AGM 2023

May 12, 2023

Good morning, ladies and gentlemen. Thank you for joining this meeting. May I request the corporate secretary to please certify the sending of notices to the shareholders and to the existence of a quorum for this meeting? Mr. Chairman, I hereby certify that notice of this meeting had been sent to the shareholders of record as of April fourth, 2023, via the following methods. First, by publication in the Manila Standard and BusinessWorld for two consecutive days in both online and print formats. Second, by posting on the website of the corporation. Lastly, by disclosure to the Philippine Stock Exchange. Thus, the shareholders have been notified of this meeting in compliance with applicable rules and regulations. I hereby certify that there are present in this meeting, via remote communication or by proxy, shareholders entitled to vote representing 86.24% of the corporation's total outstanding shares, and that this meeting is therefore competent to transact the business provided for in the agenda. A quorum is present, Mr. Chairman. There being a quorum, the annual meeting of the shareholders of Robinsons Land Corporation is hereby called to order. May I request the corporate secretary to share with us the rules and procedures for this meeting? The rules and procedures are set forth in the definitive information statement and in the explanation of agenda items integrated into the notice of this meeting. All tabulation results for this meeting are subject to the validation by SyCip Gorres Velayo & Co., and the final voting results will be reflected in the minutes of today's meeting. For the information of the shareholders who are with us now during this broadcast, the corporation has requested shareholders to send their questions or comments by email. Questions which were received by May fourth, 2023, have been collated and selected questions will be answered later on. The corporation will reply to the questions and comments not taken up during this meeting through email. Let us now proceed to the next item on the agenda, the approval of the minutes of the 2022 annual meeting of the shareholders. May I call on the corporate secretary to present the results of voting for this agenda item. Mr. Chairman, copies of the minutes have been distributed to the shareholders by providing the link to the said minutes in the information statement and by showing a QR code on the screen prior to the meeting. The minutes have been approved as submitted by votes representing 86.24% of the total outstanding shares of the corporation. Thank you. The minutes are hereby approved as presented. Moving on to the next item on the agenda. May I now call on Mr. Frederick D. Go, President and Chief Executive Officer of the corporation, to present his report together with the audited financial statements for the year ended December 31, 2022. Mr. President. A pleasant day to the distinguished members of our board and fellow shareholders. 2022 was a record year for Robinsons Land Corporation as we exceeded pre-pandemic earnings and posted our highest net income yet. With the global pandemic behind us, I am pleased to report RLC's financial and operational performance for calendar year 2022, our sustainability initiatives, and growth plans. We successfully ended 2022 with a strong portfolio consisting of 86 residential buildings, 53 lifestyle centers, 40 housing subdivisions, 31 offices, 25 hotels, 28 mixed-use developments, eight work.able centers, and seven industrial facilities. Revenues and profit reached their highest levels in the company's history. RLC generated consolidated revenues of PHP 45.5 billion, up 25%. This is attributable to the significant recovery of our investment portfolio, improved revenue recognition of residential sales, and the continued success of the Chengdu Ban Bian Jie project in China. EBITDA rose 29% to PHP 19.35 billion, pushing overall EBIT up by 45% to PHP 14.11 billion. Net income attributable to parent registered at PHP 9.75 billion, 21% higher than last year and 12% better than 2019. Our investment portfolio accounted for 51% of revenues, 70% of EBITDA, 60% of EBIT, and 50% of net income. The balance came from our development portfolio. Our company sustained a solid and healthy financial position with total assets of PHP 223 billion. This includes cash of PHP 8.28 billion and shareholders' equity of PHP 135 billion, which is net of PHP 2.5 billion in treasury shares from RLC's share buyback program. Total debt is PHP 51.16 billion for a net gearing ratio of 0.33 times as of December 2022, one of the lowest among property industries listed in the market. Earnings per share registered at PHP 1.91, 23% better than 2021 