Robinsons Land Corporation (RLC) Earnings Call Transcript & Summary

The 2022 Annual Stockholders Meeting of Robinsons Land Corporation will now begin. Good afternoon, ladies and gentlemen. We will now play the Philippine National Anthem. [Presentation]

Good afternoon, ladies and gentlemen. Thank you for coming to this meeting. May I request the Corporate Secretary to please certify on the sending of notices to the stockholders and to the existence of a quorum for this meeting.

Mr. Chairman, I hereby certify that notice of this Meeting has been sent to the stockholders of record as of April 4, 2022, via the following methods: #1, by publication in the Manila Standard and BusinessMirror on April 18 and 19, 2022, in both online and print formats; #2, by posting on the website of the corporation; and #3, by disclosure to the Philippines Stock Exchange. Thus, the stockholders have been notified of this meeting in compliance with applicable rules and regulations. I hereby certify that they are present in this meeting via remote indication or by proxy, stockholders entitled to vote representing 83.33% of the corporation's total outstanding shares and that this meeting is therefore competent to transact the business provided for in the agenda. A quorum is present, Mr. Chairman.

There being a quorum, the Annual Meeting of the stockholders of Robinsons Land Corporation is hereby call to order. May I request the Corporate Secretary to share with us the rules and procedures for this meeting?

The rules and procedures are set forth in the information statement and in the explanation of agenda items integrated into the Notice of Meeting. All tabulation results for this meeting are subject to validation by the accounting firm of SyCip Gorres Velayo & Company. For the information of the stockholders who are with us now during this broadcast, the corporation has requested stockholders to send their questions or comments by e-mail. Questions which we received by May 4 2020 have been collated and selected questions will be answered later in this meeting. The corporation will reply to the questions and comments not taken up during this meeting through e-mail.

Let us now proceed to the next item in the agenda, the approval of the minutes of the 2021 Annual Meeting of the Stockholders. May I call on the Corporate Secretary to present the results of voting for this agenda item?

Mr. Chairman, copies of the minutes have been distributed to the stockholders by providing the link to the said minutes in the information statement and by showing the QR code on the screen prior to the meeting. The minutes have been approved and submitted by votes representing 83.33% of the total outstanding shares of the corporation.

Thank you. The minutes are hereby approved as presented. Moving on to the next item in the agenda. I may now call on Mr. Frederick D. Go, President and Chief Executive Officer of the corporation, to present his report together with the audited financial statements for the preceding fiscal year. Mr. President?

