Cebu Landmasters, Inc. ($CLI)

Good morning. [Technical Difficulty] earnings call of CLI. Joining us in this call is our COO, Mr. Franco Soberano; our CFO, Ms. Paquita Rafols. Also joining them is our Deputy CFO, [ Mr. Renz Canete. ] Our presentation will cover the results of our operations for the first quarter 2026 as well as recent business updates and corporate milestones. [Operator Instructions] Kindly note that this presentation and Q&A may contain forward-looking statements from our executives. These are subject to risks and uncertainties that may cause the actual results to differ materially from management's estimates and forecasts. Also, please be reminded that this call is being recorded. We now turn you over to Franco.

Hi, good afternoon, everyone, and we're so pleased to be meeting you again and reporting our results. So as you know, one of the strengths of CLI is really our regional presence in the VisMin. VisMin is really characterized by favorable demand-supply dynamics. So with that opening statement, I'm very pleased to report our position of strength in the first quarter of 2026. While we acknowledge there are challenges in Metro Manila or Luzon, CLI's operations are almost exclusively in the VisMin now and we only have 2 newly acquired sites in Manila. So with that, I'm expressing these statistics that we are still the #1 developer in the VisMin area with 18% market share. We are present in over 18 key areas in the Visayas and Mindanao, over 132 projects in our diversified portfolio. We have PHP 6 billion in revenues in the first quarter of 2026. And what may be very -- what will be very good to share with you is that this is 20% growth year-on-year. We have over 1,460 employees. And from 2017, we've achieved a 21.3% in compounded annual growth rate in terms of revenue. So you can see our position of strength is in the map. We are very proud to be a leading developer in a strongly developing region, and it's faring very well during the current times. Next slide. For the key highlights before I pass it on to our CFO, Ms. Kits and to our Deputy, Renz, I'd like to just showcase these 5 highlights. First, top line is driven by steady project progress. Residential revenues drive top line growth as residential revenues and related interest income jumped 21% to PHP 5.8 billion from PHP 4.8 billion. Number two, steady reservation sales despite economic global headwinds. Residential reservation sales reached PHP 4.6 billion in the first quarter, supported by resilient end user demand despite a cautious market. And I'll explain more later how CLI is able to take advantage of the opportunities during this time. The third, strong sales take-up backed by solid housing demand in VisMin. Residential units of CLI, almost 50,000 of them or 92% sold across all projects and newly launched projects account for 77% of reservation sales. So this is why we still need to keep on launching projects. We're very proud to report 92% sold across all our projects. Fourth, stable balance sheet and improved cash flow. Disciplined finance strategy has resulted in positive cash flow and strong balance sheet as the debt-to-equity ratio improved to 1.59x from 1.66x. And lastly, these are the fruits of our labor in the recurring income push, which is now gaining traction. A compelling lineup of leasing projects and expanding hotel portfolio to provide another avenue for growth. So a 15% growth in our recurring income quarter-on-quarter -- year-on-year. So with that, I turn you over to Kits, who will report our financial results.

Good afternoon, everyone. We appreciate you joining us today. For the income statement, total revenues grew 20% to PHP 6 billion from PHP 5 billion in the same period last year. The main driver was sale of real estate and related revenues, which rose 20%, reflecting continued construction progress and revenue recognition from ongoing residential projects. Recurring revenues also posted steady growth. Hotel revenues increased 14% to PHP 119 million. Rental revenues rose 14% to PHP 60 million and management fees grew 19% to PHP 31 million. Gross profit increased 29% to PHP 3.1 billion, with gross profit margin improving to 51% from 48% last year. Operating expenses increased by 4%, while interest expense declined by 5%. Consolidated net income stood at PHP 1 billion, while net income attributable to parent shareholders reached PHP 881 million. For proper year-on-year comparison, it is important to note that Q1 2025 included a onetime gain from the sale of an investment property, which added approximately PHP 0.9 billion after taxes to prior year net income. Excluding this nonrecurring item, the quarter reflects stronger underlying performance from the core residential business and continued growth in recurring income. Basic earnings per share for the quarter was PHP 0.25. Thank you, and that is for my report. I will now turn you over to our Deputy CFO, [ Renz Canete ] for other operating highlights.

