Search our properties.
Find your dream home.

Partner With Us

FINANCIAL AND OPERATING HIGHLIGHTS

Management’s Discussion and Analysis of Financial Condition and Results of Operation

RESULTS OF OPERATIONS:
For the six months ended 30 June 2022 and 2021

Rockwell Land Corporation (“the Group”) registered Php7,732 million in consolidated revenues, higher by 14% from last year’s Php6,796 million. Residential development accounted for 69% of the total revenues in 2022, lower than last year’s 86%.

Total EBITDA reached Php2,876 million, higher than last year’s Php2,530 million driven by higher EBITDA from commercial development. Overall EBITDA margin registered at 37% of total revenues at par compared to last year. The total revenues used as basis for the EBITDA margin excludes gross revenues from the joint venture with Meralco and T.G.N Realty Corporation as these are reported separately under “Share in Net Losses (Income) in JV”. Share in net income in the joint venture contributes 7% to the Company’s total EBITDA.

Residential development and commercial development contributed 44% and 56% to the total EBITDA, respectively.

Consolidated net income after tax registered at Php1,477 million, slightly lower from last year’s Php1,558 million. NIAT to Parent for the six months is Php1,307 million, 5% higher from same period last year of Php1,246 million.

Business Segments

Residential Development generated Php5,361 million, contributing 69% of the total revenues for the period. Bulk of the revenues came from the sale of condominium units, including accretion from interest income.


EBITDA from this segment amounted to Php1,278 million, 31% lower than the same period last year at Php1,843 million mainly attributable to projects with lower percentage completion and higher cost incurred.

Commercial Development revenues amounted to Php2,372 million, 150% higher than 2021’s Php949 million primarily due to recognition of sale of One Proscenium and improved performance of retail segment. This segment contributed 31% to total revenues excluding the share in the joint venture with Meralco for the Rockwell Business Center in Ortigas, Pasig City.


Retail Operations which includes retail leasing, interest income and other mall revenues generated revenues of Php868 million, 88% higher than last year’s Php462 million due to improved average rental and occupancy rate. Office Operations generated Php1,408 million which is equivalent to 18% of the total revenues. Office operations include office leasing, sale of office units and other office revenues.


Hotel Operations, contributed 1% of the total revenues. Its revenues amounted to Php96 million and costs and expenses at Php79 million which includes housing costs for the Company’s employees. Resulting EBITDA is at Php19 million.


The segment’s EBITDA amounted to Php1,598 million, 133% higher from the same period last year due to recognition from sale of One Proscenium and much improved retail performance. This includes the share in net income in the joint venture amounting to Php190 million, contributing 12% to the segment’s EBITDA.

Costs and Expenses

Cost of real estate and selling amounted to Php4,531 million. The cost of real estate and selling to total revenue ratio is at 59%, same with last year.

General and administrative expenses (G&A) amounted to Php894 million, 11% higher than last year mainly due to higher serviced apartment and cinema occupancy and admin costs from improved operations and due to higher manpower costs.

Interest Expense amounted to Php607 million, higher by 5% than last year’s Php580 million. The increase was mainly due to higher average loan balance and interest rate.

Share in Net Income (Losses) in JV associates realized share in net income of JV and associate amounted to Php195 million, higher than last year’s Php186 million. The 5% growth from last year is mainly due to RBC-Ortigas higher average occupancy and rental rate. At its 70% share, the Company generated total revenues of Php299 million and share in net income of Php190 million. The share in net income is reported net of taxes and represents the Company’s share in the operations generated by RBC.

Project and capital expenditures

The Group spent a total of Php3.0 billion (gross of VAT) for project and capital expenditures for the six months of 2022. Bulk of the expenditures pertained to development costs, mainly that of The Arton, Proscenium, Rockwell South and Balmori Suites. These were funded mainly by internally generated funds.

Financial Condition

The Group’s total assets as of June 30, 2022 amounted to Php64.5 billion, slightly lower from 2021’s year-end amount of Php64.8 billion. On the other hand, total liabilities amounted to Php37.5 billion, slightly lower from 2021’s year-end amount of Php38.8 billion. The decrease in total assets were mainly from cash and cash equivalents, trade and other receivables and real estate inventories.

