Sta. Lucia Land, Inc.

Penthouse Building III, Sta. Lucia Mall, Marcos Highway corner Imelda Avenue, Cainta, Rizal

Financial Highlights:1

Sta. Lucia Land, Inc. (SLI) was incorporated and registered with the Philippine Securities and Exchange Commission (SEC) on December 6, 1966 under the name Zipporah Mining and Industrial Corporation to engage in mining and launched its Initial Public Offering on September 14, 1987. On December 18, 1995, the corporate name was changed to Zipporah Realty Holdings, Inc. 2

The corporate name was further changed to Sta. Lucia Land, Inc. on June 15, 2007. The primary purpose was also changed to deal, engage or otherwise acquire an interest in land or real estate development, whether in the Philippines or elsewhere, to acquire, purchase, sell, convey, encumber, lease, rent, erect, construct, alter, develop, hold, manage, operate, administer or otherwise deal in and dispose of, for itself or for others, for profit and advantage, residential, commercial, industrial, recreational, urban and other kinds of real property, such as horizontal and vertical developments on October 9, 2007. 2

SLI offers horizontal and vertical residential developments, commercial properties including malls and commercial lots, and ventured into different services encompassing housing construction services through its subsidiary, Sta. Lucia Homes, Inc., marketing services through Sta. Lucia Ventures, Inc. and sale on installment facilities being availed by SLI’s customers. SLI has long adopted the strategy of focusing on the provincial areas that are under-served by its bigger competitors whose projects have been concentrated in Metro Manila. 2

SLI has been able to establish a track record in horizontal residential developments where it derived a substantial portion of its revenues. 3

The Leasing segment consists of the investment properties of SLI and its subsidiaries that are held to generate rental income and are not occupied by SLI. The Residential development segment generates real estate sales and construction income that represents the development and selling of subdivision lots and high-rise condominium projects across the Philippines.

In 2016, real estate revenues generated P1,890 million which is 12% higher than 2015. This is due to extensive strategies in marketing, developments, project completion and financing provided in the form of bonds. Rental income in 2016 decreased by 13% compared to 2015 due to change in accounting of income from mall tenants from accrual to cash basis.4

For the nine months ended September 30, 2017, total revenues of SLI increased by P420.90 million, from P2,374.33 million for the three quarters of 2016 to P2,795.23 million for the three quarters of 2017. The real estate sales showed an increase of P267.14 million while rental income posted an increase of P65.50 million as a result of increase in volume of mall tenants on Sta. Lucia East Grand Mall and its expansion mall II Centro that opened in 2014.4

 Corporate Structure

SLI’s corporate structure is presented below: 5

Sta. Lucia Homes, Inc. (SLHI) was incorporated in 2013 with the primary purpose to construct, develop, improve, mortgage, pledge and deal with residential structure for lot buyers of SLI. On the same year, Santa Lucia Ventures Inc. (SVI) was incorporated to market, operate, manage, develop, improve, dispose, mortgage, pledge and deal with residential structure for lot buyers of SLI. 6

Shareholders7

The Company has a single class of common shares. As of December 31, 2016:

  1. 8,946,450,000 common shares were listed at the PSE
  2. SLI has a total of about 264 common shareholders

The following are the SLI’s top 5 shareholders as of December 31, 2016:

The table below sets forth each member of the Board and Executive Officers of SLI: 8

Vicente R. Santos held Executive Vice President position at Lucia Realty & Development, Inc., Valley View Realty Dev’t Corp., RS Maintenance & Services Corp., Lucia East Cinema Corp., Lucia Waterworks Corp., Rob-San East Trading Corp., East Commercial Corp., RS Night Hawk Security & Investigation Agency, Lucia East Bowling Center, Inc., Lucia East Department Store, Inc. Also, he has been the President in Acropolis North, Corporate Secretary in Lakewood Cabanatuan, and Chairman in Orchard Golf & Country Club. He held directorships in Orchard Golf & Country Club and Eagle Ridge Golf & Country Club.

Exequiel D. Robles is a Director and President in SLI. He has been the President of the following companies:

  1. Lucia Realty & Development, Inc.
  2. Lucia East Cinema Corporation
  3. Lucia East Commercial Corporation
  4. Lucia East Bowling Center, Inc.
  5. Lucia East Department Store
  6. Valley View Realty and Development Corporation
  7. RS Maintenance & Services, Inc.
  8. Rob-San East Trading Corporation
  9. RS Night Hawk Security & Investigation Agency

He also held directorships in Sta. Lucia Realty & Development, Inc., Sta. Lucia East Cinema Corporation, Sta. Lucia Waterworks Corporation, Sta. Lucia East Commercial Corporation, Sta. Lucia East Department Store, Sta.Lucia East Bowling Center, Inc., Valley View Realty Development Corporation, and RS Maintenance & Services, Inc.