Thank you, Mr. Chairman. Good afternoon to distinguished members of our Board and fellow shareholders. 2021 was a year of strategic milestones for Robinsons Land Corporation, especially with the listing of our RL commercial REIT or RCR, our flagship real estate investment trust. As the effects of the global pandemic raged on, RLC braved headwinds to sustain business operations. I am pleased to report today RLC's financial and operational performance highlights for calendar year 2021 and our sustainability initiatives as well as future plans. As we look back on the past year, we remain inspired by the dedication and resilience of the entire RLC organization in its pursuit of several growth initiatives. We successfully ended 2021 with a strong portfolio of 82 residential buildings, 53 lifestyle centers, 39 housing subdivisions, 28 office developments, 21 hotels and resorts, 20 mixed-use developments, 7 logistics and industrial facilities and 5 work.able centers. Amid enhanced quarantine conditions, RLC mark the historic listing of RL Commercial REIT, Incorporation. RCR made the successful debut on the Philippine Stock Exchange as the country's largest REIT in terms of market capitalization, asset size and portfolio valuation. It holds the record of having the widest geographical reach, spanning 9 cities and the longest land lease tenure of up to 99 years. The landmark offering grew an overwhelming response from the capital markets, attracting strong institutional and retail interest for its size and liquidity. We are thankful to the investing public for this expression of confidence in the Robinsons Land brand, reputation and track record. The RCR IPO was named the best IPO in the Philippines at the 2021 Asset Triple A Country Awards. The asset's annual recognition represents the industry's most prestigious awards for banking, finance, treasury and the capital markets. RCR also emerged as the Philippines' sustainable REIT in the 2022 International Investor Awards and was included the FTSE Global Equity Index Series for Asia Pacific. In the most significant single event in the company's recent history, the listing of RCR unlocked the intrinsic value of RLC's office assets and opens many future opportunities for the company. The proceeds of PHP 23.4 billion from the IPO will be reinvested by RLC into its various business units and a strategic land banking program that will drive long-term profitability. Capital raised from the RCR IPO further strengthened RLC's financial position. Total assets posted at PHP 227.9 billion and shareholders' equity expanded PHP 130.3 billion. Its net gearing ratio of 23% is an industry low while earnings per share reached PHP 1.55, 53% higher than last year and about 93% of pre-pandemic record. Dividends remain the centerpiece of our shareholder return policy. In 2021, we paid out more than 20% of the company's net recurring income. Furthermore, as part of our key strategy in preserving and enhancing shareholder value, we have launched PHP 3 billion share buyback program, which underscores our confidence in RLC's growth prospects. Notwithstanding the volatility of economic uncertainty, RLC delivered robust financial results. For the calendar year 2021, consolidated revenues increased 30% to PHP 36.5 billion, with strong organic growth fueled by improved customer demand across RLC's core businesses. The sale of parcels of land within Bridgetowne East Destination Estate and the continued success of the Chengdu Ban Bian Jie project in China. EBITDA grew 9% to PHP 15 billion, pushing overall EBIT up by 14% to PHP 9.7 billion. This translated to a consolidated net income of PHP 8.5 billion, 62% greater versus the same period last year. Furthermore, our investment portfolio accounted for 45% of revenues, 68% of EBITDA, 51% of EBIT and 47% of net income, while our development portfolio contributed the balance. While business conditions improved in most of 2021, the surging cases of new coronavirus variants in the second and third quarters led to the subdued recovery in the retail and hospitality secors. Robinsons Malls generated 23% of total consolidated net revenues at PHP 8.3 billion, 3% lower versus 2020, while EBITDA dropped 6% to PHP 3.9 million. Meanwhile, additional depreciation from new malls reduced EBIT by 53% to PHP 191 million. In quarter of 2021, under a more relaxed quarantine classification, mall revenues grew as foot traffic increased to 65% of 2019 levels from a low of 20% in 2020. Operational gross leasable area and operational tenants also improved to 74% and 87% of pre-COVID levels. Mall operating fundamentals are expected to rebound strongly in 2022 as widespread vaccinations along with pent-up demand spur in-store shopping and revenge spending. In response to the increasing role of technology and customer lifestyles, we focused on enhancing the shopping experience by scaling our digital capabilities. Robinsons Malls launched MallDash, a hyperlocal online shopping platform that enables customers to purchase from multiple Robinsons Malls partner tenants in a single transaction. With its quick on-demand delivery service, MallDash enables easy, safe and convenient shopping. In addition, Robinsons Malls introduced the RMalls+ app to create seamless online-to-offline customer journeys. In 2021, Robinsons Malls has steadily grown its presence in the country. Total GLA increased to 1.6 million square meters with the reopening of Robinsons Place Tacloban, expansion of Robinsons Place Dumaguete and the opening of Robinsons Place La Union. Featuring surfing decors and ocean murals, Robinsons Place La Union is the biggest mall in the province with a wide variety of fashion outlets and dining establishments. Robinsons Malls closed 2021 with a system-wide lease rate of 91% across 53 lifestyle centers nationwide. With