Cebu Landmasters, Inc. (OBAI) Earnings Call Transcript & Summary

Good morning, and thank you for joining us today for the Third Quarter 2025 Earnings Call of CLI. Joining us is in this call is our COO; Mr. Franco Soberano; and our CFO, Mr. Grant Cheng. Our presentation will cover the results of our operations for the 9 months ended September 30, 2025 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 the disclosure is being recorded. I now turn you over to Franco.

Hello. Good afternoon, everyone, and thank you for joining us on a busy Thursday. Before anything else, I'd like to express our empathy and sympathy to those affected by the recent typhoons, especially that affected many of our brothers and sisters here in Cebu. We want to report also that CLI has been helping many LGUs in several cleanup efforts as part of the Bayanihan spirit that Cebu is known for. So I'd also like to say that many operations are back to normal -- sorry, just last week here, but CLI is continuing to help those in need during this time. And at this point, also I'd like to share that there's still a lot of good news here and then all over the Visayas Mindanao area. We want to report that we remain to be the developer with a leading market share here at 80%. Our portfolio has grown to over 131 projects. Our revenue, in spite of headwinds has grown, is up 2% to PHP 14.3 billion in the first 9 months of 2025. And our CAGR I would say it's still very much industry leading at 29.8% for the last 7 years now of compounded annual growth rates. So at this point, I turn it over to Grant, who will take us through the financial results, then I'll come back to you for the results of our operations.

