DoubleDragon 2017 full year net profit jumps to P2.53B

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Monday, March 5, 2018
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DOUBLEDRAGON Properties Corp.’s consolidated net income figures for 2017 reached P2.53 billion, an increase of 71.8 percent from its net income of P1.47 billion in 2016.

More importantly, DoubleDragon’s recurring revenue rose 3.76 times to P1.31 billion in 2017 compared to only P347.6 million the prior year primarily from its rental revenues which grew 238.4 percent to P909.2 million in 2017 compared to only P268.7 million the prior year.

Recurring revenue now accounts for 19.8 percent of the company’s total revenues as it shifts towards its goal of becoming a 90-percent recurring revenue company by 2020.

In just three years, DoubleDragon completed 332,500 square meters of leasable space. The company expects that over 50 percent of its target leasable portfolio will already be online and should start to contribute substantially by 2019.

The first 25 CityMalls are averaging 95.3 percent leased out. DoubleDragon expects a total of 50 completed CityMalls by the end of 2018.

Total assets of the company rose 28.5 percent year-on-year to P64.3 billion as it completes more of its projects which have driven a 42.7 percent increase in its Investment Properties (which stood at P46.4 billion as of the end of 2017).

Total Equity likewise increased by 10.4 percent to P22.3 billion by the end of 2017 from P20.2 billion in the prior year, allowing the company to maintain a relatively low Gross Debt-to-Equity ratio of 1.48x versus its debt covenant cap of 2.33x. This went hand in hand with a vast improvement in the company’s Debt Service Coverage Ratio (DSCR) which stood at 1.99x in 2017 versus its debt covenant floor of 1.25x.

DSCR measures the company’s ability to service its debt, in this case the amount of its consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) versus its debt service requirements for the year.

As for its hospitality business, the group’s hotel revenues rose 404 percent year-on-year to P397.5 million versus only P78.9 million in 2016 due to the full year contribution of its hospitality subsidiary, Hotel of Asia Inc. (HOA) which was only acquired in October 2016.

HOA currently has 866 operational rooms in its portfolio across its hotel properties that averaged 74.8 percent occupancy in 2017.

DoubleDragon envisions being one of the leading hotel players in the country and is looking to increase its hotel room base to 5,000 hotel rooms by 2020 through the rollout of its homegrown brand Hotel101 and Jinjiang Inn.

The company’s most recent foray into the industrial warehousing business has also seen substantial traction, now having secured two of the eight CentralHub sites it intends to initially develop by 2020.

CentralHub Tarlac and CentralHub Iloilo, both strategically located in main industrial areas, have a combined capacity of 54,000 square meters of warehouse space once fully built.

The company will be developing these CentralHub sites in phases and is looking to have at least 100,000 square meters of leasable warehouse space contributing to its portfolio by 2020.

CentralHub will lease out standardized multi-use warehouses suited for commissaries, cold storage, manufacturing, logistic and distribution centers.

CentralHub sites will be conveniently located in industrial areas across the Philippines providing enhanced accessibility.

DoubleDragon believes the demand for industrial warehouses will grow tremendously in the near term and there is still an opportunity for DoubleDragon to become a dominant player in this industry as the available supply is currently traditional and fragmented.

“I am personally glad for the progress we have made in the past three years as it has been essential in putting together the solid building blocks that will serve as the bedrock of a company designed and built to stand the test of time,” said DoubleDragon chairman, Edgar “Injap” Sia II.

“With over 33 hectares of leasable space already built to date, we will very soon start to see substantial contribution from recurring revenue flowing into our financials. By the end of this year, we aim to have at least 60 hectares or 50 percent of our intended 2020 portfolio completed, which should be contributing on a full year basis by 2019. This will replace our temporary non-recurring revenues as we shift into becoming a recurring revenue focused company,” added DoubleDragon Chief Investment Officer, Hannah Yulo.

DoubleDragon’s four pillars of growth continues to strengthen in provincial retail leasing, office leasing, industrial leasing and hospitality which will provide the company with a diversified source of recurring revenues backed by a string of appreciating hard assets./PN
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