and 14% higher than 2019. Book value, meanwhile, is at PHP 25.59 per share, higher than the current market share price. Moving on to the financial and operational highlights of each of our business units. Business conditions improved in most of 2022. Robinsons Malls increased total revenues by 58% to PHP 13.03 billion to account for 29% of the company's consolidated revenues. Rental revenues jumped 74% following the lifting of tenant concessions, resurgence of foot traffic in stores, and improved consumer spending during the holiday season. EBITDA escalated by 70% to PHP 6.59 billion, while EBIT ballooned by 1,484% to PHP 3.02 billion year-on-year. Robinsons Malls has steadily grown its presence in the country despite knocking down Robinsons Forum for a redevelopment of a much bigger retail commercial space. In the first half, we added another 21,000 sq m of GLA with the expansion of Robinsons Place Antipolo. In the fourth quarter, we opened Robinsons Gapan in Nueva Ecija, our second-largest mall in the province with 31,000 sq m of GLA. Robinsons Malls ended the year with a system-wide lease rate of 91% on 1.6 million sq m of GLA. With the global opening of the economy, Robinsons Hotels and Resorts, or RHR, grew revenues by 94% to PHP 2.33 billion in 2022. Higher average room rates increased F&B sales, and the resurgence of MICE events positioned the business for a strong recovery. Notwithstanding pre-operating expenses from new hotel developments, EBITDA climbed 13% to PHP 277 million, while depreciation and pre-operating expenses from new hotels dragged EBIT to a loss of PHP 225 million. To further establish RLC as the largest hotel developer and operator in the Philippines with the biggest portfolio of hospitality developments, RHR completed four new hotels, Go Hotels Plus Naga, Go Hotels Plus Tuguegarao, Summit Hotel Naga, and Fili Hotel in NUSTAR, Cebu. Fili Hotel is the Philippines' first homegrown authentic five-star luxury hotel and the most exciting hotel project in the country. Located in the world-class NUSTAR Resort, Fili brings together the finest hotel offerings with modern Filipino elements featuring stunning views of the sea, mountain, and city skylines. Fili prides itself in its signature brand of Filipino hospitality, expressed in genuine care and efficient service. RHR ended 2022 with over 3,800 keys across 25 company-owned hotel and leisure properties. We also have four Go Hotels with 800 rooms under franchise agreements. Meanwhile, Robinsons Offices sustained its growth on the back of rental escalations and stable occupancy rates. Revenues climbed by 9% versus last year to close at PHP 7.07 billion, while EBITDA improved by 10% to PHP 6.2 billion. EBIT increased by 11% to PHP 5.27 billion on lower depreciation. Robinsons Offices completed Cybergate Galleria Cebu, Cybergate Iloilo 2, and Cybergate Bacolod 2. The addition of these three new office developments brings RLC's office portfolio to 741,000 sq m of gross leasable space. On a 90% system-wide lease percentage. Our company likewise strengthened its presence in the growing flexible workspace segment with the opening of two new build-to-suit work.able centers in Cyber Omega and GigaTower. Robinsons Offices now has a total of eight work.able sites with a total of around 2,100 seats. Robinsons Logistics and Industrial Facilities, or RLX, continues to make strides in its pursuit of becoming a market leader in the industrial and logistics sector. Industrial leasing revenues accelerated by 57% to PHP 555 million, driven by the full year contribution of new industrial facilities. EBITDA surged by 48% to end at PHP 479 million, and EBIT rose by 41% to end at PHP 351 million. For our destination estates, we continue to make significant strides in our three destination estates. We are pleased to report that Bridgetowne is the host for the world's biggest obstacle facility. It features 25 various obstacles on a 6,000 sq m space. In addition, we have completed the interchange exit in Monterrazas, near Clark Freeport Zone, fully leased out the retail spaces in Sierra Valley, and launched several residential projects. We recognized revenues of PHP 646 million from a portion of deferred gain on sale of land to joint venture entities. EBITDA and EBIT settled at PHP 392 million and PHP 388 million, respectively. RLC Residences and Robinsons Homes had an outstanding year as net sales take-up from organic projects more than doubled in the fourth quarter, while full-year net presales improved by 57%. Meanwhile, net presales of joint venture projects Aurelia, Velaris, and Sonora for the full year grew 58% to PHP 8.99 billion. The company's residential brands posted combined realized