Thanks, Franco. Okay. Can we move on to our financial highlights, please? So for the third quarter -- that is the correct slide already. For the third quarter of 2025, CLI was able to garner total revenues of PHP 14.33 billion compared to PHP 14 billion same period of last year. So steady performance and growth of 2%. But I will very quickly hasten to add, and I'll draw your attention to other operating income because there was a significant lot sale that we also announced publicly earlier this year in that of -- in our Davao Global Township. So that is a nice the nice upside performance that contributed to the positive performance of the company in 9 months 2025 compared to last year. So we've maintained our performance. In fact, it's a slightly better same period of last year with consolidated net income, clocking in at close to PHP 3.1 billion compared to PHP 2.9 billion same period last year. We more or less maintained the same level of margins -- of gross margins and net income margins to that effect. Next slide, please. Okay. Where those revenues are coming from? I want to highlight that we've maintained our core business completely for that. The -- if I can draw your attention to the upper right table, our economic housing segment or Casa Mira, that is contributing quite significantly to our revenues during the period so far. And combined with our Garden Series this formed the core of our business. In fact, if you've been following our fundraising programs, and we have recently issued earlier in the year, sustainability-linked bonds. And we are, in fact, in the middle of issuing our second tranche of sustainability-linked bonds where we commit to continue building these affordable housing units as our key performance indicators for our sustainability bonds. And the growth of our revenues is attributable still mostly to our housing and condominium sales in the residential unit. But I think it's also very encouraging to see that our other business segments, particularly our Hospitality and Leasing segments are growing quite significantly. And this is a function of more of these assets becoming operational, coming online in recent periods. And then if you look at the table below where we look at what are -- where those geographies or which markets are contributing to our revenues. You could see that they're pretty well spaced out with Cebu contributing 30% of recognized revenues besides ex-Cebu at 29% and Mindanao at 38%. So very evenly balanced contribution showing good diversity -- geographical diversification and we will -- we're keen to add Luzon and Metro Manila to our mix of where revenues are coming from once we expand into those markets. As far as how we're doing compared to last year, we're actually doing slightly the better as prefaced in the previous slide. And we're looking on trap to meet or even beat last year's numbers. Next slide, please. If our accrued revenues that you see on our balance sheet, is -- I always call this a lagging indicator, because those are sales that we are beginning to recognize by virtue of collection and percentage of completion. This slide shows is the leading indicator of our performance or it's the real-time market impact that CLI is having. So when you say reservation sales, they are the actual sales contracts that we were able to sign this year that we will deliver over the next few years as we build up those preselling units. And this is something that actually lays the foundation and shows you how much growth we are poised to recognize and put on our performance on our financial statements in the next few years. This year so far, we have already sold over PHP 21.5 billion worth of housing units. And that's a net figure, by the way, that's net of cancellations. So not only is this figure already a significant growth, 27% growth from same period last year where we sold PHP 17.93 billion worth of real estate units same period last year, but PHP 21.56 billion is already higher than our full year performance last year. So needless to say, it will be another record-breaking year for us. And with about -- so we're reporting only 9-month numbers. So with 3 more months of performance to go a new launch is coming where this is looking to be quite a good banner year in terms of the number of houses that we are selling. And my partner, Franco will elaborate and show you some details of what's driving these results and where those sales are coming from. Okay. Next slide, please. If you take a look at our balance sheet, it tells the same story about who we are as a company and what our core businesses are, our core business is and how we are growing that business. So our balance sheet increased mostly as a result of being able to accrue contract assets, which again is the value -- mostly is the value of sales contracts that we're able to accrue by virtue of collection and percentage of completion. So just to draw your attention here, our biggest assets would be our receivables, our contract assets, real estate inventories that we are converting into sales that we're converting into contract assets and collectibles as we build up a percentage of completion and as more sales contracts qualify. So in fact, I've always said our financial statements are lagging indicators because a good amount of real estate inventories are actually sold units, waiting to get qualified by virtue of seasoning and collection. And the other side, the other big component of our assets would be our investment properties. That will be contributing to recurring income. So we look forward to seeing that part of the business contributing strongly to our revenues and our cash flow. Okay. Next slide, please. So this is one slide or a view into our business that I always want to dwell on when people ask how CLI is balancing risk management with impressive growth and how we intend to manage our debt maturity profiles. So the next 2 slides really break it down for our analysts and investors to appreciate no. So as of today, we have PHP 92.28 billion worth of contract receivables. So what does this mean? The PHP 92.28 billion, this is the remaining uncollected portion of our sales contracts cumulatively. So if there's some breaking down and showing some details of what this slide is seeing. The first is that, yes, while our receivables are accumulating, it's not in worrying shape. In fact, it's a very positive trend. If you break it down and look at the details, look at how much of the PHP 92 billion comes from completed and ongoing turnover projects. So it's a very small minority of the entire stack. What it indicates is that we're actually quite efficient in our collections, meaning what we're able to build or what we launched, we're able to sell out and what we sell out, we're able to build. And when we build it, we're able to collect it. Receivables don't remain as receivables for very long on our balance sheet and on our books after we have completed our end of the bargain and after we have built up the residential unit that we have sold out. The vast majority of our collectibles or our collection receivables are from projects that we have sold recently and therefore, we're still building up those residential projects and we look forward to collecting on the balance of those contracts once we deliver and turn over those projects. And so the reason why our receivables are increasing is because the rate at which we're generating new receivables and new sales is faster than the rate at which we're collecting sales from previous periods. In other words, it's a growth company that you are looking at. So the current collections represent sales from 3 to 4 years ago, whereas many of the sales that we have -- that we were able to sign up recently last year and this year, they are the ones contributing to the increasing stock of receivables. So it's wanting to see very strong sales. It's wanting to see very strong demand for the products that CLI is able to put out into the market. But if you'll actually look at other KPIs of the receivables stack, our cancellation is in delinquency rates. This is why we are confident in our strategy to continue doing what we're doing and expanding in the markets where we already have a foothold. Our delinquency rate stands at 2.07%. So considering the fact that we haven't even delivered the inventory, and we have such a high quality of receivables indicates the kind of demand that exists out there and the kind of customers that we have and the reliability of the cash flows that we can look forward to. And then you combine that with our cancellation and recovery rate, meaning when we see recovery rate, it means the units that we're able to resell if ever anyone cancels their contract, the net cancellation rate actually is less than 0.3%. So that is why we're able to maintain a very high on CLI's books. Well, let's contrast that to our debt obligations, which is primarily what we are using in order to acquire -- to have capital expenditures to acquire land and build up our -- and build up the construction progress. Next slide, please. It reflects in our cash flow, where our operating cash flow is, operating flow is close to breakeven and it reflects that dual strategy where we continue to acquire land, we continue to build up the projects that we are launching, but at the same time, delivering on past projects as well. And if you look at where the cash flows are coming from, it's coming from the bond issuances and raising the debt in order to acquire the land and launch the projects that lead to the sell-out REIT. Next slide, please. This is the debt maturity profile that I was referring to that if you age our receivables actually that's the light green columns in the background. You could see that if you stack them against our debt maturity profile, which includes both short-term and long-term debt it strategically synchronized so that it not only reduce its refinancing risk, but you could see how we are structuring our debt that is in line with the receivables that we are also looking forward to getting. So by being able to refinance or continuing to raise capital, we can actually strategically move this debt maturity towers into the future, free up our internally generated cash, continue to acquire land, continue to build projects that are getting sold out and continue to create value for our shareholders. We believe that this is the sustainable way, the prudent way to perpetuate the business model. And if you look at where our current debt equity ratio is and how we're managing our debt, that is the point of the exercise of lengthening that debt maturity profile. And given interest rates are moving in favor of issuers, meaning interest rates are -- the monetary environment that we're facing encourages more long-term borrowing. We're looking forward, but we're really doing some liability management strategies where we stretch our debt maturity profile. Okay. Next slide. Okay, I think that underscores the strength of our finances and the finances reflect the strength of our operations and how fast and how well we're selling out our projects. So to provide more context in detail so that I'll pass you back to our COO, Franco.

