Robinsons Land Corporation (RLC) Earnings Call Transcript & Summary

Welcome to Robinsons Land Corporation's investors' briefing for the first quarter of calendar year 2022. Joining us today from RLC team are Mr. Frederick D. Go, President and Chief Executive Officer; and the rest of the IR team. RLC will give you a presentation on the company's unaudited results for the first quarter of 2022. [Operator Instructions] We will now proceed with the presentation.

Thank you for joining Robinsons Land Corporation's earnings call. We are pleased to share with you the continuation of our corporate journey by taking you through our unaudited financial results for the first quarter ending March 31, 2022, further discuss operational highlights, including our CapEx spending, provide updates on our digital and other initiatives, our growth plans and future strategies and conclude with an update on our ESG story, dynamic and unprecedented or what we would describe the current social economic [ environment ]. Despite this, we believe our business is by design, well-positioned to drive value it is claiming. We welcome the first quarter of 2022 with our 85 residential buildings, 53 lifestyle centers, 39 housing subdivisions, 28 office developments, 24 hotels, 20 mixed-use developments, 7 industrial facilities and 5 work.able centers. Pivoting now to the financial performance highlights. RLC inched closer to pre-pandemic levels and delivered PHP 1.7 billion in consolidated net income in the first 3 months of 2022, which is 94% of the recorded profit in the first 3 months of 2018. This performance was mainly driven by the accelerating recovery of the investment portfolio led by the malls and office businesses, including the contribution of the company's property development portfolio. Consolidated EBIT fell 21% to PHP 2.4 billion year-on-year on the back of a 60% decline in total revenue to PHP 6.7 billion. Had a 13% drop in overall EBITDA to PHP 3.7 billion. Recall that in the first quarter of 2021, RLC booked PHP 10.5 billion in revenues from its Chengdu project in China following the completion of handover activities for Phase 1. In addition, it recorded a significant reduction in its provision for income tax arriving from the reversal of deeper tax liability with the enactment of CREATE. Removing the high base effects of these two items, consolidated net income would have accelerated by 29% while total revenues, EBITDA and EBIT from domestic operations would have propelled by 6%, 12% and 17%, respectively. On a quarter-on-quarter basis, RLC continued to build momentum with a 40% sequential growth in consolidated operating income or EBIT supported by a solid 18% increase in total revenues and EBITDA for the first quarter of 2022 against the fourth quarter of 2021. RLC investment portfolio continued to rebound strongly with a double-digit top line growth for the first 3 months of the year, led by the mall and office businesses, revenues jumped 19% to PHP 4.9 billion to contribute 74% of total revenues, 85% of overall EBITDA, 78% of consolidated operating income and 72% of net income. Meanwhile, the company's property development portfolio generated PHP 1.8 billion in realized revenues in the first quarter of 2022 registering a decline of 86% due to the recognition of revenues from China last year, as mentioned earlier. The company is expecting to match this with revenues from Phase 2 which will be recognized in the succeeding quarter. From a balance sheet perspective, RLC's financial position is as strong as it has ever been, with total assets of PHP 222.5 billion, which includes cash of about PHP 10 billion. Shareholders' equity landed at PHP 128.3 billion, net of PHP 1.5 billion of treasury shares from the company's buyback program, which commenced in November 2021. Outstanding debt declined to PHP 41 billion from PHP 47 billion as of December of 2021 due to the repayment in February of a 7-year bond with a principal amount of PHP 10.6 billion and availment of short-term loans amounting to PHP 5.2 billion. This resulted to a gearing ratio of only 26% as of March. Meanwhile, earnings per share for the first quarter posted at PHP 0.27 per share. Moving on to the performance of each of our business units, starting with