Industry: Property
Listing Date: February 27, 1978

Financial Highlights

Financial performance summary and key ratios1,2,3,4

IRC Properties, Inc. (IRC or ” the company”) is into in the real estate development business after having shifted away from its oil exploration activities. Concentration of IRC real estate development projects is in Binangonan, Rizal and currently has 3 major projects the Sunshine Fiesta, Fiesta Casitas and Casa Aurora. As of September 2017, status of the projects is presented in the table below:5,6

IRC’s total revenue components from the last 3 years7

Total income for the year 2016 increased by Php 135.1 million or 150.65% compared to same period of 2015 due to increase in sales and increase in fair value gain on investment property. Appraisal of Binangonan properties conducted by an independent appraiser valued the property (undeveloped lots) at Php 1,100/sqm as of April 1, 2017 (2015- Php 1,000/sqm.). The appraisal resulted in a fair value gain of Php 98.8 million for 2016 as compared to Php 65 million in 2015.

Breakdown of IRC’s Sales on Real Estate for the year 20168

IRC’s total sales for the year ended 2016 amounted to Php 122,063,855 net of Php 411,145 sales discount. The company sold 107 units from Casas Aurora and 6 from Fiesta Casitas with total contract price amounting to Php 92,987,900 and Php 4,519,600, respectively. Aside from the unit sales, the company sold a parcel of land to Amaia Land Corp. with a total contract price amounting to Php 24,964,500.

IRC has the following corporate structure:9

IRC’s ultimate parent company is also the publicly listed Mabuhay Holdings Corporation. Mabuhay owns 28.44% direct and indirect (through T&M Holdings) ownership to IRC making it the 2nd largest shareholder of the said company.

IRC was able to acquire and sell real estate properties through its wholly owned subsidiary, the Interport  Development Corporations.

The Company’s management team are as follows:

Table of Ownership10

Table of directors and executive officers11

Highlights of IRC’s BOD professional and business experience are:12

– Seven (7) of its members has international education
– Four (4) has post graduate degree
– Two (2) are lawyers
– None of the members was involved in any legal or criminal proceedings for the last 5 years

IRC’s board of director’s members are composed of the parent, subsidiaries, associates and joint ventures representatives of their respective companies, as such probable conflict of interest may arise. Below is the table that illustrates the interlocking holdings or ownership of the IRC’s directors on the other companies.

Five (5) directors are also directors of Mabuhay Holding Corporations and 3 more other directors are also holding directorship position in other publicly-listed companies, one of which is listed the Main Board of the Stock Exchange of Hong Kong Limited (the “SEHK”) and The Tokyo Stock Exchange.13

Business considerations/opportunities:

  • The 2,200-hectare property acquired in 1978 situated in Binangonan, Rizal has only an estimated recoverable land of 500 hectares at December 31, 2016 (2015 – 480 hectares). This is due to several factors, including the recognition of Supreme Court’s on the superior rights of the bonafide occupants as well as potential challenges in clearing and re-titling of this large area of land.15

The 20-hectares increase in recoverable land provide a 98.85 million fair value gain to the company which eventually translates into an ending balance on the year 2016 of Php 2.35 billion pesos.16

  • On December 21, 2016, the company launched its newest project, Casas Bauhinia, located at Mahabang Parang, Municipality of Binangonan, Province of Rizal. It is estimated to be 36 kms. from Ortigas Center, Pasig City (40kms. from Makati City) and takes about 1-1.5 hours’ drive along Manila East road. The development is a 4-hectare economic housing subdivision with provision for basic facilities and amenities, such as multipurpose hall, parks and playground.17

Status cannot be determined for as of 3rd quarter report for 2017 of IRC, no further update was mentioned on this subject.

  • The Group had also deferred its development of the Eastridge project (Trocadero Residences), a mix of condominium and townhouses within a 134-hectare property in its Binangonan property adjacent to Thunderbird Resort and Casino and the 18-hole Eastridge Golf Club. As of 31st of December 2016, the company is talking to a possible investor (Japanese group) to develop the condominium project.18

References:

1. IRC SEC Form 17-Q for the 1st quarter pages 5-9
2. IRC SEC Form 17-Q for the 2nd quarter pages 5-9
3. IRC SEC Form 17-Q for the 3rd quarter pages 5-9
4. IRC 2015 and 2016 annual report
5. 2017 annual stockholder’s meeting management report page 19-21
6. IRC Properties Inc. Company website “Projects” tab. http://www.ircproperties.com/index.php
7. IRC 2016 AFS Part1 page 10
8. 2017 annual stockholder’s meeting management report page 23
9. 2016 AFS Part 3 page 18
10. IRC 2016 annual report Part 2 page 10
11. IRC 2016 Corporate Governance Report pages 4 and 7
12. 2017 annual stockholder’s meeting management report page 8-11
13. IRC 2016 Corporate Governance Report page 6
14. 2017 annual stockholder’s meeting management report page 32
15. 2017 annual stockholder’s meeting management report page 73
16. 2017 annual stockholder’s meeting management report page 183
17. IRC 2016 Annual report pages 6 and 13
18. 2017 annual stockholder’s meeting management report page 191

 

 

 

 

 

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