the gradual easing of travel restrictions and the reopening of some tourist destinations, Robinsons Hotels and Resorts received demand for quarantine accommodations and long-stay bookings. Revenues rose 11% to PHP 1.2 billion versus a year ago. EBITDA accelerated 60% to PHP 246 million on the back of operational efficiencies, while depreciation from new hotels dragged EBIT to a loss of PHP 173 million. To attend promptly to concerns of customers, we have set up our social media response team. We have added digital billing platforms and payment options. There's also an ongoing development of our website and mobile app. In addition, IHG launched virtual focused selling events and its e-commerce platform for food and beverage via crowneplazamanila.com. As the worst effects of the global pandemic [ ebb ], Robinsons Hotels and Resorts opened its maiden property under an upscale version of its own homegrown brand, Grand Summit Hotels, located in the Tuna capital of the Philippines, the first Grand Summit in General Santos was formally unveiled to the public last October 2021. It welcomes guests to the grand lifestyle through deluxe rooms and suites, a fine array of amenities and services and exceptional cuisine in Cafe Summit. Conveniently located beside Robinsons Place GenSan, Grand Summit Hotel is the best choice for a complete upscale hotel experience in General Santos. Robinsons Hotels and Resorts ended 2021 with over 3,200 keys in across 21 company-owned hotel and leisure properties. Moreover, there are 4 Go Hotels with 800 rooms under franchise agreements. Sustaining top line results on the back of a resilient BPO industry, Robinsons' office has finished the year strong and contributed 18% to consolidated revenues, stable and high occupancy rates across existing assets as well as rental escalations carried revenues to a 9% growth to end at PHP 6.5 billion. EBITDA closed at PHP 5.7 billion, while EBIT ended at PHP 4.7 billion, up by 11% and 13%, respectively. We have expanded the breadth of our office portfolio with the opening of the PEZA registered Cyber Omega in Ortigas, Cyber Iloilo Tower 1, and Bridgetowne East Campus One. 2021 close to the 93% system-wide lease percentage across 28 office developments, spanning approximately 688,000 square meters of net leasable area. Meanwhile, our flexible workspace business under the work.able brand continued to operate 5 sites in Pasig City, Quezon City and Taguig City with a total of about 1,200 seats. With its 7 industrial facilities, Robinsons Logistics and Industrial Facilities, or RLX, capitalized under rising opportunities in the logistics sector, which served as a bright spot in an otherwise battered economy. RLX achieved a 50% surge in revenues to PHP 354 million. Similarly, EBITDA and EBIT climbed 76% and 89% to PHP 324 million and PHP 249 million, respectively. Capitalizing on the emerging market opportunities in the logistics real estate sector, RLC added over 73,000 of GLA in Pampanga and in Muntinlupa. Our logistics and industrial facilities portfolio now has a total of 167,000 square meters of leasable space today. Meanwhile, Robinsons Land crystallized the value of its destination estates from the sale of 2 prime lots to Shang Robinsons Properties, Inc. and RHK Land Corporation, 2 of the most recognized real estate names in Asia. Realized revenues reached PHP 3 billion in 2021, yielding an EBITDA of PHP 1.6 billion and an EBIT of PHP 1.5 billion. SRPI and RHK acquired a total of 2.6 hectares of land inside the 31-hectare master plan Bridgetowne Destination Estate. The investment from 2 of the most respected and recognized real estate names in Asia during this time of economic uncertainty exemplifies a vote of confidence in the estate's future growth prospects. After 3 decades of growth and expansion, Robinsons Land residential arm embarked on a rebranding strategy for its vertical developments. In 2021, it launched RLC Residences, a single integrated brand identity that empowers Filipinos to grace, race live and connect through beautiful, well-designed homes. With the simplified structure and the merging of resources, we expect to increase brand mind share and deliver improved seamless customer journeys. Net sales take up excluding from those joint venture projects escalated by 48% versus the same period last year to PHP 10.8 billion. Growth was primarily driven by the notable performance of Sync Y-Tower in Pasig City; Galleria Residences Tower city in Cebu, Sierra Valley Gardens 2 in Cainta and The Sapphire Bloc South Tower in Ortigas Center. Meanwhile, RLC Residences and Robinsons Homes posted combined realized revenues of PHP 6.3 billion in 2021, contributing 17% to consolidated revenues. EBITDA and EBIT ended at PHP 2.3 billion and PHP 2.1 billion, respectively. To widen our reach, we have been staging online housing fares in partnership with online property listing sites. We have also seen increased leads generation due to our strong online presence. We have likewise engaged top-tier social media influencers for brand building affinity. Furthermore, RLC has successfully launched 3 new residential projects, namely Forbes Estates Lipa in Batangas, Sync Y-Tower in Pasig City and Woodsville Crest's Oak building in Parañaque. RLC recognized PHP 10.9 billion in realized revenues from its Chengdu Ban Bian Jie project in China following the turnover of condominium units Phase 1. We have sold 95% of the project while construction for Phase 2 is nearing completion. Furthermore, RLC has recovered 89% of its invested capital with a repatriation from China of USD 200 million in 2021. The company spent a total of PHP 24.8 billion in capital expenditures in 2021, further development of malls, offices, hotels and industrial facilities, construction of residential projects, land acquisitions