Robinsons Malls. Improved consumer spending and retail sales lifted more revenues by 19% year-on-year and quarter-on-quarter to PHP 2.7 billion to account for 40% of total revenues. EBITDA jumped 32% to PHP 1.5 billion, while EBIT surged 146% to PHP 550 million year-on-year. Robinsons Malls continues to assert itself as the second largest mall operator in the country highlighted by its 53 licensed centers spanning 1.6 million square meters of leasable space, which is 91% leased by over 8,000 retailers. We are pleased with the recovery trajectory of our mall operating fundamentals in the first quarter with operational GLA at 74%, number of operational tenants at 88% and footfall at an impressive 75% of pre-COVID levels. The [indiscernible] volumes as far as the fundamental strength of our mall portfolio that is very much consumption driven. We are also encouraged that these performance indicators will continuously improve over time, making Robinsons Malls well-positioned to recapture growth and take advantage of the improved business environment. Earlier this year, we have unveiled our plans to redevelop 4 of Robinsons Malls located in [indiscernible] city to build 4 prime office developments anchored on an upscale lifestyle mall in the prime [indiscernible], with total leasable space increasing tenfold to 300,000 square meters. And its undeniably strategic location, the redevelopment will crystallize the properties through earning potential and profitability. Robinsons Offices delivered stable top line results with a 12% growth in revenues to PHP 1.8 billion in the first quarter. This stable performance is primarily driven by the strength of its portfolio, which consists of 28 quality assets spanning across 688,000 square meters of leasable space in strategic locations, boosted by the successful leasing activities in new buildings, namely Cyber Omega in Ortigas Central, Cybergate Iloilo 1 and Bridgetowne East Campus One. EBITDA rose 23% to PHP 1.5 billion, while EBIT grew 28% to PHP 1.3 billion. Underpinned by the easing of travel restrictions and the reopening of the country tourist destinations, Robinsons Hotels and Resorts or RHR, exited 2021 revenues by 30% to PHP 335 million. On the other hand, pre-operating expenses weighed on EBITDA and EBIT, which closed at PHP 39 million and negative PHP 74 million, respectively. RHR is the largest hotel developer and operator in the Philippines in terms of number of properties with 24 hospitality developments plus 4 properties under franchise agreements comprising its multi-branded portfolio. Laying the groundwork for the dissipated resurgence of the tourism sector, RHR completed Go Hotels Plus Naga, Go Hotels Plus Tuguegarao and Summit Hotel Naga in the first quarter, bringing total room keys to over 3,400 rooms. New project launches with the combined net sales pickup of RLC Residences and Robinsons Homes represented by the blue and red columns by 3% to PHP 2.9 billion as in the first quarter. Meanwhile, net sales takeup from joint venture projects with Hong Kong brand Shangri-La, and DMCI represented by the yellow column, outperformed the previous year by 19% to PHP 1.9 billion. On the other hand, realized revenues dipped 31% to PHP 1.4 billion year-on-year on the account of higher cancellations versus the first quarter of last year. On the other hand, EBITDA and EBIT fell 43% and 44%, respectively, mainly due to higher advertising and promotion expense from the new project launches. On a quarter-on-quarter basis, though, the combined realized revenues of RLC Residences and Robinsons Homes more than doubled and achieved a 166% uptake on the account of higher [ whole ] equity sales and much improved level of cancellations compared to the fourth quarter of 2021. To expand further, gross realized sales in the first quarter of 2022 was 21% higher versus the fourth quarter of 2021, while cancellations were 50% lower quarter-on-quarter. EBITDA was likewise better by 137% quarter-on-quarter. In the first quarter this year, RLC launched three projects worth approximately PHP 6 billion, mainly AmiSa Private Residences Tower D, Sierra Valley Gardens-Building 3 and Woodsville Crest – Pine Building. AmiSa Private Residences is the very first upscale resort [indiscernible] leisure condominium development of RLC in Mactan Cebu. Situated right across the Dusit Thani Mactan Cebu five-star hotel, AmiSa [indiscernible] is inspired by Australia's Gold Coast and AmiSa features launched landscaping and then it is perfect for a weekend home and personalized building management services. Sierra Valley Gardens is [indiscernible] 12-tower residential condominium development cupped within Sierra Valley. Sierra Valley is RLC's large master-plan Destination Estate located along Ortigas avenue expansion in Cainta, Rizal. Woodsville Crest is an 8-tower residential development located in [ Paranaque ], which promises to serve as an oasis south of the metro. It brings together [indiscernible] by design, smart and sustainable home features, upgraded amenities and meaningful connections all in one. With a strong performance in the first quarter, RLC continues to make significant strides with its JV projects, registering healthy sales take-up across all 3 projects. [indiscernible] over 2 years from launch date. Aurelia is already 63% sold, Velaris at 44%, and Sonora at 38% as of March 2022. System-wide take-up rate is already at 57%. Total inventory value of all 3 projects was PHP 58.9 billion. RLC expects to book significant earnings from its JV projects in line with construction completion and sales take-up. We made significant progress in our pursuit of becoming a market leader in the logistics space. We have completed 7 industrial facilities to date, and we are just starting for scale with most of the upside opportunities ahead of us. In the first quarter, we doubled our industrial leasing revenues relative to last year, to PHP 135 million. EBITDA soared to 161% to PHP 111 million, while EBIT propelled to 167% to PHP 78 million. Under the Integrated Developments division, we are set to complete the interchange exit in Montclair near Clark Freeport Zone by mid-2022. We have also launched several residential projects and leased out the retail spaces in Sierra Valley. Furthermore, we have started the land development of Bridgetowne East. Meanwhile, PHP 57 million of revenues from the sale of [indiscernible] for joint venture [ entities ], which is a portion of the [indiscernible] sale on the previous sales we recorded in the first quarter. EBITDA and EBIT landed at PHP 17 million and PHP 16 million, respectively. Our Chengdu project in China is expected to boost earnings this year as Phase 2 is near completion and with total project already 96% sold. As mentioned earlier, RLC booked PHP 10.5 billion in revenues from Phase 1 in 2021. And the company plans to match this with revenues from Phase 2. Furthermore, the remaining USD 25 million of RLC's USD 225 million capital is expected to be the [indiscernible] within the year. As seen on this slide, sales take up totaled RMB 3.3 billion or more than PHP 25 billion. Remaining inventory consists of just the shophouses and carparks amounting to RMB 138 million or about PHP 1.1 billion. For the first 3 months of 2022, RLC spent PHP 5.3 billion in capital expenditures for the development of malls, offices, wholesales and warehouse facilities, acquisition of land and construction of its residential projects for its local operations. This is equivalent to 21% of RLC's PHP 25.5 billion CapEx budget for the fourth year. We reached out [indiscernible] as well that as of March 2022, RLC has already reinvested about 46%, of its PHP 22.9 billion IPO proceeds in accordance with its reinvestment plan. To support our expansive growth plans, our landbank now spans more than 800 hectares with the crystallization of land bank values in our Bridgetowne Destination Estate following the recent line sales, our land book value is estimated at about PHP 133 billion as of March 2022, 66% of which or PHP 87 billion is attributable to the landbank value of our Destination Estates. We continue to build sustainable communities that is follow the lean workplace [indiscernible]. Currently, our Destination Estates portfolio is composed of the 31 hectares-Bridgetowne, spanning the border of Quezon City and Pasig City; 18 hectares-Sierra Valley located in Cainta, Rizal; and the 200 hectare-Montclair located in Porac, Pampanga Moving on, we are positioning ourselves for the