Robinsons Land Corporation (RLC) Earnings Call Transcript & Summary

Welcome to Robinsons Land Corporation's investor briefing for the full calendar year 2022. Joining us today from RLC are Mr. Frederick D. Go, President and Chief Executive Officer; Mr. Kerwin S. Tan, Chief Financial Risk and Compliance Officer and the rest of the Investor Relations team. RLC will give you a presentation on the company's unaudited results for calendar year 2022. At the end of the presentation, there will be a question-and-answer session. [Operator Instructions] After the briefing, you may send your queries to the RLC Investor Relations team. We will now proceed with the presentation.

Good afternoon. We are pleased to share RLC's unaudited financial results for the full year ending December 31, 2022. We will touch on the operational highlights per business segment, provide updates on our digital and other initiatives, future plans and strategies. In addition, we will also provide updates on our ESG activities and journey during the period. Year 2022 is a record year indeed, as net income attributable to parent surged to a record PHP 9.75 billion. This is the highest in the company's history. Profitability continues to accelerate even without the benefit of CREATE and earnings from land sales last year. Fourth quarter net income ballooned to 79% year-on-year to PHP 3.01 billion. Our earnings per share increased to PHP 1.91 per share while net book value is now at PHP 25.59 per share. The Residential business registered solid performance as net sales take-up more than doubled in fourth quarter 2022, up by a solid 123% year-on-year, up 57% versus calendar year 2021 and up 42% quarter-on-quarter. Fourth quarter 2022, residential revenues skyrocketed by more than 4x versus the same period last year to PHP 2.8 billion. Our Malls business revenue growth zoomed to PHP 13.03 billion and increased 58% year-on-year. Fourth quarter mall rental revenues jumped 82% versus same period last year. The Hotels revenue surged by 94% versus same period last year. Our industrial revenue continues to be robust, jumped 57% year-on-year. We infused 7 assets into RLX or Robinsons Logistics and Industrial, Inc, this is a wholly-owned subsidiary of RLC. Our office business continued to yield stable results. Growth may be tempered, but return to work opportunities will be a key growth driver. Each business unit contributed positively, a strong testament to the company's recovery and growth story. We made the important strides to propel our growth momentum. Our asset portfolio is well positioned to drive value for all our stakeholders. We celebrated the end of 2022 with our 53 operational lifestyle centers, 86 residential buildings, 40 housing subdivisions, 31 office developments, 28 mixed-use developments, 25 hotels, 8 work.able centers and 7 industrial facilities. Turning now to the financial performance highlights. RLC's financial position continues to be solid and healthy with total assets at PHP 224 billion. This includes cash of about PHP 8 billion. Shareholder's equity landed at PHP 135 billion, net of PHP 2.3 billion of treasury shares from the company's buyback program. Total outstanding debt ended at PHP 51 billion, translating to a 33% net debt-to-equity ratio. Meanwhile, earnings per share is at PHP 1.91 per share, 23% higher than 2021 EPS. With this, book value is now at PHP 25.59 per share, a happy discount from the company's currently traded share price. In 2022, strong earnings performance of the company was mainly driven by our investment portfolio. This contributed 70% and 60% in EBITDA and EBIT, respectively, while the development portfolio contributed 49% and 44% in revenue and net income. This is mainly because of higher revenue recognition, in the residential projects and also because of the recognition of the Phase 2 of our China project. RLC recorded a spectacular year as it registered NIAT attributable to parent at a record PHP 9.75 billion, up 21% versus same period last year. Moreover, RLC managed to deliver top line growth of 25% to PHP 45.51 billion. EBITDA and EBIT margins continued to improve, coming in at PHP 19.35 billion and PHP 14.12 billion or a 29% and 45% increase, respectively. All businesses posted strong numbers in 2022. Higher revenues were contributed by all our business units and by our China project. EBITDA contribution on the other hand, was led by the investment portfolio, which accounted for 70% of the total. Zooming in on the fourth quarter performance, net profit attributable to parent leaped by 79% year-on-year to PHP 3.01 billion. The performance was bolstered by massive increases in revenue, EBITDA and EBIT by 75%, 69% and 140%, respectively. It was led by the residential division, which posted 4x of its realized revenue in the prior year. Hotels likewise boosted an improved performance of 160% increase in fourth quarter revenue to PHP 943 million. Our hotels division also capped the year with the opening of Fili Urban Resort Hotel in Cebu, the first domestically rated 5-star hotels in the Philippines. RLC's long-term debt and existing bond issuances remain at manageable levels, as shown in this slide. As of December 31, 2022, total debt ended at PHP 51.4 billion with an effective rate at 4.32%, and all our interest rates are fixed. I will now turn over the presentation to Ms. Erica Lim, who will report the operational highlights of our business units.

