHEAD
For the remaining period of the year 2019, CLI has scaled down projects.
“We have original plans to launch up to 19 different projects for 2020. We realized that we had to revisit our strategies only just enough confidence for return of capital. Most of these project launches concentrate exclusively on the economic housing segments.”
Soberano acknowledged that CLI is living on the demand for housing and what he described as “real” as far as the backlog of housing particularly on a segment he describes as the COVID BUYER or PANDEMIC HOME BUYERS.
“This is a phenomenon we are seeing where there is a class of buyer called the COVID BUYER or PANDEMIC HOME BUYERS. This simply means that people have realized and so are our marketing efforts that truly your own well managed, properly built house is the best PPE (Personal Protective Equipment) outlet where you have to be quarantined, where you have to stay on lock down.”
“So, we had a surge of buyers who were more determined in buying their first house and they were looking for developers with a good track record, was able to deliver at a certain time frame that has a strong property management here in Vismin (Visayas and Mindanao),” he said.
“At a business point, it is our joy there is still good news in housing coupled with the support mechanism of the financial sector, construction industry is there, and we feel it is our responsibility to continue support to that industry,” Soberano said.
“Above industry performance, as the leader of this region, you are able to continue construction. It was important for us to tell our staff that there are buyers who are holding on their investments, workers who rely on their livelihood and being homegrown it is important for us to look at that,” he said.