Yes. Thank you again, Grant, and thanks always for clearly articulating how the numbers reflect the strong performance on the ground. So I want to share our portfolio now at only 131 projects, and we're proudly growing this portfolio. These are all actual projects of our site. On the left is Velmiro Heights Clubhouse in Bacolod, you have Latitude Corporate Center our lyf Hotel the famous artwork on the exterior. You have Astra Center, that's our first big mall opening this December in Cebu with Radisson RED opening at the same time, and you have our very popular Davao Global Township on the rightmost side. So I would say it's a very strong portfolio for VisMin's leading player. Next. So I'll focus on sales. As Grant has said, the strength of our sales has allowed us to have almost PHP 90 billion of receivables that we're strongly collecting and taking out, always on ongoing basis. And how well our receivables cover the debt towers that we have strategically planned over the next 5 to 7 years. So you can see here the most important figure to note here is 93% sold. So across all these projects, we are 93% sold. And the total sales value that we've launched is PHP 172 billion. Next, please. So this is the -- where the sales are coming from. So the completed projects are at 98%. When we say ongoing construction, these are projects that are being turned over now or a year or 2 from being turned over. So this is -- so our goal really here is just to deliver these units and collect the projects. And for the new launches, which are 6 projects already at 64% sold. So these are projects we launched just in the last one year, and we're already at 64%. So I always say that there's still a lot of opportunity for this. I do believe that buyers are still very much discerning about the brand. And I think that's what we've been working on, the reputation, so that the sales really just flows because of the strength of our reputation and our commitment to the buyers that we have. Next please. So these are where all the completed projects are located. And you can see here that Cebu Landmasters still manages all the projects that we've completed. I believe this really speaks a lot because even during calamities like the recent earthquake we had and the recent typhoon, we reported 0 major structural incident here. Because CLI is still the one managing projects we've developed almost 20 years ago, 100% of the projects we complete and are still being managed by us. So during emergency situations, the developer is at the forefront of protecting the homeowners and we take pride in that. It's part of a commitment that we never compromise on. So we just want to share that with our analysts and investors today. Next. Of course, just a little preview of some actual construction Astra Center is our very large mixed-use project in Mandaue, Cebu, where CLI has its first big model property. So we are opening in December. So on a hectare plus property, we created 2 residential bundles, international hotel, a mall and an office. Casa Mira Iloilo located in the Jaro area is our sold-out economic housing project here that is responding very well to -- that was very safe, not during the recent typhoons and we've turned over more than half of the houses here already. So our Masters Tower, of course, is iconic building in Cebu, where the Sofitel is located on the upper floors and lower floors are Grade A offices. So we are completing this in early 2027. Urban Davao is our very special mixed-use development in Matina Davao, the residential condos ongoing turnover. The hotel are 263 rooms the opening by May next year. Now with a 1,500 square meter convention space. So just to let you know, in Davao, the largest city in the Visayas and Mindanao. This is really the next biggest hotel property to open. So there's not a lot of new hotels being delivered to the market. So we're very excited to capture that demand for quality accommodations in Davao. Casa Mira Towers LPU we're very proud of this. It's located in a township for supporting called LPU Town across the Davao International Airport. That's also where the Lyceum University Davao is located and is a collaboration between CLI and LPU, and we successfully delivered the initial units already here in the Casa Mira Towers LPU. Next. So construction in progress, as I mentioned, so these are where -- it's already 95% sold. So the job of the developer is to turn this over as promptly as possible with the quality buyers expect, and with the high service level. So when -- our goal is to satisfy our customers so that team there on the ground from the customer relations team, to the account management team are present in all these locations in all our sites. So we have ongoing turnover in all these locations. Next, please. So showing you some projects that will be turning over soon. Our Casa Mira Towers in CDO is really very due for turnover in the coming months. So the Terranza Residence is our vertical residential project in Iloilo, standing 32 stories. Mandtra Residence is in Mandaue and turning over the first tower early next year. So we have already ongoing turnover in this Casa Mira