future by expanding our digital footprint and investing in various initiatives. Leveraging the reach of our strong omnichannel platform, we have introduced innovative advertising and marketing campaigns for our Residential Division as shown in the slide. For Robinsons Hotels and Resorts, all our hotel properties are now with Whyqueue, the Global Hospitality Solutions [indiscernible] e-commerce platform that specializes in voucher management. We have also successfully launched our RHR website and expanded available online payment channels to include Grab Pay, Shopee Pay, and Paynamics. Now for the path forward. This year, RLC plans to expand its Antipolo Mall and open Robinsons Place [indiscernible], which will raise gross leasable area to 1.63 million square meters. Next year, mall footprint will reach 1.7 million square meters with the opening of Opus and Robinsons Place Pagadian. Opus is a luxury model which will rise in Bridgetowne Estate while Robinsons Place Pagadian will be located within the vicinity of the City Capital and [indiscernible]. This year, we have a robust office pipeline consisting of Cybergate Galleria Cebu, Cybergate Bacolod 2, and Cybergate Iloilo 2 which will push net leasable space to 741,000 square meters. Next year, we plan to complete GBF-1 located in Metro Manila for a 7% growth in NLA to 793,000 square meters. Our Logistics and Industrial Facilities division delivered 167,000 square meters of industrial space in 2021, and with the combination of 3 new industrial facilities. There are no planned completions in 2022 yet. But in 2023, we target to complete another industrial facility in Calamba which should propel GLA to about 199,000 square meters. Our Residential Division successfully launched PHP 6 billion worth of projects and [indiscernible] PHP 2.9 billion of net sales in the first quarter. It is gearing up to launch more projects this year depending on market conditions. Lastly, Robinsons Hotels and Resorts, is on its track to deliver a 14% increase in hotel [indiscernible] this year with the opening of Summit Naga, Go Hotels Plus Naga and Go Hotels Plus Tuguegarao in the first quarter. Slated to open in the succeeding months are some rooms in Fili Urban Resort hotel, which is our luxury hotel in Cebu and the remaining rooms of Summit GenSan. In 2023, RHR targets to end the year with over 4,400 rooms with the opening of its second luxury [indiscernible] hotel in Cebu, NUSTAR Hotel. It will also open its fourth international branded hotel, Westin, and it plans to open the remaining rooms of Fili Urban Resort hotel. We are pleased to share that we have reduced our 2021 sustainability report through our website at www.robinsonsland.com. It highlights the value creation for key stakeholders and the company's strategies in becoming a surely sustainable corporate citizen. It also reflects the unwavering commitment of RLC to ESG standards with a focus on the challenges of sustainability amid the COVID-19 pandemic. We are focused on running our business the right way, and we have a long-standing commitment to ESG stewardship, including a strong environmental platform, diversity and inclusion strategy and focus on giving back to communities. Lastly, RLC reinforced its commitment to drive shareholder value as it returns a significant amount of capital to shareholders via a share buyback program, number one; and number two, by a dividend. As of March 2022, the company has already repurchased PHP 1.5 billion worth of shares, equivalent to 50% of its PHP 3 billion buyback program launched last November 2021. Furthermore, as a center piece of our shareholder return policy, we shall be distributing cash dividends on May 23, amounting to over PHP 2.5 billion or PHP 0.50 per outstanding share in 2022. This is double the amount of dividend we distributed in 2021. With its consistent dividend payout streak, the Philippines Stock Exchange has announced the inclusion of Robinsons Land in its PSE dividend yield index. This thematic index includes 20 publicly-listed companies with the largest 3-year average dividend yield and these companies must have all passed the PSE free float and liquidity requirements. This ends our presentation. We now open the floor for questions. Thank you very much.