Current ratio as of June 30, 2022 increased to 3.50x from 3.28x as of end 2021. Net debt to equity ratio is at 0.84x as of June 30, 2022, lower compared to 2021’s year-end ratio of 0.92x.

Causes for any material changes (+/- 5% or more) in the financial statements

Statement of Comprehensive Income Items – Six Months 2022 vs. Six Months 2021

9% increase in Real Estate Sales
Mainly due to higher sales booking from projects Balmori Suites and One Proscenium.

17% decrease in Interest Income
Mainly due to sell out and completion of The Arton-West, Proscenium and Rockwell South.

49% increase in Lease Income
Due to higher average rental and occupancy rate of retail segment.

72% increase in Other Revenues
Mainly driven by improved performance of Aruga serviced apartments, Rockwell Club and Cinema.

16% increase in Cost of Real Estate
Due to higher cost recognition from Balmori Suites and One Proscenium following higher revenue recognition.

11% increase in General and Administrative Expenses
Due to higher serviced apartment and cinema costs from improved performance and higher manpower costs.

5% increase in Interest Expense
Primarily due to higher average loan balance and interest rate.

5% increase in Share in Net Income of JV
Due to higher revenues from higher average rental and occupancy rates of RBC Ortigas.

Statement of Financial Position items – June 30, 2022 vs. December 31, 2021

27% decrease in Cash and Cash Equivalents
Primarily due to development costs spend and net repayment of loans.

10% decrease in Trade and other receivables
Primarily due to collections from Proscenium and 32 Sanson.

6% decrease in Real estate inventories
Primarily due to cost recognition of Proscenium and Balmori Suites.

6% increase in Advances to contractors
Primarily due to advances made for projects 8 Benitez, Mactan, Balmori Suites and Nara.

15% increase in Other Current Assets
Due to payment of prepaid taxes and commissions

14% increase in Contract assets
Primarily due to revenue recognition from new sales and project accomplishments.

24% decrease in Other Noncurrent Assets
Due to collection of other receivables from JV partners

7% decrease in interest-bearing loans and borrowings
Due to payments made for first half of 2022.

5% increase in Deferred Tax Liabilities
Due higher income recognition from Rockwell South & Arton.

17% increase in Pension Liability
Due to accrual of retirement expense for the first half of the year.

15% increase in Deposit and Other Liabilities
Due to collection from pre-selling and excess collections over recognized receivables from Mactan Villa.

10% decrease in Non-controlling interests
Due to subsidiary’s preferred shares redemption offset by share in net income of minority shareholders.

Key Performance Indicators

As indicated For the three months ended June 30
  2022 2021
ROA (*) 4.6% 5.0%
ROE (*) 11.1% 12.2%
  As of June 30, 2022 As of June 30, 2021
Current ratio (x) 3.50 3.30
Debt to equity ratio (x) 0.92 0.94
Net debt to equity Ratio (x) 0.84 0.85
Asset to equity ratio (x) 2.39 2.44
Interest coverage ratio (x) 6.16 3.57


Notes:
(1) ROA [Net Income/Average Total Assets]
(2) ROE [Net Income/ Average Total Equity]
(3) Current ratio [Current assets/Current liabilities]
(4) Debt to equity ratio [Total interest bearing debt / Total Equity]
(5) Net debt to equity ratio [(Total Interest bearing debt)-(Cash and cash equivalents) / Total Equity]
(6) Asset to equity ratio [Total Assets/Total Equity]
(7) Interest coverage ratio [EBITDA/Interest Payments]
* ROA and ROE are annualized figures

ROA and ROE are lower vs 2021 at 4.6% and 5.0% mainly from 5% lower consolidated net income. Last year’s net income includes impact of CREATE adjustment amounting to Php300 million.

Current ratio improved to 3.50x from 3.30x yearend due to lower current portion of loans payable.

Debt to equity ratio slightly decreased to 0.92x from 0.94x. Net debt to equity ratio decrease to 0.84x from 0.85x, due to net repayment of loans and lower cash balance as of June 2022.

Asset to equity ratio is slightly lower at 2.39x vs 2.44x last year due higher increase in equity than total assets.