Thank you, Mr. Kerwin. Good afternoon, everyone. Robinsons malls continues to assert itself as the second largest mall operator in the country, highlighted by its 53 lifestyle centers, spanning 1.6 million square meters of leasable space. That's 91% leased out with over 8,000 retailers. Improved consumer spending and retail sales lifted mall revenues by 58% in 2022 to PHP 13.03 billion, accounting for 29% of consolidated revenues, as rental income rose by 74% to PHP 9 million. In the fourth quarter of 2022 compared to the same period last year, rental revenue grew by 84% due to the strong holiday season spending. EBITDA jumped 70% to PHP 6.59 billion while EBIT increased 15x to PHP 3.02 billion year-on-year on the back of flattish growth in the depreciation expense. In 2022, we have made additions to our mall portfolio with the opening of Robinsons Place Antipolo Expansion in May and Robin Gapan in November. These 2 properties have increased our mall GLA by over 50,000 square meters. Meanwhile, Robinsons offices ended the year with 740,000 square meters of leasable space with a total of 31 office buildings and an average of 90% lease percentage. Offices sustained its upward trajectory in 2022 with a 9% growth from the previous year, posting revenues at PHP 7.07 billion. This steady performance is driven by rental escalations and stable lease percentage. EBITDA increased by 10% to PHP 6.2 billion on cost efficiency, while EBIT grew by 12% to PHP 5.27 billion due to lower depreciation in 2022. Robinsons Offices completed Cybergate Galleria Cebu, Cybergate Iloilo 2 and Cybergate Bacolod 2 in the fourth quarter adding 52,500 square meters of gross leasable area. This brings RLC's office portfolio to 740,000 square meters of gross leasable space. In addition, RLC strengthened its presence in the growing flexible workspace segment with the opening of 2 new build-to-suit work.able centers in Cyber Omega in Pasig and in Giga Tower in the Bridgetowne Destination Estate. Currently, there are a total of 8 work.able sites in our portfolio. In 2022, Giga Tower received the lead gold certification, Robinsons offices is committed to its sustainability goals for both existing and future assets. As the tourism industry moved towards normalcy, Robinsons Hotels and Resorts recorded a 94% surge in revenues to PHP 2.33 billion at the end of 2022. The increase in demand for business and leisure bookings and the resurgence of MICE business positioned RLC's hospitality business for a strong recovery in the last calendar year. Notwithstanding reoperate -- operating expenses from new hotel development, EBITDA climbed 13% to PHP 279 million. To date, RHR remains to be the largest hotel developer and operator in the Philippines in terms of number of hotel properties. RHR has 25 hotels and resorts in its expanding portfolio. Further cementing itself as the largest hotel developer and operator in the Philippines with the biggest portfolio of hospitality developments, RHR has completed new hotels, namely Go Hotels Plus Naga, Go Hotels Plus Tuguegarao and Summit Hotel Naga in 2022. RHR has opened Fili Hotel at Nu Star, the Philippines first homegrown authentic 5-star luxury hotel and the most exciting hotel project in the country. It brings together the finest hotel offerings with modern Filipino elements. Fili is located in the country's first integrated resort in Cebu and boosts world-class dining concepts and Fili's [ Primo ] New project launches in 2022 raised the combined net sales take-up of RLC Residences and Robinsons Homes to PHP 16.96 billion up by 57% versus the same period last year, represented by the red and blue bar graphs. While into the fourth quarter of 2022 versus the fourth quarter of 2021 more than doubled to PHP 6.4 billion. Meanwhile, net sales take-up from joint venture projects with Hong Kong Land, Shangri-La and DMCI represented by the yellow bar graphs outperformed the previous year by 58% to PHP 8.99 billion. Net sales take-up in the fourth quarter was particularly robust storing 47% to PHP 2.06 billion. On the other hand, realized revenue growth of PHP 2.8 billion for the fourth quarter was up 434% and versus the same period last year and the PHP 9.10 billion for 2022 was up 44% year-on-year. The robust performance was driven by increased payment collections from RLC Home and unit buyers, faster completion of its residential projects and the remarkable contribution from its joint venture equity earnings. EBITDA surged by 54% to PHP 3.51 billion, while EBIT dropped by 60% to PHP 3.41 billion versus 2021. In 2022, RLC Residences launched 4 projects worth approximately PHP 10.9 billion. The first one is AmiSa Private Residences Tower D located in Punta Engano, Mactan Cebu. AmiSa Private Residences is the very first leisure residential community in Mactan. Next, Sierra Valley Gardens Building 3 is a strolling 4-tower residential condominium development [ topped ] 22:40 within Sierra Valley Cainta, Rizal. Woodsville Crest - Pine Building, which is part of an 8 tower residential development located in Merville, Paranaque promises to be an oasis in the south of the metro. And finally, Sync N Tower, the third of RLCs 4-tower property situated along C5 road in Pasig City, is envisioned to support a top beat and vibrant urban lifestyle by providing immediate access to key areas in the metro. With a strong performance in 2022, RLC continues to make significant strides with its joint venture projects, registering healthy sales take-up across all 3 projects with just a little over 3 years from launch date, Aurelia is already 72% sold, Velaris at 65% sold and Sonora at 45% sold. Robinsons Homes launched Springdale Baliwag last November with sales value of PHP 2.5 billion across 852 units. Springdale Baliwag is a gated subdivision with a thoughtfully designed spaces, complemented by a wide selection of amenities that families can enjoy. Robinsons logistics and industrial facilities or RLX continues to drive its pursuit of becoming a market leader in the industrial and logistics sector. Industrial leasing revenues in 2022 dropped by 57% to PHP 555 million year-on-year as a result of the