Mariza R. Santos-Tan is the Treasurer and Director of SLI. She held the following positions in different companies:

  1. President, Royale Tagaytay Golf& Country Club
  2. Vice President for Sales at Sta. Lucia Realty & Development, Inc. and Valley View Realty Development, Inc.
  3. Corporate Secretary at RS Maintenance & Services Corporation, Sta. Lucia East Cinema Corporation, Sta. Lucia Waterworks Corporation, Rob-San East Trading Corporation, Sta. Lucia East Commercial Corporation; RS Night Hawk Security & Investigation Agency, Sta. Lucia East Bowling Center, Inc., Sta. Lucia East Department Store, Inc., Worlds of Fun, and Eagle Ridge Golf & Country Club
  4. Treasurer, Manila Jockey Club.

She also held directorships in Sta. Lucia Realty & Development, Inc., Valley View Realty Development, Inc., Orchard Golf & Country Club, Alta Vista Golf & Country Club, Manila Jockey Club, True Value Workshop, Consolidated Insurance Company, Unioil Resources Holdings, Inc. and Ebedev.

David M. DeLa Cruz is the Executive Vice President of SLI with 1-year term of office (2015-2016). He held the following positions in different companies:

  1. Vice President and Chief Finance Officer at Atlas Consolidated Mining and Development Corp
  2. Senior Assistant Vice President – Corporate Credit Risk Management – BDO – AC&D Corporate Partners
  3. President / CFO – Geograce Resources Phils. Inc.
  4. Vice President / Head of Sales Amsteel Securities Philippines Inc.
  5. Senior Manager – Investment Banking Deutsche Morgan Grenfell Hong Kong Limited
  6. Acting General Manager & Marketing Head – UBP Securities / Manager – Investment Banking – UBP Capital Corporation

Atty. Patricia A. O. Bunye, the corporate secretary of SLI. She held the following positions in different companies:

  1. Senior Partner at Villaraza Cruz Marcelo & Angangco
  2. Past President of Integrated Bar of the Philippines (Pasay, Parañaque, Las Piñas & Muntinlupa Chapter)
  3. Secretary at15th House of Delegates National Convention, IBP
  4. Past President at Licensing Executives Society Philippines

She also held directorships in Arromanche, Inc., Baskerville Trading Corporation, Bay Area Holdings, Inc., Belmont Equities, Inc., Foundasco Philippines, Inc., Go Home Bay Holdings, Inc., Honfeur, Inc., Kids Stuff Manufacturing, Inc., Lawphil Investments, Inc., Liberty Cap Properties, Inc., Mianstal Holdings, Inc., Quaestor Holdings, Inc., Recruitment Center Philippines, Inc., Westminster Trading Corporation, Winchester Trading Corporation, and Windermere Marketing Corporation.

Family Relationships9

Exequiel D. Robles, Antonio D. Robles, And Aurora D. Robles Are Siblings and they are first cousins with Vicente R. Santos, Mariza R. Santos-Tan, And Orestes R. Santos, who are likewise siblings.

Dividend

No dividend declared since 2016.

Long-term debt

In February 2017, SLI was authorized to avail a ten (10) year Corporate Note Facility with financial institutions, with a maximum of nineteen (19) investors for an aggregate amount of P3 Billion and with an over allotment option of P2 Billion.10

On 22 June 2017, SLI exercised its Early Redemption Option for the Series A Unsecured Fixed-Rate Peso Bonds in the amount of P2,000,000,000 at an Early Redemption Price of 101%. This was issued on December 22, 2015 used by SLI to fully refinance existing secured loans, for capital expenditure requirements, and/or general corporate purposes. 11,12

As of the 3rd quarter of 2017, SLI’s total liabilities increased by P4,500.25 million which is 42% higher than the total liabilities as of December 31, 2016. Significant portion of the increase is due to newly availed loans in the current period. 13

In 2016, the SLI’s total liabilities is composed of 36.9% long-term debt. The total liabilities increased f by 23% from P8,671 million to P10,659 million due to new short-term loans drawn during 2016 and still unpaid as of December of the same year. As of 2016, SLI maintained the debt covenants to maintain a maximum of debt-to-equity ratio of 1.50:1:00, a minimum current ratio of 1.00:1.00 and a minimum debt service coverage ratio of 1.25.14

On January 8, 2018, SLI was authorized to negotiate and avail of a seven (7) year Corporate Note Facility with financial institutions, with a maximum of nineteen (19) investors, for an aggregate amount of P3 Billion and with an over allotment option of P2 Billion, for the pre-payment of existing obligations of the Corporation, the financing of project development costs, and general corporate purposes.15

Business developments

Capital expenditures16

There is a decrease of 94% in cash in 2016 than in 2015 mainly due to significant capital expenditures during 2016. Said capital expenditures is attributable to the continuous development of existing projects and acquisition of various raw lands for future expansions. Below shows the capital expenditures and revenues from 2012 to 2016.