Towers Guadalupe. The East Village in DGT is a fully sold development in our Davao Global Township. Casa Mira Dumaguete is also turning over already. And you have Costa Mira Beachtown Mactan turning over soon and Casa Mira Towers Mandaue are beautiful Casa Mira that handled the recent typhoon very well, no incidents and free of any flooding or any issues here. So this was well built with the proper specifications and with the proper respect for the infrastructure in the neighboring areas. So we're very happy with this Casa Mira project as well. So next slide. So from the recent launches, so we launched One Manresa Place in Cagayan, Casa Mira Gensan, the Wave Towers, Nagomi Tower, Casa Mira Towers Palawan 6 and 7, Costa Mira Mactan Tower 3 and the West Village. So these projects have already generated PHP 15 billion in sales value in less than a year. So that's the strength of CLI's portfolio that we just keep rolling out. We have always a steady pipeline, and we're confident in the market where we operate. Next. So I just want to show you that it's not just about the launching. So why it's very important after we launch? We have to break ground right away. And that's where the value is. We have to make sure these products get to the buyers within the time frame that was committed. So in Wave Towers, a month after launching, broke ground. One Manresa Place just 3 months after we already have Gencon doing the excavation works and initial foundation works. North Grove, 2 months after selling broke ground. Casa Mira Towers, we launched Tower 5, broke ground. So that's the type of leadership we want to showcase. It's not just a selling, but are really moving straight to the construction and then doing our best to turn over within the time frame that was committed. Next. Okay. This is very important because we want to really highlight our push to increase the recurring income performance of CLI. You see a lot of positives here from the 49% leasing growth now growing GLA to 71,000, it will inch up to 115,000 as well. Next. So it might seem modest, but we also started with very small recurring income, but it's now at 70,000 and then we'll reach the 100,000 square meter net leasable mark. But you can see now it's contributing significantly now with a 49% year-on-year growth. Next. So another very significant result is our growth in the hospitality revenue, 101% growth. Now with 797 operational rooms, and still 922 under construction. Next slide. Okay. So you can see here now as of September 2025, we now have 797 operating rooms from Citadines Cebu with Ascott properties. You have The Pad, our co-living brand. You have lyf Cebu City with Ascott Group and Citadines Bacolod with Ascott Group. So these 4 have allowed us to register 100% growth in our hotel revenue. And you have Radisson RED opening one month from now, Citadines Davao in 6 months and Patria de Cebu in 10 to 12 months. So please expect this not to really evolve in our revenue base as more of this recurring revenue will now contribute and make an impact in CLI's top line. Next. Of course, our townships just really give us a lot of flexibility, a lot of pipeline for development. So we now have beautiful park DGT and we have 3 master plan committees today. Next slide. Of course you know the DGT which is a very popular township now in Davao Manresa. Very well-planned University Township in Uptown Cagayan and our micro township called Pristina Town in the Northern part of Cebu. So all of this really gives us that flexibility that long-term pipeline. Next. So DGT is a very special project for us because aside from showcasing that CLI is an excellent township player. We've managed to generate good cash flow by selectively selling to 2 very good institutions. Our East Village, our sold out Condo is now in a very advanced stage of structural completion. We have very good leasing here our big City Center Mall is opening next year. And the Retail Pads are already operating. And for those who know it, I get very happy when contacts from Manila or other parts of Philippines happen to pass by here and are so impressed with the development of the Davao Global Township. Okay. So this is very important because CLI has almost doubled its land bank just in the last few months. So we are now at 188 hectares with the addition of our new township in Liloan located on the -- near the highway in an elevated terrain. So we're very proud of this through our joint venture company Cebu Homegrown Developers Inc. that already also has 2 projects under its portfolio with the Mandtra Residences and Pristina Towers. We added this 79-hectare portfolio, which will produce quality, resilient, future-proof communities in North Cebu. So located just 15 kilometers away from the Center. So it's a chance to showcase resilient design, truly green design and giving Cebuanos that security and safety near the city here. So we are in the planning stage of this development. And it will contribute revenue for the next 10 to 15 years for us with this project. And you can see now our mix of -- we're still predominantly horizontal with 75%, vertical 25%. And you can see because of that large