All right. Thanks, Kits. So for our revenues, so we'll just report and show you the breakdown. So for starting with our top line performance, CLI posted PHP 6 billion in consolidated revenue for the first quarter, up 20% year-on-year. So on the upper hand right side, you'll see the sales in real estate with finance income is 20%. Hotel segment is 14% and then the leasing is at 14% up. This was primarily driven by continued construction progress across our residential projects, which supported revenue recognition during the period. Sale of real estate grew 20%, while recurring income from different segments continue to expand, both with hotel and leasing revenues up 14% year-on-year. On the right-hand chart, from a market standpoint, our realized revenues remain strongly supported by affordable and mid-market housing demand. Geographically, Cebu continues to be a key contributor, but we are also seeing continued diversification from our other investment growth areas. Next slide. Residential reservation sales reached PHP 4.6 billion in first quarter of 2026. This is broadly steady despite a more cautious macro environment. While this is slightly lower by 3% year-on-year, and the important message is that demand remains, which is supported by end users, particularly in the affordable, economic and mid-market segments where CLI has a strong position. Casa Mira Garden -- Casa Mira and Garden Series projects continue to drive our sales mix. So we also maintain a healthy pool of remaining inventory. And right now, it's around PHP 16 billion across different projects such as the Wave Towers, North Grove and Pristina Town, Casa Mira Towers Palawan, Costa Mira Beachtown Mactan and other ongoing developments. So while we remain watchful on the market conditions, the demand base remains fundamentally intact. Next slide. Moving on to our balance sheet. CLI ended the quarter with total assets of around PHP 139.7 billion or PHP 140 billion, up 4% from PHP 134 billion of prior year. Cash increased to PHP 3.8 billion, while total equity rose to PHP 36.6 billion, which is supported by retained earnings and noncontrolling interest growth. As mentioned by Franco a while ago, net D/E actually improved compared to period last year from 1.66x to 1.59x, which reflects the disciplined capital management we are continuing to fund project executions and expansion. Overall, the balance sheet remains stable, and we foresee that we really have adequate capacity to support our ongoing developments and future pipeline. Next slide. Moving on to our receivables. So we usually are very happy to present this because steadily, we have been growing our receivables over the years. So as you see from 2022 of PHP 63 billion, now it's about PHP 100 billion. As of March, it reached PHP 100 billion contract receivables, which is a milestone for us. This is supported by a broad base of homebuyer accounts across completed turnover, ongoing construction and recent project launches. What is important here is not just the size of the receivables base, but its quality. So for the period, our current delinquency rate remains low at 2.92%. Our cancellation rate are also at low 2.82%, which is actually an improvement of full year 2025. And out of that canceled sales, we recovered around 97% for the period as well. This reinforces our view that CLI's market is largely end user driven. Buyers are purchasing homes. They intend to live in or hold for the long term, which supports collection resilience even in a more fluid economic environment. Moving on to our cash flow. CLI generated positive operating cash flow for the period of about PHP 730 million in the first quarter. This reflects our dual focus continuing to support expansion, while on the other hand, maintaining capital discipline. We continue to invest in land and development assets that support our future pipeline, but we are also mindful of liquidity and cash flow resilience. Compared to the same period of last year, operating cash flow was lower mainly because last year benefited from stronger working capital movement and the timing of collections. But the key message is cash flow remained positive even as the company continued to fund project execution and strategic land acquisitions. Our approach remains balanced, protect liquidity, continued delivery and invest selectively where the long-term demand case is strong. And lastly, our debt maturity profile. We are also happy that it remains well supported by the receivable base. As of March 2026, the company is around PHP 99 billion to collect compared with the outstanding debt of PHP 70 billion. This provides visibility on future inflows and supports our ability to manage upcoming maturities. Our loan book is also balanced between floating and fixed rate obligations. So you see the right-hand chart, 54% is floating, while the balance is to fixed loans. Given the current interest rate and macro environment, we continue to monitor this funding mix carefully and manage refinancing risk prudently. With this, I turn you over to our COO, Franco.