[Operator Instructions] Our first question comes from the line of Mr. Carl Sy.

Let me just check first if you can hear me.

We can hear you, Carl.

Great. So excuse me, I have a number of questions. I'll start off with the mall business. So there has been an accounting change, right? So it's hard to compare current mall revenue with revenue from 2019. So if -- I don't know if you have such a comparison, let's say, for the first quarter '22, mall revenue. How would that -- if you can have the same accounting regulations, how would that compare to the average of 2019?

So we did a pro forma calculation of how much mall revenues would be, had the new accounting adjustments being implemented or new accounting standards being implemented in 2019. So on the average, the qualitative mall revenues would have been up approximately PHP 4 billion.

Okay. And then, again, with respect to the mall foot traffic that you present here, let's say, the 75% multiple traffic. So -- if I understand correctly, so let me know if I'm right or wrong here, the 75% is an average of the period. So that includes January, which was hampered by an Omicron related lockdown. Is that correct?

The 75% is as of March 31, 2022.

Okay. So it's only a March number. It's not an average for the first quarter.

That's right. It's as of. Yes.

It is as of March. Okay. And then for the office business this time. Could I ask for -- could you tell me for the upcoming buildings, can you tell me the pre-leasing levels?

Carl, for Cybergate Iloilo 2, we have already leased 2 floors. So that accounts for 24% pre-leased percentage. And then for Cybergate Bacolod and the other projects, we are still aggressively marketing the spaces to secure sign-ups.

Got it. And for your renewal, whether new contracts or renewals on the existing portfolio, to clarify, again, you first have not lowered rents. So you still have positive rental reversions. That's one. And I guess another question is, so for instance Concentrix was in the news recently saying that it would be willing to [ use ] incentives in order to retain the work from home scheme. And I believe RCR has a good amount of space leased to Concentrix. So I'll ask whether first -- whether Concentrix or any of your other office tenants have said anything about wanting to eventually reduce their office footprint with you guys because of work from home or for any other reasons.

Okay, Carl, for your first question, for the office renewals, we have not lowered the rent we were able to renew leases at least on a flat rate or with minimal increase. And then on your next question regarding Concentrix and the question if whether we have received a request from BPO companies or other tenants asking to basically reduce spaces because of the recent news. Fortunately, for RLC and RCR, we have not received any such request and we are very fortunate that our tenants get to stay to their spaces. In fact, some of our BPO tenants have ongoing discussions for expansions, if not have expanded in some of our office buildings. In the case of Concentrix, we've actually spoken to our contact. And we said that the -- if they will allow tenants to continue work from home is basically client dependent. So if the client is agreeing to a work from home set up -- then for that particular -- for those employees catering to that client, they may continue to work from home setup but majority for their accounts, which are basically in the finance or high-control value chain, the clients are still requiring their employees to basically report to the office.

Okay. So okay. And then on the residential business this time, so I'll ask about cancellations. Would it be correct to say that for the first quarter '21 and second quarter '21, cancellations were practically 0. Will that be fair, approximately fair?

Yes, Carl, that would be approximately fair.

And could you tell me -- and I'm sorry, if you don't have this right now, I can ask for it at another time. But let's say, for third quarter, fourth quarter and first quarter this year, can you tell me the cancellation numbers?

Carl, the cancellation -- are you referring to cancellations of net presales or realized revenues?

Let's go with realized revenues for now.

What we currently have right now is the cancellations for the fourth quarter of 2021. It was about PHP 2.8 billion. And then it declined to PHP 1.4 billion in the first quarter of 2022.

Got it. So I understand if you don't have third quarter right now, but you say it would have been a larger number than PHP 2.8 million.

The PHP 2.8 billion is larger than the third quarter number.

Okay. So it was -- okay. So third quarter was some number lower, okay? And do you have the back out rate for -- on the -- at the net presales level. Sorry, the net sales take up, I could refer that.

Carl, yes, that's one we don't know. I mean we always declare the net presales number which is already...

So it's -- yes, that would have been my other question anyway. So that this is as stated, a net number.

Yes, we always declare the net for the last, I guess, 20-plus years, yes.

Sure. And on -- I think Cat mentioned earlier, that earnings would have accelerated because of certain things. I just want to make sure because from my computations, at least just removing gains from last year, I think earnings would have still dropped. But I assume when Cat said something about accelerating earnings, that includes removing the China revenue from last year.

That's right.

That's right.