and for new investments for its local operations. Beyond our financial commitments, we take pride in serving as a leading catalyst of change towards a more resilient and equitable future. We continue to invest in sustainable developments that promote inclusive growth for people and planet. We also continue to integrate environmentally and socially responsible practices in our diverse business operations. The company is proactively taking steps to accelerate the shift towards the use of greener sources of energy through rooftop solar panel installation in malls and electricity supply generation from hydroelectric power plants in our office buildings. We also have a wastewater conservation and treatment program and solid waste management program. Through our very own Robinsons Land Foundation Inc., RLC continues to pursue several social welfare programs for disaster response, community development, health and nutrition and child welfare and education. In the face of challenging economic headwinds, we continue uphold our People First agenda. We instituted remote work arrangements and supported a digital workplace to offer the flexibility needed by thousands of our employees. The company also offered free access to safe and effective COVID-19 vaccines. As of the end of December, 99% of RLC's total workforce have been inoculated. As we welcome back employees to our offices, their health and well-being will remain to be our priority. Robinsons Land made significant strides towards shaping an inclusive people-driven culture that empowers all employees to succeed. We are proud to be recognized in the 2022 Bloomberg Gender-Equality Index, making the second time the company has entered the global list. The distinction comes as a validation to our continued efforts to champion diversity, equity and inclusion in the workplace. Notably, women account for more than half of RLC's total workforce and management base with a significant number engaged in senior leadership roles across the organization. Lastly, we continue to strive for good corporate governance by having independent directors head key Board committees. We have adopted an enterprise risk management program to better capture risks, formulate mitigation responses and improve risk disclosure. Looking ahead, we begin 2022 with a strong foundation and clear path for growth that allow us to deliver value in an ever-changing environment. Robinsons Malls will continue to ramp up its portfolio bringing lifestyle centers closer to consumers with the opening of Robinsons Place Gapan in Nueva Ecija and the expansion of Robinsons Place Antipolo. Once completed, these projects will increase total gross leasable area by 3% to 1.63 million square meters. With return-to-work strategies in full swing and expected to sustain demand, Robinsons office is preparing to deliver inventory of office spaces in Bacolod, Cebu and Iloilo. These developments will further solidify our position as one of the major IT BPM and office space providers in the country. As people look to reconnect explore new destinations, or revisit reliable favorites, revenge travel is expected to spark recovery in the tourism and hospitality sectors. Through well-diversified brands spanning multiple market segments, Robinsons Hotels and Resorts will capitalize on the anticipated return of foreign tourists and the foreseen improvement in domestic tourism. We plan to operate over 3,600 keys with the opening of Summit Naga, Go Hotels Naga, Go Hotels Tuguegarao, and Fili Urban Resort Hotel in Cebu in 2022. Robinsons Logistics and Industrial Facilities or RLX will work towards becoming the fastest-growing logistics facility provider in the country with additional warehouses in the pipeline. In parallel, we will continue to make substantial progress in the development of our landmark destination estates, such as the 30-hectare Bridgetowne in Pasig the Quezon City, 18-hectare Sierra Valley in Cainta and Taytay and a 200-hectare Montclair in Pampanga. These master planned integrated developments will espouse the live, work, play, inspire lifestyle to empower a life of convenience and productivity. For 2022, RLC has earmarked approximately PHP perhaps 25.5 billion for capital expenditures to be funded through internally generated cash from operations and borrowings. Our existing land bank in the Philippines has now reached over 800 hectares with the market valuation of about PHP 128 billion. Overseas, the company expects an earnings boost in 2022 with the recognition of revenues from Phase 2 of its Chengdu Ban Bian Jie project in China. We are honored and humbled to share that RLC has garnered several recognitions, including the Coveted Developer of the Year Award. This is a testament to our unfaltering commitment to deliver a high level of value and service to the industry. With a healthier financial backdrop, we are pleased to report that your company will be distributing a PHP 0.50 per share cash dividend this May 2022. As we move towards sustained recovery and inclusive growth, we would like to express our deepest gratitude to our Board for their ongoing support and guidance. We would like also to acknowledge our talented teams who have gone above and beyond to keep serving our customers, partners and communities amid the most uncertain of times. We are grateful that they share our passion for building people's dreams. Lastly, we are incredibly thankful to our shareholders, business partners, patrons and customers for their continued trust and support. We have never been prouder and more privileged to work alongside you. Emerging from this pandemic stronger and wiser, we look forward to the years ahead with confidence and optimism. We will continue to push boundaries to create value that all our stakeholders can be proud of. [Foreign Language].