The P3,938 million capital expenditure spent in 2016 is accounted for the continuous development of SLI’s existing residential and commercial projects. P1,464 million of the said amount is attributable for acquisition of raw lands for new residential and condominium project developments. Capital expenditures were significantly financed by the bonds publicly issued in December of 2015. In 2017, SLI plans to spend P15 billion in the next three to five years to develop its existing properties and intends to tap both the debt and equity markets. 17,18

The revenues decreased by 26% in 2013 from the revenues of 2012 but then increased until 2016, showing compound annual growth rate of 16% from 2012 to 2016.

Properties and Ongoing projects19

As of December 31, 2016, SLI has 122 land and other real properties with a total of 3,085,769 sqm presented below:

  1. 16 land properties that is 1,000,566 sqm located in Rizal represents 32.54% of the total land properties where 75% is residential;
  2. 66 land properties that is 777,324 sqm located in Batangas represents 25.99% of the total land properties where 97% is residential;
  3. 1 land property in Zamboanga purely residential is 9.35% of the total land properties;
  4. 7 land properties in Cavite that is 235,138 sqm and 7.65% of the total properties;
  5. 1 land property in Davao mixed-use for residential and commercial units that is 6.42% of the total land properties;
  6. 9 land properties in Laguna that is purely residential represents 5.04% of total land properties; and
  7. 1 property in Cabatuan for both residential and commercial units.

Residential/ Commercial are mixed-use properties for residential and commercial units. Others is composed of SLI’s land properties in Cebu, Quezon City, Bacolod, Baguio, Zambales, Pasig, Palawan, Quezon Province, Iloilo, Rizal, Pasay City, Antipolo, and Ilo-Ilo City with a total of 22 land properties that is 342,378 sqm.

The table below shows the number of SLI’s projects as of 2014, 2015 and 2016:

Three projects were completed in 2016, namely, Pueblo Del Sol Phase 2, Greenwoods Executive Phase 9E (started in 2014), and Sotogrande Tagaytay Phase 2 that are in Rizal, Pasig, and Tagaytay.

Out of the 42 ongoing projects in 2016, 11 are located in Rizal, 4 are in Davao, 4 are in Iloilo city, 4 in Quezon City, 3 in Batangas city, 3 in Laguna city, 2 are in Cavite, 2 are in Nueva Ecija, 2 in Pasig, and 1 project each in Bulacan, Cebu, Dagupan, Palawan, Pangasinan, Tagaytay, and Tarlac. Most of the on-going projects are residential units under pre-selling stage being developed together with various joint ventures.

One of the 11 on-going pojects in Rizal is the Sta. Lucia Residenze – Santorini located in Cainta launched in February 2016 and is currently pre-selling. Santorini Tower is the second of the five mediterranean-inspired residential towers within the cosmopolitan complex of Sta. Lucia Residenze, it followed the first tower at the complex called Monte Carlo. The Santorini tower consists of 25 floors and 278 units, with mall, condotel and residential condominiums.20,21

Another project in Rizal is part of SLRDI’s capital infusion to SLI in 2007 which is called the Rizal Technopark. It is a commercial property in Taytay that sits on a 25,112 sq. m. area, with 34 lots for sale. SLI entered into various joint ventures in 2013 and 2014 for the development of the said project, involving parcels of land owned by Royal Homes Realty & Development Corporation, and JFG Construction and Development Services with an aggregate area of 10,100 square meters.22

The rest of the on-going projects in Rizal as of December 2016 are the Greenland Newtown Phase 2a, Monte Verde Royale Expansion, Green Peak Heights, Villa Verde East Expansion, Summerhills Phase 4, Greenland Cainta Phase 9C and 3B, Nottingham Townhouse Villas, Vermont Park Executive and Metrolis East Binangonan Expansion.