land bank, Cebu has its back as our largest area for development. Next slide. So I'll report with some significant milestones, and we're really looking forward to getting your questions during the Q&A. So with CLI we usually like to end the year -- we will be the busiest towards the end of the year. So from only launching 2 projects in the first half, we added 4 projects in the third quarter and we have 3 more launches in the last quarter. So we have our Consolacion project. We're looking at another walk-up project in Mindanao. And we're looking at a new project in the heart of Cebu City besides our already sold out Calle 104. So we're looking forward to these 3 more launches before we call it a year. Next, please. Of course, we're very proud and pleased that our first international joint venture is now bearing fruit. We successfully launched the Wave Towers, a Japanese-inspired project with Cebuano values with a very distinguished partner in the NTT UD Group. Their professionalism has inspired us really work very hard on coming up with a strong product that has a good economic and social impact in Cebu. In less than 2 months, we already originated over PHP 2 billion of sales. And we really look forward to working with NTT UD and coming up with this successful project with them. Next, please. And this one, you can see here this is another project in the Davao Global Township where we sold PHP 2.5 billion of reservation sales in 2 days time. So right now, I think this is 70% sold for the real estate analyst here, we're already selling at over 200,000 per square meter in this Davao Global Township. That was at fixed volume of the agility we have from the economic to this. And we were the ones launching this volume and velocity of projects in our area. Next. So this is very important to me. I really ask the team to add this. CLI is conscious of its responsibility as a corporate citizen, as a Filipino company. During the earthquake, as I mentioned, all the properties we'll developed, whether it's high end or the socialized housing, we would still manage them. So you can see here that we have one socialized housing project in Bogo City, the very next day after earthquake we were there, delivering water and supplies. So this means a lot because personally, I would say, managed and directed so that resources are immediately deployed for this. Frankly, 0 structural issues of our 700 socialized housing projects in Bogo. And you can see these are my people from my property management team. I see Edgar here on the pickup. So in the recent typhoon Tino with the floods that affected many low-lying areas there, the most urgent requirement was really clearing to put into that passage of goods, services would be unhampered. So we're one of the first to deploy heavy equipment to areas like Danao, Liloan, Talisay, in some parts of Minglanilla. So this is really our -- the values of CLI that we really care about the communities, not just our subdivisions, but the communities where we operate as real partners. So we call on other companies to contribute to the ongoing efforts. Next. Yes, we're very happy with the recent awards. We're now recaptured both the besides the best developer. And we're very happy that we're considered best housing developer in the whole country. So we have to prove that, keep proving that. Our 2 Golden Arrow Awards are here and pleasantly happy to receive Employer of the Year Award from the PMAP with Employer of the Year exemplar now, one of the top 5 employers in the country. Next. So still #1 developer with a recent market study done by -- independently by Colliers here. So the next second place is 5%. So I believe that's a significant leadership attainment, the second place is with that gap from our 18% share. Next. So key investment message here. Now with what's going on as Grant reported, 2025 actually will be our record year in terms of reservation sales. We are already at PHP 21 billion. Our record is actually PHP 20 billion. So we already exceeded our record, and we still have 2 to 3 months to spare, and we'll end the projects with 9 projects worth at PHP 33 billion. Number two, no structural damage for our disrupted operations for the earthquake and Typhoon Tino. And I want to emphasize how CLI is really at the forefront of helping those affected and that's a priority for us and will continue to be a priority. Three, projects remain in high demand with 27% increase in residential sellers take up. So I really have to acknowledge the sales team, our partner brokers and agents and then all the buyers who continue to trust CLI. Fourth. So the Luzon pipeline. So we are -- we see a lot of good news on recovery in Luzon. Mid-market sales are inching up again. So we are slated to launch an NCR project in 2026 and one more in the Mega Manila area. So you see the rebound based on news reports and also our internal research and monitoring. So next, with that, Grant and I just really want to express that the results really speak of a lot of good news. There is optimism and we hope that CLI's results will convey that optimism to the market and do the analysts. So thank you very much.