Thank you. May I call on the Corporate Secretary to present the results of voting for the approval of the audited financial statements for the preceding fiscal year?

Mr. Chairman, we are pleased to report that stockholders representing 83.25% of the total outstanding shares of the corporation have approved the audited financial statements of the corporation for the preceding fiscal year as presented. The report of the President is hereby also duly noted.

The report of the President is duly noted, and the audited financial statements for the preceding fiscal year are hereby approved as presented. Let us now proceed to the next item in the agenda. May I call on the Corporate Secretary to discuss the next item, which is the proposed amendment of the Articles of Incorporation?

Mr. Chairman, the corporation is proposing the amendment of Article 2 of the Articles of Incorporation in order to reflect the rapidly growing and diversified business portfolio of Robinsons Land Corporation. A summary of the amendments is included in the information statement, which has been distributed the stockholders. After tabulation of the votes, we are pleased to report that stockholders representing 83.33% of the total outstanding shares of the corporation have approved recent amendments to Article 2 of the Articles of Incorporation.

Thank you. The proposed amendment of the Article 2 of the Articles of Incorporation as presented is hereby approved. We now go to the election of the members of the Board of Directors. May request the Corporate Secretary to read the names of the incumbent members of the Board of Directors?

The incumbent members of the Board of Directors are: Mr. James L. Go, Mr. Lance Y. Gokongwei, Mr. Frederick D. Go; Mr. Patrick Henry C. Go, Mr. Johnson Robert G. Go, Jr., Ms. Robina Gokongwei-Pe. And the independent directors are Mr. Roberto F. De Ocampo, Mr. Omar Byron T. Mier and Mr. Bienvenido S. Bautista.

Thank you. May we now have the list of nominees for election to the Board of Directors and the voting results?

Mr. Chairman, in accordance with the nomination process stated in the bylaws of the corporation, the following have been nominated as members of the Board of Directors and have consented to their nomination: Mr. James L. Go, Mr. Lance Y. Gokongwei, Mr. Frederick D. Go, Mr. Patrick Henry C. Go; Mr. Johnson Robert G. Go, Jr., Ms. Robina Gokongwei-Pe; and as independent directors Mr. Roberto F. De Ocampo, Mr. Omar Byron T. Mier and Mr. Bienvenido S. Bautista. There being no other nominations, the affirmative votes in favor of those nominated have been tabulated, and the following are hereby declared as the duly elected members of the Board of Directors of the corporation for the ensuing year until their successors shall have been elected and qualified: Mr. James L. Go, Mr. Lance Y Gokongwei, Mr. Frederick D. Go, Mr. Patrick Henry C. Go, Mr. Johnson Robert G. Go, Jr., Ms. Robina Gokongwei-Pe. And as independent directors, Mr. Roberto F. De Ocampo, Mr. Omar Byron T. Mier and Mr. Bienvenido S. Bautista.