revenues of PHP 9.1 billion to grow by 44%. This remarkable performance is attributable to increased payment collections from RLC's home unit buyers, timely completion of residential projects, and significant contributions from joint venture equity earnings. EBITDA soared by 54% to PHP 3.51 billion, while EBIT escalated by 60% to PHP 3.41 billion. In 2022, we launched five new residential projects, namely AmiSa Private Residences Tower D in Cebu, Sierra Valley Gardens 3 in Rizal, Woodsville Crest in Parañaque, SYNC - N Tower in Pasig, and Springdale Baliwag in Bulacan. With the strong performance in 2022, RLC continues to make significant strides with its JV projects, registering healthy sales take-up across all three projects. Just a little over three years from launch date, Aurelia is already 72% sold, Velaris at 65%, and Sonora at 45%. RLC recognized revenues of PHP 12.78 billion from phase two of its Chengdu Ban Bian Jie project in China, exceeding revenues recognized from phase one in 2021 by 17%. Furthermore, the company received $25 million in dividends following the repatriation of 99.78% of our invested capital. Our company spent a total of PHP 25.86 billion in capital expenditures for the development of malls, offices, hotels, and industrial facilities, construction of residential projects, land acquisitions, and for new investments of its domestic operations. In response to the increasing role of technology on consumer lifestyles, we also focused on scaling our digital capabilities. MallDash, a multi-store online platform launched in 2021, is slated to introduce its mobile application by the first half of this year. In addition, Robinsons Malls continues to improve our RMalls+ app to create seamless online-to-offline customer journeys. In pursuit of improving customer experience, RLC Residences is also working on the development of myRLC Home super app, the first all-in-one mobile application for residential communities. Slated for its official launch in the middle of 2023, the platform seeks to deliver convenience and seamless service to property buyers from purchase to move in. We also launched the RHR mobile app to create better end-to-end guest hotel experiences. Our robust financial results allowed us to invest in creating more value for all our stakeholders. As a result, we are integrating our ESG programs further and faster to help shape a better future. RLC continues to be the market leader in solar energy usage. It ended the year with rooftop solar panel installations in 28 Robinsons Malls with a total capacity of about 31 MW. This translates to 28 million kWh of clean energy, over 20,000 metric tons of carbon dioxide avoided, and more than 337,000 trees planted. In addition, all Robinsons Malls are designed with a system for wastewater conservation and recovery. 29 of our malls have rainwater collection systems, and 15 malls use recycled water for non-potable uses. Aside from this, Robinsons Malls and Offices have installed water-efficient toilet fixtures to reduce water consumption. The company also continues to invest in sustainable developments that adhere to international green building standards. As a testament to this, Robinsons Giga Tower in the Bridgetowne Destination Estate received a LEED Gold certification. While Robinsons Cyberscape Gamma in Ortigas Center became the Philippines' first EDGE-certified REIT building. RLC also spearheads other community recycling efforts, including the Weekend Recycling Market, Bottles-to-Soil program, and the Minimize Waste, Maximize Space decluttering program. We also strive to give back to the communities where we operate in. Through our Robinsons Land Foundation, we have reached out to over 33,000 people in the calamity-stricken communities of Ormoc, Tacloban, and Cebu, among many others. We likewise continue to assist several public schools through our Brigada Eskwela program. Moreover, we have a longstanding commitment to good corporate governance and stewardship. We have adopted an anti-bribery and anti-corruption policy to uphold appropriate ethical and responsible business conduct. Moreover, RLC has duly complied with the registration process of the Anti-Money Laundering Council pursuant to the Anti-Money Laundering Act. RLC received a Golden Arrow Award from the ASEAN Corporate Governance Scorecard organization. This is another affirmation that RLC is at the forefront of promoting transparency, accountability, and ethical business practices. On the screen are some photos of our ESG efforts. After almost three years of navigating a global health crisis, RLC forges ahead with confidence and optimism. In 2023, we will continue to invest in our diversified portfolio, expanding