Thank you so much Grant and Franco. We are now open for your questions. So for now, we just have a few advanced questions. Are we correct to assume that sales will be booked as other operating income moving forward? I think Grant will be the best one to answer this question.

I think that's not the normal assumption. The reason why these particular lot sales were booked as other income. And by the way, I will -- to complete the entire -- it's not just the sales that was booked as other income, but also the cost of sales that was attached to the sale of that lot. But you're seeing other income is actually the gross profit or already that is associated from that sale. And the reason why it was classified as such is because it's originally was in our books as an investment property. So the genesis or the back story on that is when we first built the balance sheet and planned for it, it was first ambition to be part of long-term investments where we put in offices or commercial spaces. But of course, as business environment evolves, when COVID hit, for example, there's a premium on cash flow rather than keeping too much long-term assets, and generating cash flow and generating sales from significant investments we have put into this township allows us to recover some of that capital and reinvest it in other projects. So these prioritizations and this recalibrations of business strategies always come about. So not necessarily that future lot sales will always be there. In fact, if anything, it's the other way around where we're strategizing and balancing how we want to reflect lot sales as part of our core business model because we'd still have land from our townships in Davao, in Cagayan de Oro and the Micro Township that Franco mentioned in the North as well as the Liloan expansion that we have, where we will be selling large, and we will just be more deliberate and intentional in how we classify those assets so that when -- if and when we decide to sell them or have the flexibility to sell them, we can reflect the property as revenues.

