CLI eyeing debt market to raise expansion funds

CEBU, Philippines — Cebu Landmasters, Inc. is looking to tap the debt market next year to raise more funds to support its expansion program.

CLI President and CEO Jose Soberano III disclosed to reporters yesterday the listed property firm is planning to issue bonds within the first half of next year to raise around P5-10 billion.

"This step is very much in process now and we're looking at the first half of 2018 for the bond issuance," the executive said in an interview after the company’s annual stockholders meeting yesterday at Cebu City Marriott Hotel.

The bond issuance seeks to expand the company’s financial resources especially in its continued expansion in Visayas and Mindanao.

CLI's capital expenditure for 2018 will be partly funded by the bond sale.

However, as of yesterday, company officials could not disclose the 2018 capex just yet.

Soberano said the bond sale will be made available to a wider spectrum of investors of they will be assured of fixed return.

In a disclosure to the Philippine Stock Exchange yesterday, the firm also disclosed it's on track to surpass the P1.2-billion net income year-end target as it grew its third-quarter 2017 profit by 105 percent on the back of record real estate earnings.

The listed developer reported its year-to-date net income at P940 million, significantly exceeding previous year’s P459 million.

The Cebu-based company attributed this stellar income to the 68 percent hike in real estate revenues in the past quarter to P2.736 billion from P1.625 billion a year ago.

CLI earlier reported that reservation sales in the first nine months 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.

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.

The developer offers projects across the economic spectrum and is largely focused on the mid-market and economic housing segments, which respectively account for 43.92 percent and 40.55 percent of its residential project mix. High-end residential projects accounts for 14.46 percent; socialized housing at 1.07 percent.

The company also said proceeds from its May initial public offering have been utilized ahead of schedule. About 28 percent of the P2.02 billion in net proceeds have been employed in key land acquisitions and joint venture investments.

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 6 percent.

CLI has launched P17-billion worth of 14 projects starting early this year through the early part of next year. (FREEMAN)