full year contribution of new industrial facilities. EBITDA escalated by 48% to end at PHP 479 million and EBIT rose by 41% to end at PHP 351 million, respectively. To date, RLX has 7 industrial facilities with 167,000 square meters of total gross leasable space. Under Robinson's integrated developments, we are pleased to report that Bridgetowne is the host for the world's biggest permanent obstacle facility with 6,000 square meters of space and 25 various obstacle course components, the previous record was 18. The Integrated Development Division marked 2022 with accomplishments such as the completion of the interchange exit in Montclair near Clark Freeport Zone and the fully leased out retail spaces in Sierra Valley and finally, the launch of several residential projects. RID recognized revenues of PHP 646 million from a portion of deferred gain on sale of land to joint venture entities. EBITDA and EBIT settled at PHP 392 million and PHP 388 million, respectively. Moving on to our project in China. RLC recognized revenues of PHP 12.78 billion in 2022 from Phase 2 of its Chengdu Ban Bian Jie Project, exceeding revenues recognized in 2021 by 17%. Pivoting to CapEx, RLC spent PHP 25.86 billion in capital expenditures for the expansive development of malls, offices, hotels, warehouse facilities, acquisition of land and construction of residential projects for its local operations. To support our growth plans, our land bank now spans across more than 800 hectares with the crystallization of land bank values in Metro mania, RLC's land bank value is estimated at about PHP 185.6 billion as of December 2022, 47% of this or PHP 87.4 million is attributable to the land bank value of our destination estates. We move on to the company's digitalization efforts. Leveraging on the reach of our omnichannel platform, we have introduced innovative advertising campaigns for Robinsons malls, as shown in this slide. We greatly look forward to the launch of RLC's Mall Dash mobile app in the first quarter of this year. The residential division actively launched campaigns using its various media and digital platforms in 2022. During the last quarter of the year, RLC Residences amplified its brand campaign by renewing its partnership with Heart Evangelista through an online event and on-site media launch. For Robinsons Hotels and Resorts, we have launched the RHR mobile app with the goal of improving end-to-end guest experience. Looking ahead in 2023, Robison malls will unveil Opus mall to the public, a premier upscale lifestyle center and right across this will be the GBF Towers, which are Grade A property line development, courtesy of Robinsons offices. These properties will rise in the Bridgetowne Destination Estate. Our logistics and industrial facilities division targets to complete 3 new locations in 2022, namely RLX Calamba, 2A and 2B and as well as a second site in Sierra Valley. Our residential division is actively launching various projects nationwide, following the successful launches of AmiSa Tower D, Sierra Valley Gardens Building 3, Woodsville Crest - Pine Building and Sync N Tower all in 2022. It is gearing up to launch more projects this year, including the [ Park ] Residences and Mandaue Tower 1. Lastly, Robinsons Hotels and Resorts successfully opened Fili hotel in Cebu and plans to continue this momentum with the opening of its fourth international branded hotel Westin in early 2023. Finally, we place a spotlight on RLC's various ESG initiatives. It remains as a market leader in solar energy usage with 28 Robinson malls harnessing solar power with a total capacity of about 31 megawatts nationwide. This translates to 28 million-kilowatt hours of clean energy and over 20,000 metric tons of carbon dioxide avoided. This is also equivalent to more than 337,000 trees planted. As an advocate of environment-friendly modes of transportation, we have 21 bicycle-friendly establishments. RLC also spearheads other community recycling efforts, including the weekend recycling market, bottles to soil program and the minimized waste, maximize space decluttering program. Four of our office developments have acquired leads accreditation. We held tree planting activities in 8 different localities within the year. All Robinsons malls are designed with a system for waste water conservation and recovery. 29 of our malls have rain water collection systems and 15 malls used recycled water for non-potable use. Aside from this, Robinsons malls and offices installed water-efficient fixtures in a restrooms to further reduce water consumption in its establishments. We focus on giving back to communities with the Robinson Land Foundation, Inc. To date, RLC has already helped 5,321 beneficiaries from calamity-stricken communities of Ormoc and Tacloban, post-Typhoon Agaton and the fire incident in Punta Prinsesa, Cebu City. Lingkod Pinoy, Transport Hubs, Locally Sourced, [indiscernible] remain to be fixtures of community development efforts. We have partnered with Giving Hope Foundation to feed public school children. Finally, we are helping 10 schools through our Brigada Eskwela program. We have a longstanding commitment to good corporate governance and stewardship. We have adopted an anti-bribery and anti-corruption policy to uphold appropriate ethical and responsible business conduct. Moreover, RLC has duly complied with the registration process of the Anti-Money Laundering Council pursuant to the Anti-Money Laundering Act. RLC received the Golden Arrow award from ASEAN Corporate Governance Scorecard Assessment. The award affirms that the company is at the forefront of promoting transparency, accountability and ethical business practices. The recognition serves as a showcase to espouse that the company adheres with the international corporate governance best practices to be worthy of the trust of various stakeholders. Kindly allow us to briefly share pictures of our ESG efforts through the next 3 slides. Finally, RLC is deeply honored to have received various accolades for esteemed organizations throughout the past year. This ends our presentation. We are now open for questions. Thank you very much.