the breadth of our products and introducing customer-driven innovations to deliver sustainable value in an ever-changing environment. Robinsons Malls is poised to enhance its portfolio and elevate the shopping experience with the completion of Opus Mall in Bridgetowne. Opus is a metropolitan high-end lifestyle center that will house a wide selection of international retail brands. Upon completion, the Opus Mall will increase total GLA by 3% to 1.66 million sq m. Robinsons Offices, on the other hand, will complete GBF Tower in 2023. This state-of-the-art Grade A office building will cater to both traditional and multinational corporations in addition to BPO companies. Spanning across 52,000 sq m of GLA, GBF Tower 1 will feature world-class engineering and architectural designs and sustainable green building components. With the resurgence of international travel and tourism, Robinsons Hotels and Resorts is expected to accelerate growth across its well-diversified brands. The company will cater to the anticipated surge in demand with the launch of Westin Manila Sonata Place Hotel, RLC's fourth international branded hotel, and the opening of remaining rooms in Go Hotels Plus Tuguegarao and Fili Hotel at NUSTAR. These will increase room count by 18% to over 4,200 keys. Meanwhile, RLX aims to become the fastest-growing logistics facility provider in the country with the addition of warehouses in Calamba, Laguna, and Cainta, Rizal. We will also continue to make substantial progress in the development of our landmark destination estates. The 30-hectare Bridgetowne in Pasig in Quezon City, the 18-hectare Sierra Valley in Cainta and Taytay, and the 200-hectare Montclair in Pampanga. These master-planned integrated developments will espouse the live, work, play, inspire lifestyle. As we have completed the deployment of proceeds from the IPO of RL Commercial REIT, Inc., we earmarked approximately PHP 20 billion for CapEx in 2023, which will be funded through internally generated cash from operations as well as borrowings. Before we end, we are honored to share that RLC received several recognitions, including the coveted Best Developer of the Year award and nine other accolades at the 10th PropertyGuru Philippines Property Awards. This is a testament to the collective teamwork of our people at RLC and our unfaltering commitment to deliver a high level of value and service to the industry. Finally, we are happy to announce that the board has approved a regular cash dividend of PHP 2.6 billion, equivalent to PHP 0.52 per share. This is up 4% versus last year on a per-share basis. This translates to a payout ratio of 27%, exceeding the minimum ratio of 20% of the recurring income of the preceding year per our dividend policy. As we take on the road ahead from a position of strength, we would like to express our deepest gratitude to our board for their ongoing guidance and encouragement. We are also grateful to our shareholders, business partners, patrons, customers, and the communities we serve for their continued trust and support. Moreover, we would like to thank our employees for their invaluable contribution to the results and progress we have achieved. RLC looks forward to the journey ahead. We will remain steadfast in our commitment to create shared success for all our stakeholders. [Foreign language: Maraming salamat po.] Thank you. May I call on the corporate secretary to present the results of the voting for the approval of the audited financial statements for the preceding fiscal year? Mr. Chairman, we are pleased to report that shareholders representing 86.17% of the total outstanding shares of the corporation have approved the audited financial statements of the corporation for the preceding fiscal year as presented. The report as presented is hereby also duly noted. The report of the president is duly noted, and the audited financial statements for the preceding fiscal year are hereby approved as presented. We now proceed to the election of the members of the board of directors. May I request the corporate secretary to read the names of the incumbent members of the board of directors? Mr. Chairman, the incumbent members of the board of directors are Mr. James L. Go, Mr. Lance Y. Gokongwei, Mr. Frederick D. Go, Ms. Robina Gokongwei Pe, Mr. Patrick Henry C. Go, Mr. Johnson Robert G. Go Jr. The independent directors are Mr. Roberto F. De Ocampo, Mr. Omar Byron T. Vier, and Mr. Bienvenido S. Bautista. Thank you. May we now have the list of nominees for election to the board of directors and the voting results? Mr. Chairman, in accordance with the nomination process stated in the bylaws of the corporation, the following have been nominated as