Financial and Operating Highlights

FINANCIAL AND OPERATING HIGHLIGHTS

Management’s Discussion and Analysis of Financial Condition and Results of Operation

RESULTS OF OPERATIONS:
For the six months ended 30 June 2022 and 2021

Rockwell Land Corporation (“the Group”) registered Php7,732 million in consolidated revenues, higher by 14% from last year’s Php6,796 million. Residential development accounted for 69% of the total revenues in 2022, lower than last year’s 86%.

Total EBITDA reached Php2,876 million, higher than last year’s Php2,530 million driven by higher EBITDA from commercial development. Overall EBITDA margin registered at 37% of total revenues at par compared to last year. The total revenues used as basis for the EBITDA margin excludes gross revenues from the joint venture with Meralco and T.G.N Realty Corporation as these are reported separately under “Share in Net Losses (Income) in JV”. Share in net income in the joint venture contributes 7% to the Company’s total EBITDA.

Residential development and commercial development contributed 44% and 56% to the total EBITDA, respectively.

Consolidated net income after tax registered at Php1,477 million, slightly lower from last year’s Php1,558 million. NIAT to Parent for the six months is Php1,307 million, 5% higher from same period last year of Php1,246 million.

Business Segments

Residential Development generated Php5,361 million, contributing 69% of the total revenues for the period. Bulk of the revenues came from the sale of condominium units, including accretion from interest income.


EBITDA from this segment amounted to Php1,278 million, 31% lower than the same period last year at Php1,843 million mainly attributable to projects with lower percentage completion and higher cost incurred.

Commercial Development revenues amounted to Php2,372 million, 150% higher than 2021’s Php949 million primarily due to recognition of sale of One Proscenium and improved performance of retail segment. This segment contributed 31% to total revenues excluding the share in the joint venture with Meralco for the Rockwell Business Center in Ortigas, Pasig City.


Retail Operations which includes retail leasing, interest income and other mall revenues generated revenues of Php868 million, 88% higher than last year’s Php462 million due to improved average rental and occupancy rate. Office Operations generated Php1,408 million which is equivalent to 18% of the total revenues. Office operations include office leasing, sale of office units and other office revenues.


Hotel Operations, contributed 1% of the total revenues. Its revenues amounted to Php96 million and costs and expenses at Php79 million which includes housing costs for the Company’s employees. Resulting EBITDA is at Php19 million.


The segment’s EBITDA amounted to Php1,598 million, 133% higher from the same period last year due to recognition from sale of One Proscenium and much improved retail performance. This includes the share in net income in the joint venture amounting to Php190 million, contributing 12% to the segment’s EBITDA.

Costs and Expenses

Cost of real estate and selling amounted to Php4,531 million. The cost of real estate and selling to total revenue ratio is at 59%, same with last year.

General and administrative expenses (G&A) amounted to Php894 million, 11% higher than last year mainly due to higher serviced apartment and cinema occupancy and admin costs from improved operations and due to higher manpower costs.

Interest Expense amounted to Php607 million, higher by 5% than last year’s Php580 million. The increase was mainly due to higher average loan balance and interest rate.

Share in Net Income (Losses) in JV associates realized share in net income of JV and associate amounted to Php195 million, higher than last year’s Php186 million. The 5% growth from last year is mainly due to RBC-Ortigas higher average occupancy and rental rate. At its 70% share, the Company generated total revenues of Php299 million and share in net income of Php190 million. The share in net income is reported net of taxes and represents the Company’s share in the operations generated by RBC.

Project and capital expenditures

The Group spent a total of Php3.0 billion (gross of VAT) for project and capital expenditures for the six months of 2022. Bulk of the expenditures pertained to development costs, mainly that of The Arton, Proscenium, Rockwell South and Balmori Suites. These were funded mainly by internally generated funds.

Financial Condition

The Group’s total assets as of June 30, 2022 amounted to Php64.5 billion, slightly lower from 2021’s year-end amount of Php64.8 billion. On the other hand, total liabilities amounted to Php37.5 billion, slightly lower from 2021’s year-end amount of Php38.8 billion. The decrease in total assets were mainly from cash and cash equivalents, trade and other receivables and real estate inventories.