[Operator Instructions]

Hi. Good afternoon, everybody. Thank you for joining us again today. Who would like to answer the -- there are some typed in questions. Kerwin, do you want to take that?

There's a question from [indiscernible]. What is the current occupancy rate of the Office segment given the POGO Exodus? Is the segment heavily reliant on POGOs? So the lease percentage for Office is about 90%, and we have the lowest exposure on POGOs, it's actually about 1% for the whole GLA of Office. Second question comes from the line of [indiscernible] again. Any plans to launch new malls in 2023 or just mere expansions? For 2023 for malls, we are planning to open Opus mall. It has approximately 53,000 square meters of gross leasable area.

Faraday, would you like to take question number 3?

How was the tenant sales in fourth quarter? Okay. The tenant sales for fourth quarter, we already hit 104% above the 2019 levels.

On the last question from [ Dante Tagle ]. Any guidance on reservation sales? We generally don't give any guidance, but you can probably tell from the number of launches that we have already done for 2023 and intend to do for 2023, we are expecting 2023 to be much, much better than 2022. Hence, the new launches and the additional launches that are coming up. There's a question -- yes, go ahead.

Okay. For the total concessions in 2022, the total concession is at PHP 1.1 billion, 2022.

Kerwin, I think you skipped the question from [ Ross Turibio ] or Ron Rodrigo, would you like to take that?

Clarify the statement earlier on the revenue contribution split. For the investment portfolio in terms of revenue, it's 51% and development portfolio is 49%. In terms of EBITDA, investment portfolio accounts for 70% of EBITDA, 60% of EBIT and 50% of net income. Well, the balance is for the development portfolio.

