Property developer Global-Estate Resorts, Inc. (GERI) is cutting its capital expenditure budget by 38% this year as it delays new project launches due to the coronavirus pandemic.
“[W]e expect a 38% reduction in capital expenditures this year from P6.5 billion to P4 billion as the lockdowns, regional quarantine measures, and physical distancing rules continue to restrict the movement of materials and workers in our construction sites,” GERI President Monica T. Salomon told stockholders in a meeting Friday.
The P4-billion budget will be spent on new projects within GERI’s integrated estates and property acquisitions for future business expansion. It is also investing in digital transformation to support the changing trends and habits of consumers.
“The company will continue to observe financial discipline to ensure financial stability through prudent cash management and operational efficiency,” Ms. Salomon said.
In a statement, GERI said it will be turning over P3-billion worth of projects this year, spread across its properties in Aklan, Batangas and Iloilo.
These will be residential units and commercial lots within integrated communities Boracay Newcoast, Twin Lakes and Sta. Barbara Heights.
“The company believes that its integrated leisure estates and lifestyle communities, which make possible contained living set in the backdrop of natural environments, are sustainable and resilient models and will stand to benefit from the ongoing fundamental changes in people’s behavior and way of life,” Ms. Salomon said.
She noted when the quarantine restrictions were eased starting June, GERI saw its reservation sales jump back to pre-quarantine levels at P3.6 billion from P2.2 billion in the first quarter.
“[W]hile tourism in the country grounded to a halt, Boracay Newcoast continued to be the bestseller among our integrated estates, proof of an underlying demand for resort properties,” Ms. Salomon said. “We also saw a significant rise in residential lot sales in our projects with access to natural environments….”
GERI operates a total of eight integrated tourism developments located in Batangas, Laguna, Cavite, Las Piñas City, Boracay, Iloilo and Rizal.
In the first semester, the company’s earnings dropped 37% to P544.8 million, as it closed its hotels during the period of the strict lockdown. Its consolidated revenues declined 29% to P2.91 billion.
Shares in GERI at the stock exchange shed one centavo or 1.25% to 79 centavos each on Friday.
By Denise A. Valdez, Senior Reporter|BusinessWorld
Source: Peso Economics
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