Thank you to my finance leaders here. I'll be reporting on the business updates. So you can see here our expanding portfolio. We've updated some photos here with our newly finished projects of Dumaguete, our housing. We have the [indiscernible] there being showcased because we just opened our mixed-use project. So we've been really working hard on this. We are positioning ourselves for a very sustainable and strong long-term future. So I'll report on each segment in the next slide. So for real estate sales, we're very proud to report a 21% growth in revenue. This is really, as you know, in real estate reporting, revenues are dependent on percent of completion and collection. So there's some -- so these take into account the timings of projects as they are recognized. and we're very happy to report that growth of 21%. The more important statistic for us, and we've been speaking a lot on many interviews, many panels, this 92% sold across PHP 176 billion launch portfolio is really an indicator of strength. And if you drill it down, where are Cebu Landmasters launches, where are Cebu Landmasters inventories, it's really exclusively in the VisMin, this sales performance, where the end user is our key market. Next. So this is the breakdown of the 92%, including recently launched projects. all our completed projects are 94% sold. Ongoing construction are projects that are turning over in 1 to 2 years' time and recent launches are just launched in last 1 year. So I would like to really say that these are net of whatever has been canceled and resold. So what really gives us a lot of assurance and what -- and this assurance I can pass on to our investors is the very low cancellation rate, 2.8%. And of the 2.8% that canceled, we're able to resell 97%. So I hope this can really be emphasized as the strength of CLI. It's really how we've designed our operations to strongly communicate with buyers to reciprocate that buyers trust with performance on the field. Next. So you can see our various projects that we've completed already. Several of these are already mostly taken out, meaning the balances of the buyers have already funded by various home loans. And these are, in turn, generated a lot of strong internally generated cash for the company. Next slide. Of course, we have ongoing turnover of projects, which is really one of the happiest spaces for developer. So these projects are turning over like Bohol, Velmiro, Casa Mira, Mivela. We just showcased our 3-story clubhouse, one of the best we've developed so far. And Casa Mira Towers Guadalupe 1, 2 and 3 are already being turned over. Of course, we have hotels that we were about to complete like Sofitel that will be completed next year. Next. So you have here construction in progress from Astra, Paragon, Ormoc, Davao and even Casa Mira Homes now that we just started 2 years ago. We're already able to complete some units this year. Next slide. And here, more projects we are completing and turning over now. So this is -- as you know, I will just mention in case it's asked, we're happy that many of our projects have really structurally completed because these are the projects that are shielded from the increases in material costs. Most of the increases in material costs are affecting structural components like cement and steel, but CLI has several projects that have already completed the structural phase like many of these projects that are nearing turnover. So that helps us to mitigate many of these external pressures. Next slide. And for recent launches, I think this is where it's -- since March, we are still able to generate a good amount of sales. Now there is a sustained demand for our products because there's not a lot of inventory to begin with in the VisMin area. For example, we have the Wave Towers. We are actually approaching -- I think this is 14% sold this year. But in total, we are already at 41% sold or maybe this is need to correct. So we are already inching up on many sales levels of our various projects here. Even the West Village in Davao Global that we recently launched, 51% sold. So the Wave Towers here is 41% sold. So this gives us a lot of confidence in the market. Next slide. So recent project launches. This is where CLI is at its best, moving very quickly from acquisition to permitting to reselling and launching. We did all this in the last 6 to 8 months. Next, our leasing business, you see here the growth in our leasing growth as we've completed more leasing assets. Next slide. So you can see here, just last year, we opened the Astra Centre, Patria de Cebu, Davao Global and the retail block at Casa Mira Towers Mandaue. These are very important wins for us as a newer player in the mall and retailing business, but we're very hands on, not just hands-on in the sense that we're there during the ribbon cutting, but actually, we're really there in making sure the operations are supported, our leasing officers our -- given the great customer service mindset. For the hotel business, now which has also registered a 14% growth now with almost 1,000 rooms operational. You can see here our famous Jeepney furniture in the entrance of our Radisson Red hotel. So you can see here that we just opened the Radisson Red, the newest international hotel in Cebu Island. We're very proud [Technical Difficulty]. So I'll just continue. Sorry about that. Just a small technical -- sorry about the minor technical issue. So here, we're reporting the growth in our hospitality revenue. Next slide. This one is a very important slide for us. So CLI has always been hovering at the 100 hectare in land bank because as we've acquired, we've launched, but we made a deliberate strategy to really get larger land banks for major townships that allow us to generate revenue for a longer period. And you can see the jump here from 107 hectares in 2024 to 188 and now 273 with the acquisition of our Cavite Dasmarinas property, our affordable well-planned residential township in Luzon. So this makes me very excited because we are leading the market right and the need is affordable housing in Luzon. This is the acquisition of the Cavite Dasmarinas property. So we've tripled our land bank basically in 2 years. And you can see here that a majority of our projects are wholly owned by CLI, and yet we work with very reputable JV partners. We have horizontal as 83% of our land bank and Cebu still holds 43% of the land bank, while the rest are 30-plus percent. For estates and townships, you have the plus 2 upcoming there that is the Liloan Township in Cebu and the Cavite Dasmarinas Township. But you can see how each township we develop is bustling with activity, bustling with progress. We have, of course, the Manresa Masterson Campus with adjacent mixed-use property that's complementary. So