Thank you. Thank you, Kay. Kay, you want to answer the Offices question of Veronica Carlos?

Yes, sir. So what would be the occupancy without the impact from new buildings launched in Q4? It's actually about 92%, if we are to remove the impact of the new buildings that were completed in 2022. How was the office footfall in Q4? And what was the number in Q3? Our footfall for Office is close to 90% already, since more workers have started reporting to the offices since the opening of the economy and basically, we reached the end of the pandemic already. Has this improved so far in Q1 2023? We are expecting an improvement as we move along the next quarters of the year. So we are very optimistic when it comes to the increasing footfall for office. Unfortunately, we don't provide occupancy target for the Office segment for 2023, but yes.

For the tax -- for the tax rate in the fourth quarter of 2022, the tax rates are at 12% because of the infusion of certain assets to the [indiscernible] to RCR.

[Operator Instructions]

From our attendees, we have a question from Mr. Carl Sy.

We can proceed with Jelline Gaza's questions first. While Carl is fixing his device. Jelline, you may proceed with your question.

Hello afternoon. I have several questions on the residential segment. I might have missed this, but were you able to share how much launches you did for this year and then the target next year, and also the unsold inventory in Peso value?

Okay, for the launches in the fourth quarter, we launched about PHP 7 billion for the unsold inventory at the fourth quarter 2022 is -- this total inventories at PHP 21.84 billion.

How about the target that you have for 2023 for launches?

I think normally, we don't really have a target, right? We just have a lot in the pipeline that we launched according to sales take-up. We we're very much -- I'd like to say we pride ourselves and being agile or flexible. So we don't -- we tend not to carve anything in stone and respond to the market -- respond to the market demand. So we have a lot of projects, as you know, in Bridgetowne, for example, and then the additional buildings in our various projects. For example, in Sync launched the C and the N, and then the -- next the C tower, et cetera, et cetera. So we have a lot of those types. So we have a lot in the pipeline. But I think the -- what I was referring to -- for the launches for 2023 are obviously those that we launched in the fourth quarter of 2022, the sales for that is projected to be in 2023 and 2024.

Understood. And to what factors do you attribute the strong presales momentum, at least in the fourth quarter?

Well, we like to think that it's everything that we've been doing, there are strategic moves such as [ funding ] consolidating our -- what to stand 3 business -- 3 separate business units or 3 separate business brands into 1 RLC residences bringing in global ambassador like Heart Evangelista, strengthening our sales organization, both domestically and internationally. And of course, the -- I'd like to think the scaling of our very clear mission, which is to build a well-designed beautiful homes that all our stakeholders can be proud of. I'd like to think that both the company, the organization as well as our customers are responding to all those improvements and changes that we've done over the years.

And then lastly, on the resi. How's the trend on the residential revenue reversal so far? And if you have the number, can you share any reversals for the fourth quarter?

I don't know. Anybody have the...

For fourth quarter, we didn't have any revenue reversal for our resi revenues [indiscernible] revenues.

Carl, you may proceed with your questions.

Let me just check if you can hear me?

Yes. Carl, we can hear you now.

So I'll ask still on the residential segment, similar to Jelline. So as mentioned by Jelline, for instance, fourth quarter reservation sales were very strong. From what I can tell, maybe 1/3 of that came from Sync residences alone. So I was wondering also if there were some other -- correct me if I'm wrong there, but I was wondering also if there were some other blockbuster projects in bulk, where it was just Sync that [ comprises ] the heavy component of fourth quarter presales?

Who would like to take that question?

[indiscernible] mostly from the Sync residences and the combination of our ready-for-occupancy project.

Okay. So Sync plus some ready for occupancy projects. Got it. And then again, on the residential segment, the residential sales, could you tell us maybe what's the breakdown between local OFW International or just local international, if that's how you break it down?

I guess it's 80% of local and about 5% of local/international.

Let me clarify, you mean maybe 75% local? 5% OFW? 20% international -- Foreigner?

The [indiscernible] account for less than 10% of the total [indiscernible].

So Kerwin, could you please clarify your answer because I also lost you there?

Sorry. Just to clarify, the local is 80%, the local/international is 15% and 5% is international.

Sorry, 5% is Foreigner? Is that you mean?

Foreigners, yes. Yes.