Okay, that's the reason. So I might have misheard earlier.

Our next question comes from the line of Jelline Gaza.

I have three questions, all relating to the mall business. The first one is -- I'd like to ask about the extent of rental concessions that you're granting your tenants on average in the first quarter. And how has this changed as of late given the broader reopening? The second question relates to the operational GLA. I noticed that despite the reopening, it has stagnated at about 74%. Why is that the case? And how do you collect if ever if any, rents from these non-open tenants? And then third question on malls is on the [ Forum ]. Will there be a significant impact or noticeable impact with the closure of Robinsons [ Forum ].

For the rental concessions, in the first quarter, it [indiscernible] in January, we had the Omicron. So the discount there was higher. It was basically in line with the other developers and sellers, which is about 50%. Then as we move February and March, also it adjusted. It varies depending with the industry with a particular month and the type of tenant that's affected. That's for the rental concession. It's in line with what the other developers were offering. Now on the reopening, yes, currently, the operational GLA is at 74%. A large part here comes from the cinema operation. So right now, we have cinema operations in 20 of our malls. 40 screens are operational. So we have about 160 screens that are not yet operational in terms of cinemas. Then the other tenants that are not just operational. Some of these are the churches. Some of them are the children's playgrounds. But we see them more opening in the coming months. Actually this quarter, we saw more openings coming up in the second quarter.

Just as a follow-up on the second question -- or in the first question, would you be able to give clarity as to the extent of change during the Omicron surge and during the last 2 months of the quarter in perhaps as of late, like May and April.

I think we don't give the exact percentage. But then basically, it's much -- it could really range from broadly 30% to 50%. It varies. It varies basically, depending with the area and the industry.

Okay. So to make sure that I understand correctly to the most aggressive 30% discount compared to 50%?

Yes. That's right.

Okay. How about the [ Forum ] impact?

Okay. The [ Forum ] impact will be minimal now because -- during the pandemic, it was already -- the operations have been winding down in 2021 and 2022. So the impact should be less than -- I don't have a...

Just for context, in the first quarter of 2022, the rental revenues at PHP 36 million. And for 2021 full year, that's about PHP 180 million.

Our next question comes from the Q&A box from anonymous. Number one, what was the mall occupancy rate by the first quarter of 2022? And the second question is, what are the launches in value and in terms of units in the first quarter of 2022?

For the first one, the lease percentage of Robinsons Malls as of March 2021 was 91%. On your second question in this slide, we are showing the sales value of each of the projects -- residential projects that we launched in the first half as well as the sales take up. ?

[Operator Instructions] Our next question comes from from Mr. Wilson Ng. The question is how much do you expect reservation sales to improve for the rest of the year? Do you plan to launch more projects before the end of 2022?

For residential, we are -- basically, we are guiding net presales of about PHP 15 billion for the year.

Our next question comes from the line of Mr. German de la Paz. The first question is on Chengdu, should we expect the same PHP 10.5 billion revenues to be booked this year, which quarter should it be booked? And should we expect the same net income impact of around PHP 730 million? The second question is, what is foot traffic for April and May?

So for Chengdu, we would expect in 2022 in the same level as 2021 and we would probably expect this to be booked in the first half of this year. For the foot traffic, currently, it's about above 80%. We see that the provincial malls are rebounding faster, and, in the areas where there's a strong residential market.

Our next question comes from an anonymous attendee. The question is, clarification on what's the first quarter core and normalized net income growth figure.

Okay. Removing the effects of the reversal of provision from income tax arising from the enactment of CREATE as well as revenues from China. Net income would have been PHP 1.66 billion in the first quarter of this year. Last year, it would have been PHP 1.3 billion. So that's actually an increase of 23%.

Our next question comes from Carl Sy. What was unsold residential inventory as of the first quarter of 2017?

It is about PHP 25.7 billion, Carl.