Manresa is there to fund the educational mission of Masterson Campus and Xavier University. Then Pristina Town in Cebu is our micro township also located in the northern part of Cebu City. Next slide. So here, as you said, as I was able to mention, everything here is progressing very well. DGT is now commanding one of the highest land values in Davao. It is attracting the attention of many strong retail operators. We've already launched East Village here that is sold out. Then you have the West Village here. And we have the city center that's opening next, our large outdoor mall with a ETFE roof that will open before the year-end. So here are the 2 new townships are Dasmarinas, Cavite township, 70 hectares. And you have here a teaser or perspective of the Liloan Township with its own community church in the heart of the township, and you can see it overlooking the Bay or the Kanjaga area. It will have all our residential offerings from Casa Mira to Velmiro to lots only to -- but the focus here is we're creating a 4 lane road that will serve as like a parallel access going north and going south, which will really help the traffic situation and contribute to the economic growth at the same time. For significant milestones before we address your questions. So here we are, all dressed in red just 2 weeks ago. It was a very exciting property to design and build. In the middle of the pandemic, we never slowed down. So we are the only new international hotel to open, if I'm not mistaken, in the whole VisMin or at least in Cebu. And it sends a very positive message that we can only attract tourists if we have the tourism infrastructure. So hotels are built for the long term. We have a very superior product operated by a strong international operator with Radisson, and we're excited about the initial response of the market. So thank you for supporting the new hotel of CLI. Next, you have the HomeFest. This is very important because one of the priorities of developer is to make sure that home ownership is fully realized by our homeowners. So -- our job is to make sure our banks are also very close to their future homeowners. So we organized HomeFest that allow banks to offer very special promos, home loan rates, packages to our buyers as priority. And in -- for example, in this HomeFest alone, I think over PHP 1 billion of home loans were underwritten and approved just in these 3 days. So we thank our partner banks, and thank you for supporting the dreams of our homeowners. Next. And here, even for sales, so we make use of our new mall with Astra Centre, beautiful interiors showcasing the corals and beauty of Cebu through our interior, but our HomeFest also can generate like from PHP 500 million to PHP 1 billion. So in 1 day, we generated PHP 700 million reservation sales just a few weeks ago. So you can imagine how that gives us a lot of confidence in our market and our products. Next, please. So very proud also that beyond our real estate mission is a strong educational mission. As you know, we're also helping Xavier Ateneo de Cagayan. We've helped Ateneo de Manila with sports. We've helped Ateneo de Cebu also with sports and various programs. We've helped University of San Carlos with scholarships. And we're very, very honored to be partnering with UA&P, University of Asia and the Pacific for the opening of its Cebu Centre for Executive Education. It is a dream come true for our family, for our supporters of UA&P, but also for [indiscernible] because quality executive education is very important. It's not just about the numbers, it's also about leadership development, ethics. It's also about public-private partnership. So through this executive education center that UA&P has graciously brought to Cebu with the support of Cebu Landmasters, we're excited to be training more business leaders with a very strong social consciousness for nation building. So thank you, UA&P. So just small wins like this, we're very hands-on even with turning over our clubhouses. Just to share with you, this is just supposed to be 2 storeys, but we like to make it bigger. So it's a very beautiful clubhouse with 3 storeys. And our residents are very happy and proud of this development. Next. So just last, showing you our versatility. We noticed that sports tourism or sports facilities are becoming a very yielding, and we've decided to enter the sports facilities market to complement our retail and hotel businesses. And we found Gameville to be a very strong partner, operating very successful sports and gaming hubs in the Pioneer Mandaluyong areas of Manila. So we're very excited about this. And I'm retired from basketball. I'll be back. So we're very proud because Cebu doesn't have these wooden courts with air condition. Of course, this can have pickleball, volleyball and you have a 300-room the pad co-living that we own just adjacent to this. So it can be a very nice facility that will host international tournaments, practices of professional teams and of course, for friendly basketball and volleyball and pickleball also. Next. So the key investment message, one, continuous construction progress in all projects. We will not stop construction. We will always forge ahead and push forward given our leadership here in the area. And many are counting us to continue construction. Our buyers are counting on us, our contractor suppliers. So it's our job, our duty to keep this industry well supported. So I'm happy to report that all sites are moving at full progress for Cebu Landmasters. Number two, steady reservation sales, including the PHP 700 million in the HomeFest we sold in 1 day amid evolving market conditions. And I pointed out how and why VisMin is an outlier. There are opportunities in the VisMin area this year. Number three, resilient homebuyer accounts with low delinquency and cancellation rates of only 2.9% and 2.8%, respectively. So with this, this is probably how you can compare CLI to our peers. This shows us that we're targeting the correct market that really is qualified for their units that has the long-term plans for their units because the delinquencies are very low. Number four, management remains disciplined and agile amid fluid geopolitical and domestic conditions. We're focused on cost management, capital discipline and steady project execution. And we've been in the business long enough to see our share of cycles. And what we've learned is sustaining our projects, delivering on our commitments to buyers and stakeholders will reward the company in the short and medium and long term. So with that, I'd like to thank again the team, the CLI team for the very strong Q1 results, for the very resilient Q1 results, and we're excited to see the performance we can do in the succeeding quarters. So thank you very much.