Future projects

In the special meeting of BOD held last January 8 and February 7, 2018, the following joint ventures and land acquisitions were approved as listed below: 10,11

SLI poured in an estimated amount of P500 million to develop the 67-hectare La Alegria in Silay City, Negros Occidental launched on August 2017. La Alegria is expected to be completed in one and a half years and projected to be fully sold in three years. 23 La Alegria is the second subdivision project of SLI in Negros Occidental after Manville Royale in Bacolod City.24

Recent Involvements25

In October 2017, SLI has been announced as a finalist in the Asia CEO Awards. The Asia CEO Awards recognize extraordinary leaders who have demonstrated outstanding achievement for their organizations and contributions to others. SLI has been selected by an esteemed list of judges in 3 categories namely:

  1. Heart for OFWs Company of the Year 2017- given to private and public corporations that implement specific programs that produce a positive and significant effect to Filipino overseas workers and their families (SLI has been nominated as a finalist for a second consecutive year in a row)
  2. Executive Leadership Team of the Year 2017 – given to any profit-making organizations executive management team that achieved important success while overseeing a business enterprise either within Philippines or outside of it.
  3. Global Filipino Executive of the Year 2017 – given to a Filipino citizen or person of Filipino descent who achieved recognizable success in Philippines or outside of it.

 Key considerations

  • SLI adopted the strategy of focusing its projects on provincial areas than in Metro Manila where its bigger competitors concentrated its projects.
  • There are 3 projects completed in 2016, namely Pueblo Del Sol Phase 2, Greenwoods Executive Phase 9E, Sotogrande Tagaytay Phase 2 located in Rizal, Pasig, and Tagaytay, respectively.
  • 94% decrease in cash of SLI in 2016 than in 2015 is due to significant capital expenditures during 2016 attributable to the continuous development of existing projects.
  • SLI plans to spend P15 billion in the next three to five years to develop its existing properties and intends to tap both the debt and equity markets. 17,18
  • Since 2009, SLI entered into a series of joint ventures for the development of projects in different places. In 2018, 9 joint ventures were authorized by the Board of Directors for 1,426,352 sqm developmental projects of which 715,410 sqm is located in Bulacan.

Sources:

  1. SLI SEC 17-A 2016, https://goo.gl/bC8UAC
  2. SLI SEC 17-A 2016, p. 4, 15 https://goo.gl/bC8UAC
  3. SLI SEC 17-A 2016, p. 9 https://goo.gl/bC8UAC
  4. SLI SEC 17-A 2016, p. 8, 36, 38 https://goo.gl/bC8UAC
  5. SLI SEC 17-A 2016, p. 206 https://goo.gl/bC8UAC
  6. SLI SEC 17-A 2016, p. 10 https://goo.gl/bC8UAC
  7. SLI SEC 17-A 2016, p. 35 https://goo.gl/bC8UAC
  8. SLI SEC 17-A 2016, p. 57 https://goo.gl/bC8UAC
  9. SLI SEC 17-A 2016, p. 60 https://goo.gl/bC8UAC
  10. SLI SEC 4-30 2018 Special Meeting of the Board of Directors held on 15 February 2018, https://goo.gl/yLVXXA
  11. SLI SEC 17-A 2016, p. 165 https://goo.gl/bC8UAC
  12. SLI SEC 4-30 June 23,2017 Full Payment on Early Redemption of PhP2,000,000,000.00 Series A Unsecured Fixed Rate Peso Bonds, https://goo.gl/Se9pHE
  13. SLI SEC 3Q17-2, p. 39 https://goo.gl/fPbvGJ
  14. SLI SEC 17-A 2016, p. 36 https://goo.gl/bC8UAC
  15. SLI SEC 4-30 2018 Special Meeting of the Board of Directors held on 08 January 2018, https://goo.gl/uhBMPa
  16. SLI SEC 17-A 2016, p. 36, 37,24 https://goo.gl/bC8UAC
  17. SLI SEC 4-13 November 6, 2017 Clarification of News Reports, https://goo.gl/nP8PGt
  18. Lucia allots P15 billion for capex, https://goo.gl/XtrRj6
  19. SLI SEC 17-A 2016, p.18, 20 https://goo.gl/bC8UAC
  20. Sta Lucia Residenze Santorini Towers And Condotel, https://goo.gl/H52E3p
  21. Lucia Realty and Royale Homes Marketing Corporation, https://goo.gl/qSQxGA
  22. SLI SEC 17-A 2016, p. 13 https://goo.gl/bC8UAC
  23. SLI SEC 4-13 August 25, 2017, https://goo.gl/jKswzN
  24. Lucia holds groundbreaking for Silay City residential project, https://goo.gl/n2AC8n
  25. SLI SEC 4-31 October 16, 2017, https://goo.gl/x1TqU5

 

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