Current ratio as of June 30, 2022 increased to 3.50x from 3.28x as of end 2021. Net debt to equity ratio is at 0.84x as of June 30, 2022, lower compared to 2021’s year-end ratio of 0.92x.

Causes for any material changes (+/- 5% or more) in the financial statements

Statement of Comprehensive Income Items – Six Months 2022 vs. Six Months 2021

9% increase in Real Estate Sales
Mainly due to higher sales booking from projects Balmori Suites and One Proscenium.

17% decrease in Interest Income
Mainly due to sell out and completion of The Arton-West, Proscenium and Rockwell South.

49% increase in Lease Income
Due to higher average rental and occupancy rate of retail segment.

72% increase in Other Revenues
Mainly driven by improved performance of Aruga serviced apartments, Rockwell Club and Cinema.

16% increase in Cost of Real Estate
Due to higher cost recognition from Balmori Suites and One Proscenium following higher revenue recognition.

11% increase in General and Administrative Expenses
Due to higher serviced apartment and cinema costs from improved performance and higher manpower costs.

5% increase in Interest Expense
Primarily due to higher average loan balance and interest rate.

5% increase in Share in Net Income of JV
Due to higher revenues from higher average rental and occupancy rates of RBC Ortigas.

Statement of Financial Position items – June 30, 2022 vs. December 31, 2021

27% decrease in Cash and Cash Equivalents
Primarily due to development costs spend and net repayment of loans.

10% decrease in Trade and other receivables
Primarily due to collections from Proscenium and 32 Sanson.

6% decrease in Real estate inventories
Primarily due to cost recognition of Proscenium and Balmori Suites.

6% increase in Advances to contractors
Primarily due to advances made for projects 8 Benitez, Mactan, Balmori Suites and Nara.

15% increase in Other Current Assets
Due to payment of prepaid taxes and commissions

14% increase in Contract assets
Primarily due to revenue recognition from new sales and project accomplishments.

24% decrease in Other Noncurrent Assets
Due to collection of other receivables from JV partners

7% decrease in interest-bearing loans and borrowings
Due to payments made for first half of 2022.

5% increase in Deferred Tax Liabilities
Due higher income recognition from Rockwell South & Arton.

17% increase in Pension Liability
Due to accrual of retirement expense for the first half of the year.

15% increase in Deposit and Other Liabilities
Due to collection from pre-selling and excess collections over recognized receivables from Mactan Villa.

10% decrease in Non-controlling interests
Due to subsidiary’s preferred shares redemption offset by share in net income of minority shareholders.

Key Performance Indicators

As indicated For the three months ended June 30
  2022 2021
ROA (*) 4.6% 5.0%
ROE (*) 11.1% 12.2%
  As of June 30, 2022 As of June 30, 2021
Current ratio (x) 3.50 3.30
Debt to equity ratio (x) 0.92 0.94
Net debt to equity Ratio (x) 0.84 0.85
Asset to equity ratio (x) 2.39 2.44
Interest coverage ratio (x) 6.16 3.57


Notes:
(1) ROA [Net Income/Average Total Assets]
(2) ROE [Net Income/ Average Total Equity]
(3) Current ratio [Current assets/Current liabilities]
(4) Debt to equity ratio [Total interest bearing debt / Total Equity]
(5) Net debt to equity ratio [(Total Interest bearing debt)-(Cash and cash equivalents) / Total Equity]
(6) Asset to equity ratio [Total Assets/Total Equity]
(7) Interest coverage ratio [EBITDA/Interest Payments]
* ROA and ROE are annualized figures

ROA and ROE are lower vs 2021 at 4.6% and 5.0% mainly from 5% lower consolidated net income. Last year’s net income includes impact of CREATE adjustment amounting to Php300 million.

Current ratio improved to 3.50x from 3.30x yearend due to lower current portion of loans payable.

Debt to equity ratio slightly decreased to 0.92x from 0.94x. Net debt to equity ratio decrease to 0.84x from 0.85x, due to net repayment of loans and lower cash balance as of June 2022.

Asset to equity ratio is slightly lower at 2.39x vs 2.44x last year due higher increase in equity than total assets.