Okay. Next question is how is the sales takeup of the wind power storage.

Considered a premium project for us. We're already selling at close to PHP 300,000 per square meter due to its location in the Cebu IT Park now that come as the highest land values here. So in just less than 2 months of selling, we're already at 20% sold. That's around almost PHP 2 billion of sales. So we'll take it. I mean it's a 5-year construction project and to be at 20% sold in the first 2 months is better than the expectation we have. So there's a lot of inquiries. We believe that there's really some flight to quality in areas like the IT Park that are master planned with the best systems, drainage, underground tabling. It's really the best location for an urban investment.

Okay. Next question maybe can you share some color on the occupancy levels of your hotels?

Okay. So our hotel occupancy is averaging 50% to 60%. So this speaks for the City Hotel. So, so far, CLI has City Hotels in Citadines Cebu, lyf Cebu City and The Pad. And Bacolod would be our other City Hotel that's reaching over 60%. So I would say we wish it would perform better. Of course, as you know, the recent calamities have affected some of that occupancy levels. We're confident in recoveries on that. For example, when -- like in Bacolod the typhoon has affected the power there. So we were at full occupancy post-typhoon. And City of Bacolod still registers the #1 ranking of hotels in Bacolod. So -- and you don't see any new hotels. So we hope these occupancy levels will continue to improve towards the holiday season. So we can continue to do -- and we hope the momentum will carry into a better hospitality performance next year. So for -- on the leasing side, on average, we're at 75% to 80% occupied. So many of our leasing portfolio are new and being delivered to the market. So we have Astra Center that's 95% leased. But we have new projects like the City Center in DGT that are still at the 80%. We're very happy with it because we are also quite selective when it comes to our leasing tenants.

Great. Thank you so much, Sir Grant and Sir Franco. Another question will be coming from [indiscernible] It's a bit off tangent, but can the team provide more color or context into the nature of the recent SEC OGA assessment?

Yes. I appreciate that question. I'll take that on. Because -- okay, when you raise -- or when you register to lease bonds, you have to register with the SEC, right? The registration requires in conjunction with registering the prospectus, a reviewed financial statement. So normally, our second quarter financial statements will be unaudited and it would only be audited by the year-end. But this time around, it was reviewed by PNE and they spotted something in our FS that they recommended correcting and we accepted that correction. And the SEC also accepted that correction. So the first point or first color, I'd like to actually point out is that the numbers in the filing, the numbers in the registration statement and therefore, the numbers that are already publicly available and in the statements we provided, in the investment materials that we're giving are already amended and corrected. What the SEC OGA assessed us for was on the original filing anyway, which we corrected within a week. They said that the fact of the original filing when it had an inadvertent error that we voluntarily corrected, that was what the assessment was for. So just to clarify and to highlight the main point that it was a voluntary self correction. It was something that was already swiftly amended and corrected. So all the material that has been submitted and reviewed are already corrected. The next point is the OGA has already give -- has already given the clearance for the bond raising, for the registration. Again, I think that just underscores the point that they've also accepted our correction. And finally, this assessment has been settled today. So this is kind of fresh news, and we will disclose this, that we've had a quick discussion with SEC about this. We'll know how to do better, but that has been completely resolved already.

Thank you so much, Grant. Another question will be regarding our international partners NTT UD. Will there be another partnership with NTT UD in Luzon? So it was mentioned that -- there. So Franco, can you give us...

At the moment, our joint venture with the NTT UD Group is still with the Cebu project, The Wave Towers. Of course, with every joint venture, we want to prove ourselves to our partner. I hope they are very happy so far enough since in less than 2 years' time, we moved from an acquisition to a launch and now it's generating good revenue. That's -- we want to showcase the power of a Filipino company and how we can take good care of our foreign partners, of course. So in terms of if we're expanding more, once there are definite announcements and agreements for such, if there are any, we will definitely disclose with the public.

Thank you so much, Franco. Another question will be directed to Mr. Grant. The question is, based what you see in terms of percentage of completion and collection, how is 2026 shaping up in terms of growth and revenue recognition?

