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Global-Estate Resorts swings to profit on improved sales

Posted on January 31, 2012 09:06:00 PM [ BusinessWorld Online ]

LEISURE DEVELOPMENT firm Global-Estate Resorts, Inc. (GERI) swung to profit for the fiscal year ending September 2011 versus year-ago levels due to lower operating costs and higher total revenues for the period, a filing with the Philippine Stock Exchange yesterday showed.

Global-Estate Resorts booked a profit of P19.2 million for 2011, turning around a net loss of P153.3 million notched in 2010.

Consolidated total revenues -- comprised of real estate sales, rental income, service income, and other income -- rose by 12% to P867.50 million from P776.26 million, year-on-year.

A bulk of the company’s revenues were derived from realized gross profit on prior years’ real estate sales, which surged by nearly nine times to P38.99 million last year from only P3.95 million two years ago, the disclosure read.

Global-Estate Resorts’ registered sales came from condominium units in Quezon City; residential lots in Lipa, Batangas; San Pablo, Laguna; Naga City; Iloilo City, and commercial lots in Carmona, Cavite.

Performance was also lifted by income realized from the assignment of development rights, which totaled P153.867 million.

Total expenses, meanwhile, shrank by 16% to P802.54 million in 2011 from P957.06 million in 2010, mainly due to a decline in finance costs and operating expenses, even as real estate costs grew by 10.08% to P142.74 million versus P129.29 million the year before.

“The Group’s stable financial position has improved further with the Php5.0 billion subscription by Alliance Global Group, Inc.,” the report stated further.

“Cash and cash equivalents increased by 2,078% to Php1.78 billion as a result of the subscription received...” it stated.

Back in December 2010, the resort developer had signed a subscription agreement with Alliance Global, paving the way for the investor to subscribe to 5 billion common shares at a subscription price of P1 per share or a total of P5 billion.

This was approved by the Securities and Exchange Commission two weeks ago.

GERI, formerly Fil-Estate Land, Inc. was incorporated in 1994 to consolidate the real estate interests of the Fil-Estate Group of Companies.

Its subsidiaries include Megaworld Global-Estate, Inc. and Fiel Estate Realty Corp., among others.

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