Let's move on to the next item in the agenda, which is the appointment of the external auditor of the corporation. May I call on the Corporate Secretary to present the results of the voting for this agenda item?

Mr. Chairman, the accounting firm of SyCip Gorres Velayo & Company has been nominated as the external auditor of the corporation for the fiscal year 2022. After tabulation of the votes, the appointment of the accounting firm of SyCip Gorres Velayo & Company, as external auditor of the corporation, has been approved by stockholders representing 76.34% of the total outstanding shares of the corporation.

Thank you. The accounting firm of SyCip Gorres Velayo & Company is hereby appointed as the external auditor of the corporation for the fiscal year 2022. Let us proceed to the next item in the agenda, which is the ratification of the acts of the Board of Directors and its committees, officers and management of the corporation. May I call on the Corporate Secretary to present the results of the voting for this agenda item?

Mr. Chairman, the list of acts for ratification of the stockholders are shown right now on the screen. Copies of the said list have also been distributed to the stockholders present by showing the link and QR code to the said list on the screen prior to the meeting. After tabulation of the votes, we are pleased to report that stockholders representing 83.25% of the total outstanding shares of the corporation have confirmed and ratified the acts of the Board of Directors and its committees, officers and the management of the corporation for the period beginning from the last analyst stockholders' meeting up to the current stockholders meeting as duly recorded in the corporate books and records of operation.

Thank you. The acts of the Board of Directors and its committees, officers and management of the corporation for the period beginning from the last Annual Meeting of the Stockholders after the current meeting of stockholders as duly recorded in the books and records of the corporation are hereby confirmed and ratified. We will now respond to questions which were earlier submitted via e-mail. The questions will be answered by Mr. Frederick Go, President and Chief Executive Officer.

For the first question, 2 years into the pandemic, what is RLC's financial and operational outlook coming into 2020 and beyond.

RLC stands resilient and stronger than ever. Despite the challenging business environment, we managed to operate all our businesses with no cash burn and ended 2021 with even lower debt versus pre-pandemic levels. We successfully listed our flagship trust, real estate investment trust, RL Commercial REIT, Inc. which was named the best IPO in the Philippines in the 2021 Asset Triple A Country Awards. We also continue to give back to our shareholders through consistent cash dividend distribution and through the launch of our PHP 3 billion share buyback program in 2021. In response to the pandemic, we have and continued to implement stringent safety protocols across our properties to protect the health and well-being of our employees, partners and customers. We have also rolled out various digital initiatives, such as MallDash, RMalls+ app, Tenants Portal, Sellers Portal and Buyers Portal, all these to make life easier for our internal and external customers. Moving into 2022, we are encouraged by the recorded improvements in consumer activity in the first 3 months, particularly February and March. We believe that revenge spending and revenge travel as border restrictions are gradually lifted, will provide the much-needed boost in the recovery of our retail and hospitality businesses. Our offices meanwhile will benefit from the return-to-work strategies of companies nationwide and globally. For our residential business, we are preparing to launch projects to address pent-up demand for housing. And finally, we will continue to expand the geographic reach of our industrial business to capture opportunities in the logistics sector. We believe that the worst is over, and we look forward to achieving more milestones and cementing our leadership in the years to come.

RLC has proven time and again that there are various segments in the real estate industry that RLC can be successful in. Among its various business segments, which one is the most promising in terms of growth and profitability?