Question from Mr. Marc Espino. A clarification on cancellations in the first quarter of 2022, residential bookings, cancellation was just PHP 1.4 billion.

Yes, that is correct. Cancellation of realized revenues in the first quarter 2022 was PHP 1.4 billion.

Question for Mr. German de la Paz. Should we expect more cancellations in the next quarters?

Yes, we would expect cancellations in the next quarters until the end of the year.

We have another question from Ms. Jelline Gaza.

I just have a follow-up on the presales' guidance. So this implies about 40% year-on-year growth from your full year '21. I just wanted to understand where -- how -- where the growth will come from? Are you more bullish now in terms of residential launches having launched almost PHP 6 billion compared to your PHP 10 billion target for the year? And any indications in terms of locations, type of projects will be appreciated.

PHP 15 billion net take up guidance for 2022 is actually almost aligned with our 2018 net sales take up. Now for the first quarter, we've already launched approximately PHP 6 billion worth of projects, in which we yielded PHP 2.9 billion of net sales take up. For the remainder of the year, we have a couple of projects that we have in the pipeline, which would bring us closer to our PHP 15 billion sales take up for [indiscernible]

Cat, just to confirm, the additional projects, meaning the launches that are in the pipeline will equal the net presales. Is that understanding correct?

Not necessarily.

Not necessarily, but close to that.

What we're saying is that the [indiscernible] launches that we have in the succeeding months, [indiscernible], the net sales take up in the coming...

Question from an anonymous attendee. A clarification on the payment of the 50 [indiscernible] dividend, I thought I heard May 23 as the payment date. But I remember the last disclosure as of May 13.

The payment date is May 13.

We have a question from Mr. Carl Sy. What was the average quarterly residential cancellation in 2019?

Carl, in 2019, average cancellations for the entire year was less than 20%. By cancellations, I am referring to the net sales take up. So at that time, we were able to keep it around 20%.

We have a question from anonymous. What is the magnitude of cancellations you are expecting in the next few quarters?

Our strategy is to be able to book a significant amount of sales take up in order to compensate for whatever cancellations we may be booking in the succeeding months. So that is why we are guiding net sales take up of PHP 15 billion.

[Operator Instructions] We have a question from Mr. Carl Sy.

I'm just checking again if you can hear me?

Yes, Carl.

Great. So on my question earlier about residential cancellations. So you did mention, Cat, it was within 20% of net sales take up. So I want to check, let's say, the PHP 1.4 billion of cancellations, as it's not like the sales take up level that's realized revenue level. So I want to get some idea if PHP 1.4 billion is an unusually high number or normal number or even low number? Could you give me some color on that one?

Well, relative to gross sales, it's definitely high, relative to gross sales.

Remember, Carl, it's unusually -- it's a bit -- the cancellations are initially high because these were pent-up cancellations, and not cancellations in the normal course of business.

That's right.

[Operator Instructions] We have a question from anonymous. If cancellations in the fourth quarter of 2021 was at PHP 2.8 billion, what was the figure in the third quarter of 2021?

We answered this question earlier. We said that it's lower than the PHP 2.8 billion of cancellations in the fourth quarter of 2021, although we don't have the exact number as of right now. So you could reach us individually or via our -- via email so that you could revert back to your question.

We have a question from anonymous. Do we have any color on the status of canceled units? Were RLC able to resell these [indiscernible]? What strategies are you taking to manage these?

Sure. On the cancellations of the -- on the units that are being -- these are being brought back to the inventory at the current market rates. So meaning to say we get an upside on the total contract price that we are able to sell at to the potentially new buyers.

[Operator Instructions] If there are no further questions, I will now hand over to Mr. Frederick D. Go to give his closing remarks.

Thank you again, everybody, for this call. My apologies. I'm traveling right now, so unable to have a stable signal and [ to have replied ] all your questions personally. But again, thank you very much, and we'll see you again next quarter. Thank you.

Thank you, everyone, for your participation. You may all disconnect.