members of the board of directors: Mr. James L. Go, Mr. Lance Y. Gokongwei, Mr. Frederick D. Go, Ms. Robina Gokongwei Pe, Mr. Patrick Henry C. Go, Mr. Johnson Robert G. Go Jr. As independent directors, Mr. Vivencio V. Dizon, Mr. Omar Byron T. Mier, and Mr. Bienvenido S. Bautista. There being no other nominations, the affirmative votes in favor of those nominated have been tabulated, and the following are hereby declared as the duly elected members of the board of directors of the corporation for the ensuing year, until their successors shall have been elected and qualified. Mr. James L. Go, Mr. Lance Y. Gokongwei, Mr. Frederick D. Go, Ms. Robina Gokongwei Pe, Mr. Patrick Henry C. Go, Mr. Johnson Robert G. Go Jr. As independent directors, Mr. Vivencio V. Dizon, Mr. Omar Byron T. Vier, and Mr. Bienvenido S. Bautista. Let us move on to the next item on the agenda, which is the appointment of the external auditor of the corporation. May I call on the corporate secretary to present the results of voting for this agenda item? Mr. Chairman, the accounting firm of SyCip Gorres Velayo & Co. has been nominated as the external auditor of the corporation for the fiscal year 2023. After tabulation of the votes, the appointment of SyCip Gorres Velayo & Co. as external auditor of the corporation has been approved by the shareholders representing 81.86% of the total outstanding shares of the corporation. Thank you. The accounting firm of SyCip Gorres Velayo & Co. is hereby appointed as the external auditor of the corporation for the fiscal year 2023. Let us proceed to the next item on the agenda, which is the ratification of the acts of the board of directors, its committees, officers, and the management of the corporation. May I call on the corporate secretary to present the results of the voting for this agenda item? Mr. Chairman, the list of acts for ratification of the shareholders are shown right now on the screen. Copies of the said list have also been distributed to the shareholders present by showing the links and QR code to the said list on the screen prior to the meeting. After tabulation of the votes, we are pleased to report that shareholders representing 86.16% of the total outstanding shares of the corporation have confirmed and ratified the acts of the board of directors and its committees, officers of the management of the corporation, for the period beginning from the last annual shareholders meeting up to the current shareholders meeting. As duly recorded in the corporate books and records of the corporation. Thank you. The acts of the board of directors, its committees, officers, and management of the corporation for the period beginning from the last annual meeting of the shareholders up to the current meeting of the shareholders, as duly recorded in the books and records of the corporation, are hereby confirmed and ratified. We will now respond to questions which were earlier submitted via email. The questions will be answered by Mr. Frederick D. Go, President and Chief Executive Officer. Now that Robinsons Land Corporation has surpassed pre-pandemic earnings, what can we expect from the company in the coming years in terms of earnings growth? We see huge potential in our malls as it has surpassed the profitability levels of pre-pandemic times. We also like what we see in our residential division, which has been growing tremendously and are at near pre-sales record amounts. Moreover, our residential joint venture projects are expected to start contributing significantly this year. The office businesses are expected to sustain its growth, while our hotels and resorts business is nicely recovering with the resurgence of travel and the return of MICE and large-scale events. Meanwhile, at a strategic corporate level, we will closely monitor REIT opportunities for our malls and our logistics businesses. Is the company starting to feel the impact of higher interest rates on residential demand? What are RLC's initiatives to mitigate such? Not at the moment, as we continue to implement price increases and generate good pre-sales numbers. Moreover, we still enjoy pretty good gross profit margins from our sales. Because of the unique situation in the Philippines in terms of how pre-sales payments are structured as well as how home loans are priced, there is no significant impact when interest rates move. Thank you. Are there any other matters to be taken up for consideration of the shareholders? There are none, Mr. Chairman. This ends the 2023 annual shareholders meeting of Robinsons Land Corporation. A link where a replay of this meeting may be viewed shall be made available at the website of the corporation. Thank you very much for joining us.