I think your answer, Kerwin, let me try to rephrase. So 5% is -- are Foreigners, 80% are Filipinos and 15% are Balikbayans or [indiscernible].

And is this -- would this be particularly different from last year or 9 months? Or would it be roughly the same?

I think it would be roughly the same. It would be markedly different from, say, pre-pandemic, right, where there was a lot of foreigners buying. But from like 9 months, 12 months ago, it's pretty similar.

Got it. And again, I'd just like to dwell on the residential sales. So for instance, because it -- correct me if I'm wrong here, but I think it's a record level. So perhaps -- was a lot of the sales -- I'm trying to think of what might contribute to further growth of what you're doing differently from some time ago? And maybe were you able to send more sales agents abroad or more [ do you choose ] abroad or maybe it's an online platform or that big event you referred to in your presentation, did that generated a lot of sales? Or you got a lot of leads from that?

I think it's 3 things, Carl, a combination of what I mentioned earlier to answer, Jelline. One is what you said, which is we have more international deployment now of salespeople, but I think it's really the improved product that we are bringing to the market. I think that the customers see this and appreciate this that we're bringing better products to the market, and we have a commitment to do so. I mean it is our purpose, our mission to do such. It's not an empty set of words. We really want to build better products and build a better brand. And I think lastly, it's really launches of such kind of projects or such kind of products, as we launch new products and show the market that these are excellent products. I think the market is receiving them quite warmly.

Understand. And some on earnings this time. So I don't know if you'd be willing to answer this one. But let's say, for 2023, you will not be able to recognize revenue from China anymore. Do you still expect 2023 earnings to be above 2022 levels despite that?

The answer is yes.

So higher than 2022. And then finally from me, on office pre-leasing this time. For the office projects, for completion this year. Could you get me the pre-leasing levels or even if an aggregate that month would be fine?

Anybody have that?

Yes, sir. For 2022, Carl, the blended is not really...

2023? Yes.

For 2023 for GBF, we are aggressively marketing the project. And we have done several oculars with potential clients.

Okay. And that's the only project for completion this year. Is that right?

Yes, Carl.

Next, we have a question from the line of Mr. German de la Paz.

Can you hear me?

Yes. But it seems to be a little bit choppy, but now we can hear you.

Thank you, Sir Frederick. Thank you for the presentation. Just a few questions from me. Just one -- first about malls. I just want to ask what was the foot traffic that you saw in the Q4 compared to Q3 and may I ask for any indications so far from January to March this year?

Footfall is already at 100% for our malls as of the end of 2022 and it continues to remain strong for January and February. Above [indiscernible], yes.

All right. Okay. That's good to hear. For rental concessions, I just want to clarify if I heard it correctly, there was PHP 1.21 billion for full year 2022?

Full year 2022 is PHP 1.1 billion.

PHP 1.1 billion. I just want to ask -- when was -- if there are any -- if there are still any rental concessions left? Or have you completely lifted this in your mall segment?

We no longer give pandemic-related rental concessions.

All right. For offices, I saw in the slides earlier that there was relatively low -- relative lower occupancy rates among the Cybergate malls that was newly opened as of latter 2022. I just want to ask the outlook for this -- for the rest of the year? Like do you expect this to go up for this year?

Yes, I can answer that. Yes, I think you're right because we added new buildings. And unfortunately, the new buildings didn't come online pre-leased or fully leased at the opening date. But to answer your second question, definitely, I think we -- we expect occupancy to go up during the period, right? If not, that means, I guess, our office buildings division, people should be changed.

All right. Thanks for that, Sir Frederick. Okay. For the residential presales in Q4. I just want to ask if -- were there any further relaxation in paying methods offered to buyers that contributed -- somewhat contributed to the strong figure in Q4?

I'm not aware of any such moves.

Next question to the Q&A box from Caroline Vergara. Can you provide a breakdown of reservation sales in different income segments and expectations in 2023? So the breakdown between residential and homes is 60% for residential and homes about 5% and the remaining under JVs. Unfortunately, we don't provide guidance when it comes to reservation sales moving forward. Next question.

Kay, by the way, I think you have to adjust your microphone, you're coming in very, very faint on my speaker. I don't know about the rest of the people.

Here, sir?

Now, that's better. [Foreign Language].

Okay. I'll answer the residential calculation -- residential calculation at fourth quarter is 30%.