Thank you, Franco. We now open the floor for your questions. Okay. First question is for Ms. Rafols. Why did net income decline despite 20% revenue growth?

Last year, during the first quarter, we had a onetime sale of a strategic asset in a strategic unit in one of our assets, and it contributed PHP 0.9 billion in net income. That's why there's still a decline in year-on-year net income in spite of the 20% growth in the revenue.

Thank you so much. Another question is how much is CLI's target CapEx for 2026?

Yes. Let me take that. So for 2026, as we also disclosed during our briefing earlier this year for full year 2025, we still target the same amount, that's PHP 20 billion, of which 63% would pertain to project development or around PHP 12.7 billion. As mentioned by Franco, there's no stopping. We will continue with continuing and delivering these projects, especially for those that we've already programmed for takeout this year. So that's around PHP 12.7 billion for CapEx for project development. The rest would be for lot acquisitions, program lot acquisitions and also for general capital expenditure.

Another question is any comment on CLI's construction cost exposure for the month of March and April?

Yes. So as we mentioned, the nice thing about CLI is we do have projects in different stages of construction. So I have 1/2 of my projects already structurally complete, meaning these are not susceptible to the cost impacts of oil. So oil helps to produce cement, steel, those that use a lot of energy. So with that, I have to deal with the minor increases in the cost of finishing materials because, for example, finishing materials from China, in spite of the global pressures are still at a very reasonable level, meaning there's no I would say, not even more than 5% increase in the cost of architectural and finishing materials because there's just a lot of supply because there are less projects in certain parts of the world. So there's a lot of inventory of finishing materials, and this is advantageous to CLI. So the other half of my projects that are really in the structural phase, the good thing with CLI is we command one of the largest volumes in the market, and we're able to negotiate the best rates from our key suppliers in steel, cement, wires and cables, what other big materials. I would say the cost impact of this since March to April has been around 10% to 15% but you multiply that by its weight as a percent of the total project, I would say it's a hit to our cost of sales of just 1% to 2%. So that's how we look at it as a very manageable situation still. The good thing probably is the jump of 10% to 15% happened at the end of March to early April, and it has plateaued. The prices of cement jumped, but now it's plateaued. I think it's reflected also in the price of oil that jumped to $120. Now it's down to $90 to $100. So it's reflected by that so far. And I believe certain market corrections and initiatives of the government to keep prices at reasonable -- as reasonable as possible. So with that, that's why we are not comprehensive at all. We've seen prices even go up more during the Ukraine-Russia war. Our prices rose more than 30% to 40%.

Thank you so much, Franco. Another question is any indication on the presales as of the month of April?

