PROPERTY developer Cebu Landmasters, Inc. (CLI) said on Tuesday that it was aiming for a 42-percent increase in sales to P5.7 billion next year to hit a full-year net income goal of P1.7 billion.
The net income target represents a 47-percent increase from this year’s projected earnings of P1.2 billion.
It said growth would be driven by ongoing projects set for completion in 2018, namely Casa Mira Towers Labangon, MesaVerte in Cagayan de Oro, and Base Line Center Phase 1 (Baseline HQ/Citadines, Baseline Premier).
CLI has about 20 planned new projects in 2018. Upon completion, these 20 additional projects will add to CLI’s 46 existing developments.
“This shows how CLI lives up to its fast turnaround strategy, which is to launch project six months after land purchase and to turn over in two to three years after launching,” the company said.
CLI is also set to issue retail bonds worth P10 billion starting next year to fund its ongoing expansion.
In an interview with reporters on the sidelines of the company’s investors’ briefing, CLI Chief Finance Officer Stephen Tan said they are likely to issue the bonds in three tranches— P3 billion for the first tranche, P2 billion for the second tranche, and P5 billion for the final tranche.
The bonds will have a tenor of from five to 10 years.
“[It’s a] P10 billion shelf registration but the programs will be P3 billion, P2 billion, and then should the need come in the next three years, then we’ll fully avail [of]the … next P5 billion,” Tan said.
“What we do want [is]to match that with the upcoming projects. [The] P3 billion, P5 billion, that will easily be used up for the upcoming projects that we have,” he added.
According to Tan, CLI’s Board of Directors has already approved the planned issuance. The bond program is set for registration with the Securities and Exchange Commission by end-February 2018, with the listing of the bonds scheduled for April or May.
Tan said the bond issue will complement its recent initial public offering (IPO) and “will help us preserve or conserve our ability to borrow from the banks because now the funders will come from the retail investment market.”
“And we feel that by doing the bond fresh from our IPO… will not be as challenging because we just came from the market with our IPO… The recall is still there in the financial market,” he said.
“We’d like to believe that doing the bond will help boost our share price because it’s a good complement to the IPO” as it provides a good mix of financing from both debt and equity, he said.
CLI earlier said it was optimistic of surpassing its year-end target income of P1.2 billion due to robust sales and the progress of ongoing projects.
For the first nine months of the year, CLI said its net income has more than doubled to P940 million from P459 million a year ago.
This was driven mainly by a 68 percent surge in revenues in the second quarter to P2.7 billion from P1.6 billion in the previous year.
It said reservation sales in the first nine months hit P3.66 billion, already surpassing its full-year 2016 reservation sales of P2.9 billion.