DMW revenue base increases 44% as land sales drive growth

DM Wenceslao and Associates, Inc. (DMW) on Thursday reported a 43.5% increase in its core net income from last year to 1.88 billion pesos, thanks to its resilient rental business, improved residential gross margin and land sale transactions completed in the fourth quarter.

“We remain in an evolving landscape which, while filled with opportunity, is also filled with potential re-emerging risks as well as new risks, including geopolitical conflict. In precarious circumstances, we remain true to our two-pronged approach rooted in agility,” Chief Executive Delfin Angelo C. Wenceslao said in a statement.

Last year’s financial performance excludes the after-tax impact of one-time gains, which in 2020 amounted to 1 billion pesos, related to the termination of a joint venture agreement as well as the adjustment of the tax charge in 2021 due to business recovery and taxation. Business Incentives Act or CREATE Act.

“We remain aware of the risks by maintaining a better than performing balance sheet, implementing a business continuity plan and prioritizing the well-being of stakeholders while remaining hand in hand on track with our goals. expansion to seize opportunities beyond current risks,” said Wenceslao.

In the company disclosure, DMW said its base net income was also 12% higher than the pre-pandemic figure of 1.7 billion pesos in 2019.

“Note that DMW recorded profits – large land sales amounting to 787.6 million pesos and 935.9 million pesos in 2021 and 2019, respectively. As such, the baseline benefits of these exercises are closely comparable,” he added.

Its recurring revenue, consisting of rent from land, buildings and other income, improved 2% to 1.99 billion pesos, accounting for 58% of total revenue.

Meanwhile, residential income fell 18% by P615 million year-on-year, due to the timing of revenue recognition.

“Pixel Residences was already fully refurbished in 2021 and most of the residential revenue bookings for the year were attributable to MidPark Towers,” DMW said.

Despite the decline in income, residential gross profit increased by 14% to P388 million due to higher gross profit margin of 63% in 2021 compared to 45% in 2020.

The improvement in the margin results from the significantly higher selling price per square meter of the MidPark Towers compared to that of the Pixel Residences.

DMW completed a 787.6 million peso land sale transaction, which it said increased its revenue and strengthened its balance sheet.

In the fourth quarter, DMW reported a 79% increase in commercial gross leasable area (GLA) from 90,712 square meters (m²) to 162,351 square meters (m²) at the end of 2021. in 2020.

In the fourth quarter, the 8912 Asean Ave. building, its largest office development, and the 58 Jupiter St. mixed-use building were both completed.

“Located along Jupiter Street in Makati City, 58 Jupiter is our first commercial building constructed outside of Aseana, advancing our diversification efforts,” DMW said.

Landers also signed a 25-year lease for a 15,064 m² plot. plot of land in Aseana City. DMW said the membership shopping channel, with its many subscribers, is an expected draw.

“These developments should contribute significantly to DMW’s recurring earnings going forward,” the company added.

On the stock market, DMW shares were unchanged at P6.86 apiece on Thursday. — Luisa Maria Jacinta C. Jocson