Do you have the figure? Sorry. So let us get back to you on that. What I do know is that HomeFest, where we sold PHP 700 million was in April. So imagine in 1 day, we're able to sell PHP 700 million. I think a very important item to report is most of our sales are from launches really from previous years. So you could see that our overall sales performance has increased because we are able to sell existing inventory from previous years. In fact, this year, we are supposed to launch 4 new projects in the first quarter. Out of the 4, we've only launched 1. So we are also hurdling certain delays in the issuances of permits, but we are really managing it well. We're able to hopefully launch 2 new projects next month. These are located in Ormoc and Cebu.

Another question is, what's your overall outlook for 2026 in terms of growth and key priorities? And are there any adjustments expected from the management?

So I would say that in terms of acquisitions, we've really tripled our land bank already. So we're very positioned well because those big townships in Liloan and Cavite, we were able to start reselling next year and so that we generate good value out of those acquisitions. But in terms of growth, I think we are still aiming for growth, for positive growth. I think that's really the sentiment among the Executive Committee, among the Board that we're still aiming for growth. We feel that it's our duty as a leading player in our region, but also given that there's still appetite for our products, given the growth in sales, given our experience in mitigating escalations in costs, inflation, what's very important here is execution, project execution, strong capital management and hopefully, at the end of the year, we will achieve that growth that we -- that maybe others may not be projecting it as optimistic as CLI, but that is really how we feel given our position of strength in the VisMin area.

Thank you so much. Another question is what would CLI plan to develop the township in Dasmarinas? Would it be the same development like your townships in Cebu? So how will it differ?

Yes. So what we're evolving into is really residential township because we have to graduate from doing subdivisions just subdivisions. So residential townships would showcase a variety of our affordable middle market and lots-only products and even our walk-up condominium products that are even very affordable. But these are accompanied by very well-planned park spaces, active sports areas, civic centers, community centers, retail centers in the most generous way possible. So that's really our view. We are doing planning now. We have tapped an international master planner to do both our new townships in Liloan and Dasmarinas Cavite. So we're really looking at it, how can we be better than what has been already done because there are many residential developments in Manila. So we are really conscious that ours has to be better. It's affordable, but there are many ways we can be better. I hope that answers your question.

Okay. Another question is on the land sales. What would have been the comparable net income excluding the first quarter gain as of last year?

Since our onetime gain contributed PHP 0.9 billion, it would have been approximately 100%.

More than 100%.

100%.

Yes. Another question is, are you expecting any other land sales for this year?

Yes. I think we are expecting as there is strong interest in our township like the Davao Global township, but we are not under any pressure to sell. I believe we are just selling to the right group who also embraces the values of our development and of course, at the best price. The Davao Global township, for example, is commanding already one of the highest land values given its very well planning, the widest roads, underground cabling, the good maintenance and its proximity to the largest residential area in Davao. So we are expecting lot sales, but we are also not under pressure, and we're finding only the right investors for the lot sales.

Another question regarding the VisMin panel regarding the VisMin market. Are you seeing any difficulties brought about by the rising fuel costs?

Yes. I think I explained it in certain areas of my presentation. I believe no developer is spared from the challenges of the rising fuel cost. I believe it's how the developer manages and manages it and how resourceful our developer is. So as I already mentioned, the difficulties are overcome by not stopping construction because when buyers see us continuing construction in a very strong -- with very strong progress, they are also motivated to keep investing with us. So it's us reciprocating the trust of buyers that we have to continue construction. So as Renz and I have reported, all our sites are at full mobilization and full capacity is how we're doing it. So how do we -- for example, we are also in a position to support our contractors, meaning none of our contractors have really activated any escalation clauses because -- but what they've asked is our support. I mean we are ready to support them with our usual timely payments. We're ready to support them with expanding business. We're ready to support them with providing the materials that they are supposed to procure, but we can procure on their behalf. So what is able to overcome the challenge is supportive developer. I think that's really the key message. And we've also done the same during the pandemic, during the inflationary pressures of 2023. We are very supportive of our contractors. And in return, they give us the progress needed to achieve our project objectives.

Thank you so much. A question on price increases. Were you able to increase the prices for your early-stage projects? And how does it look moving forward?