Well based -- remember that our financial statements are lagging indicators. So we already know, we can already practically see what kind of numbers will come up in 2026. Based on what we sold or the sales contracts we signed up from 2023, all the way to today at 2025. So all of these projects are marching towards -- with percentage completion contribution, collection patterns that we are seeing play out. So not to evade the question or for work around it. But we're looking -- we're seeing 2026 numbers grow at the same rate as 2025, probably in the single digits. Given that coming out of COVID, we deliberately made a decision to preserve some balance sheet and to make sure that we focus on project completions. And then with the intentional acquisition of such a large land bank in Liloan, plus other expansion plans, it's time to go back on growth mode. And we see -- we believe with the scheduled launches that we are planning in 2026 and beyond. You should see an assumption of quite good growth given that we're using the CapEx that we are spending today to acquire those lands, we launch more new projects that will contribute to POC or percentage of completion and revenues starting earnestly most probably 2027.

Thank you so much Grant. I think there's also another question. What are your key learnings in the recent earthquake incidents and the typhoon?

Yes. So I think the learnings is we need to always maintain high standards now. And we need to embrace a very high integrity approach because whatever high standards we design, it's really what we implement. And thankfully, that's always what CLI has been doing since the very beginning of our company. So 0 issues structurally, 0 flooding issues, 100% safety now for all our residents, employees, customers. So -- and I believe we've always been the type of company where we just don't need to meet standards, right? There's nobody stopping us from doing more than what is required. I think that's where CLI, you can make a drainage system bigger than what it needs to be. I mean, you can make a out fall even if it's outside your property, you can donate it and let's do it on our own so that it can help the community. So I think that's the kind of learning and it's validated because of our 100% safety record, both of these calamities because I know our Chairman, myself, our whole executive team, whatever standard we've designed, we've implemented and more. And I have big pride in that. We will continue to do so. And we hope our example inspires more to follow the same.

Great. Thank you so much, Mr. Franco. I think that's all for the questions now. So with no further questions, we can now wrap up the session. Do you have any parting words, Grant or Franco?

No, I think for us, 6% growth in consolidated net income, it's very welcome. As Grant has mentioned, it's still reflected very much beyond that. Now it's in the health of our receivables. The prudent management of our debt payables, our improvement in operating cash flow. So we're very pleased to report that. And for the analysts, we're very -- we welcome all your questions. If there was questions we were not able to address today, please feel free to communicate with myself, Grant or JR from our Investor Relations. So thank you always for monitoring us. As I said it's a very busy Thursday, but CLI is always happy to -- pleased to show you the potential of your investment and to show you that there's still a lot of opportunities available, and we're capitalizing on those opportunities here. So thank you again for tuning in. Grant, maybe -- you Grant?

Yes. I echo the gratitude and appreciation for you guys who are tuning in and following Cebu Landmasters. I mean we -- of course, it's our pleasure to do this regularly as need -- as required every quarter. And of course, every time we go to the market to raise funds. But we -- the story is very consistent. The trend is very stable, which is that the Philippines lacks good affordable housing. I think the typhoon, the earthquake only underscored how important, how meaningful is our mission. And I can't emphasize enough how big the backlog is. So we are -- in the overall scheme of things, we are but a small player. Yes, with #1 market share, but contributing less than 1% to the backlog that the Philippines has. So if you think about both the opportunity and the industry, we're going to sing the same tune over and over again. But it's a tune that we'll keep selling out, it's a tune -- it's a classic, right, it's an evergreen because housing will never go out of fashion. And it won't go out of fashion, it's a fundamental need that where we still have a lot of backlog. So we look forward to continuing that to building on our success in the markets where we have and expanding into other markets and other places in the Philippines where we know that we can do a lot of good. So thanks again for this, and we hope that we'll see you in our future analyst briefings.

Thank you, again.

Thank you, so much, everyone. Bye.