We are actively growing all our business segments to increase our profitability and growth prospects. In the past, we only had our malls, offices, hotels, condominiums and homes as business units. Now we have 7 legs to stand on, with the addition of our Integrated Developments Division and our Robinsons Logistics and Industrial Facilities or RLX. Venturing into integrated development is not new to us because RLC is a pioneer of mixed-use properties. Today, we have 20 mixed-use developments under our belt, plus our exciting destination estates, including the 200-hectare Montclair property outside of Clark, the 18-hectare Sierra Valley in Cainta and our 31-hectare Bridgetowne Destination Estate near the Ortigas Center. These Destination Estates espouse the live, work play, inspire lifestyle, which is an embodiment of the modern Filipino. So I'd say that is the first one. And second, the logistics sector, which has served as a bright spot in an otherwise battered economy. The sector is still in its infancy stage and quite fragmented, presenting abundant growth opportunities. The industrial sector is likewise expanding and upgrading, so we believe RLC has the right tools to make a significant mark in this industry.

Congratulations on RL Commercial REIT Inc. or RCR's successful debut into the Philippines Stock Exchange. What was the strategy behind the formation of this new vehicle?

True to its commitment to enhance shareholder value, RLC has always been on the lookout for business models, strategies or vehicles that can unlock the intrinsic value of its assets. Real Estate Investment Trusts or REITs have proven to be effective tools in crystallizing the value of undervalued assets. Despite the fact that RCR only accounts for about 2/3 of RLC's office portfolio, its market capitalization at listing date was almost 75% of RLC's market capitalization at that time. This affirms that RLC's fundamental strength has not been fully priced in by the market and that RCR has paved the way for RLC to realize asset gain. REITs are also a great way to recycle capital because all the proceeds raised from the IPO will be reinvested by RLC into its various projects within a year. The fresh capital allows RLC to follow through on its growth plans amid a challenging business environment. Looking ahead, we have clear plans to infuse value accretive assets into RCR. It is a testament to RLC's commitment as its sponsor to support its long-term sustainable growth.

Does the company anticipate that ongoing geopolitical tension in Eastern Europe will have an impact on RLC's businesses and investment prospects here and abroad?

The geopolitical tension in Eastern Europe is anticipated to have minimal direct impact on the Philippines and much less on RLC because of first, the Philippines geographic distance from the areas of conflict and second, the country's limited business and economic interest with the 2 nations. However, there are some negative inflationary effects such as rising fuel costs and rising commodity prices. We believe, however, that the country's strong macroeconomic fundamentals will be able to cushion the blow to the economy. Our economy is very much consumption-driven. As a proxy to the consumption story, we believe that RLC will also be able to withstand external headwinds. Our financial position is as strong as it has ever been with a low net gearing ratio. Furthermore, all our business segments have healthy margins and cash flows, which enable RLC to thrive even during a period of high inflation.

With increasing emphasis on ESG, especially for large publicly-listed companies such as Robinsons Land, it's good to hear that RLC already has implemented several ESG initiatives. What are your plans to further incorporate ESG and sustainability into your core businesses?

To build on our momentum of solidifying our sustainability credentials, RLC will continue its ESG efforts in line with specific United Nations Sustainable Development Goals. Among the many efforts we are pursuing, our biggest contribution would be in climate action, and it is what we consider as our focus initiative. We plan to achieve this through 3 major efforts. First is to be able to source renewable energy from third-party suppliers to offset our carbon emissions. Second is to reduce the demand for fossil fuel-based electricity by continuing to install solar panels in our malls. We currently have 24 malls, powered by solar panels, and we plan to gradually increase this leading to [ 2040 ]. Lastly, we plan to have our properties assessed for resilience and eco-efficiency. RLC will engage green-certified contractors and consultants who will ensure that our properties are low carbon, efficient and resilient. In fact, we plan to have all new Metro Manila office buildings certified as green buildings. Through these efforts, RLC does its part in protecting the environment and creating a sustainable future for generations to come.

Thank you. Are there any other matters to be taken up for consideration of the stockholders?

There is none, Mr. Chairman.

This ends the 2022 Annual Stockholders Meeting of Robinsons Land Corporation. The link to the replay of this meeting shall be made available at the website of the corporation. Thank you very much for joining us.