Yes. So we do. The good thing maybe is we've always managed projects at good margins, meaning our projects are always at a 50% gross profit margin, and we've always achieved net profit margins above 20%. So we're also in a position to say that losing 1% to 2% of margin is very acceptable still as we are able to manage OpEx to ensure that the net profit margin is still reasonable. So -- but to be very frank, we have not done a widespread price increase across all projects. We've managed to maintain the prices of most projects because we're confident in our operational efficiency, making sure that we are still within budget in spite of the impact of the fuel prices. And please know that this comes from experience. I've finished almost 100 projects already, constructed more than 60 buildings, and it's really experienced as the best feature right now. Some materials don't need to be hedged because steel prices, my learning was steel prices went up from PHP 36 to PHP 59 in 2023. But I think just 6 months after the PHP 59 went down to PHP 40. So there's wisdom in not locking in because fluctuations can also go in our favor. How we have managed to protect prices is the volume. Now we've locked in volume at good prices since we have -- we don't have just one construction project. We have 25. So I can tell my supplier to support me since I have one of the best volumes, I can spread across the project. So basically, the margin contraction for us is very small, I would say, 1% to 2%. And I -- let's say, the situation will carry forward to the end of the year, that 1% to 2% is still like acceptable for us. And how we can correct the margin, of course, by increasing prices. But we're also comfortable maintaining prices so that the market is able to absorb the inventory.

Thank you. A question on the interest expense. What's the effective borrowing rate of CLI for the first quarter of 2026?

Sure. So as you know, our debt mix is around 54%, 46% floater versus fixed. We're happy because over the past few years, on the fixed side, we were able to raise capital at a range of 5.5 -- sorry, 5.5% to even 6%. On the floaters, we're getting them at around 6% to 7%. Of course, on our end, we are managing the mix, especially that the [indiscernible] rates are also and the benchmark rates are also going up. But yes, we're projecting to keep the rate at the same level.

A question is, are there any launches in the first quarter? And can you give us a guidance on the launches for the full year 2026?

Sorry, can you repeat?

Are there any launches? Are there any new project launches for the first quarter of 2026? And can you provide us guidance on the full year launches?

Yes. So we are actually supposed to launch around 6 projects from the first to the second quarter. So far, we've been able to secure a license sale for one. That's Costa Mira Mactan. Nevertheless, we are really pushing forward, meaning we are confident of launching these projects because the compliance for the permits are near perfection. We have submitted all the complete requirements to get these permits. So we have projects in Ormoc. We have a new residential offering in Cebu. We have also an expansion in our beach condo in Mactan. So these are all programs for this year. In fact, our program really for the whole year, you can give me 1 minute. I'll get back to you on that. I'll just open it because we do have a program to launch a certain number of projects and an equivalent value. So I'll just get back to you or I'll send the answer to what to ask.

Yes. We can answer it to you by e-mail. Another question is on the strong sales take-up. Can you provide what supported -- is it supported by ongoing promotions, maybe discounts or spot payments or extended payment terms? So can you provide more color on the very strong sales take-up that we have in the first quarter of 2026?

Yes. Let me take up and maybe Franco can add. So I think the strong sales take-up, definitely, we have ongoing promotions. In fact, for this year, lots of potential discounts, especially for inventories that already were turn over this period. And extended payment terms, on average, we're still, I would say, one of the best in the industry, hover between 4 to 8 months on average along the project term life. So yes, definitely, it's supported by these ongoing promotions.

Yes. So just going back to it, actually, our plan, which includes projects that's for launch early next year, we started the year with a plan to launch over 20 projects in the next 12 to 15 months, encompassing around 9,600 units and worth an inventory value of PHP 48 billion. So that was the plan at the start of the year, which we shared early in the year. And the plan is still in motion, but this will extend to early next year. And these are -- majority of these are sites really in the VisMin area, including places like Cagayan de Oro. We have places like Ormoc, Liloan is included, Mandaue, it includes also Panglao. So you have a good dispersion of these projects in the VisMin. It includes our first offering in Pasig City as well.

Thank you so much, Franco. I think that's the last bit of questions from our audience. So with that, we now end this call. Thank you so much. We'll be keeping in touch. See you in the second quarter earnings call of CLI. Thank you so much.

So maybe just to end, I like to thank everyone again. If there were questions we were not able to answer fully, please feel free to contact JR from our Investor Relations. And I hope you were able to get a glimpse of how CLI is navigating strongly through the first quarter and half of the second quarter. We're still very confident in our abilities, and it's reflecting in the results. So we do hope to see you again as we report the second quarter results just in a few months. So thank you again to our analysts, to our shareholders. Thank you very much.