The next question is from [indiscernible]. What is the residential backlog or presales, that is yet to be recognized revenue? It's about PHP 41.3 billion. That's the unrealized sales and reservation. Next is for unsold inventory. What is the breakdown between completed versus under construction?

It's -- the under construction is about 50%. It's 50-50.

The next question is from Veronica Carlos. What specific projects drove the -- more than 400% growth in property sales?

The contributors are the [indiscernible] that contributed for that.

And then from Wilson, how have residential revenue reversals from cancellations been tracking?

This cancellations -- cancellation is at 30%.

Next would be how much have office rents increases year-over-year? Our escalation is about 3% to 5%, Wilson. And then any plans to infuse more assets to RCR?

Yes, we plan to infuse 1 to 2 assets per year in the next 3 years RCR.

We have another question from German. How does the 30% sales cancellation in Q4 compared with 9 months?

Just to put things in context, in the first quarter, the cancellation rate is 57%, second quarter is at 59% and the third quarter is up 47%.

I think we have another question from Jelline. Jelline, you may mention your question now.

I just wanted to get more clarity about the 50-50 split of unsold inventory. 50% being ready for occupancy units. Can you give us more color as to what type of products comprise this RFO and which locations? And what is management's plan to move this inventory?

Sorry, the 50-50 split is those under construction, and those are presale that [indiscernible] that is not ready [indiscernible] ready for occupancy component is quite low.

Kerwin, I think your answers are a bit confusing. Let's say, I don't -- I was even shocked when I heard Jelline say that. Can you make -- answer it more clearly?

Sure. I think the question was about the residential inventory, which is under the construction and which is presales. My answer to that is that...

No, no, that it was 50% ready for occupancy and 50% under construction. So please correct her, what is the correct answer to that?

The correct answer is ready for occupancy is about 10% only.

We have another question from Jeanette. Can you talk about your strategy on how you intend to move your seemingly elevated RFOs? I think Jeanette this was already addressed by Kerwin. So the RFO accounts for about 10% of the PHP 21.8 billion inventory for residential.

Kay, you have to adjust your microphone again.

Yes, sir. To repeat the answer, it's...

No need to -- we heard you. Just please adjust your microphone for the next question.

Yes, if you have further questions. Yes. So we have another question. Cancellation was at 30% in 4Q 2022. Why was there no revenue reversals in 4Q 2022 then?

The cancellations were mostly pertain to accounts which -- they have to reach the revenue recognition message.

Another question from [ Rafi Mendoza ]. How do you plan to infuse the 1 to 2 assets per year into RCR? Example, property for share swap that any timing of infusions this year?

For this one, we're looking at a second half infusion most likely. We're studying all angles on how to infuse the property to RCR.

If there are no more questions, let's call Mr. Frederick for his last message before we end the call. Mr. Frederick?

Yes, maybe there's somebody else would like to ask a question. There are none, okay. Okay. Well, thank you again, everyone, for this call and for your continued support and following RLC. As you can probably tell, we had a fantastic year. We almost don't want to talk about the pandemic as we're really way past the pandemic already at this point. And I think we've put in place so much for this into the company that we have so many springboards to -- to keep growing the profitability of the company. So we really look forward to 2023 and onwards as years where we can really harvest what we have seeded in prior years. And even during the worst of times, we continue to invest heavily, buying strategic land, building projects that we believe will really pay off in the future, and the future is now. So -- as you can see from our profitability last year. And as you will probably see in the next few years, you'll see that, I guess, the loyal shareholders of RLC will be rewarded with better profitability. And the company believes in this, not in empty words as you've already seen, we've already bought back, we've already fully consumed the first stock buyback program of PHP 3 billion, and then we approved another stock buyback of another PHP 3 billion, of which we actively -- we actively buy back in the market. And on top of that, we will still be recommending to the Board the considerable cash dividend as we always have been for the past many years, even during the worst of times, during the pandemic, we still paid out such cash dividends. So well, I'd like to think that the company is in great shape and is doing what are the correct moves to reward shareholders, but how the market reacts is, I guess, totally out of our control. But we really appreciate, and we really are grateful for the recommendations that have been coming out from all the various equity houses and stock brokerages that continue to follow us and I guess, give a true picture of how valuable Robinsons Land really is versus what the stock market is valuing that. So with that, have a pleasant afternoon, everyone, and have a great weekend. And once again, thank you.

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