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CREIT income climbs to P1.4 billion

By Sheldeen Joy Talavera, Reporter

CITICORE Energy REIT Corp. (CREIT) announced on Tuesday that it recorded an attributable net income of P1.4 billion in 2023, marking a 12% increase from the previous year’s P1.25 billion.

The company’s gross revenues grew by 31% to P1.8 billion, driven by the expansion of its green asset portfolio, which had increased 4.3 times since its initial public offering (IPO) in 2022, CREIT said in a regulatory filing.

Broken down, the top line consists of lease revenue from its freehold properties amounting to P792.2 million, leasehold properties amounting to P722.4 million, and solar plant at P283.5 million.

In 2023, CREIT added seven parcels of land to its landholdings, totaling 5.12 million square meters of value-accretive assets.

“The higher income we generated as a renewable energy REIT allows us to continuously increase value to our shareholders by declaring dividends beyond the mandated 90% of distributable income,” CREIT President and Chief Executive Officer Oliver Tan said in a statement.

During the period, the company’s gross expenses rose by 12.9% to P103.05 million from P91.27 million previously.

Gross profit soared by 32% to P1.7 billion, translating to a gross profit margin of 94%, up 1% driven by the expansion of leasing activities.

CREIT is the Philippines’ first real estate investment trust (REIT) listing with a focus on renewable energy. It specializes in owning sustainable infrastructure projects, including income-generating renewable energy properties across the Philippines.

“For the second straight year, CREIT paid out 106% of the company’s distributable income, derived from the guaranteed and variable leases, well-above the required 90% as stated in the REIT Law,” CREIT said.

Analysts expect the company to maintain its momentum through the first quarter of 2024, which will also depend on the development of its parent company, Citicore Renewable Energy Corp. (CREC).

“We expect first quarter results to sustain improvements in profitability. Future growth will depend largely on asset acquisitions, which in turn will depend primarily on the availability of suitable projects from its parent, CREC,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

Mr. Colet also said that the strong performance of CREIT in 2023 has placed it among “the very few REITs currently trading above their IPO price.”

Last week, CREC announced that it had raised P5 billion after selling its shares in CREIT to conglomerate SM Investments Corp. (SMIC).

The company and its subsidiary Citicore Solar Tarlac 1, Inc. sold a total of 1.88 billion common shares, equivalent to 28.79% in CREIT at P2.6534 per share.

The parent company said it will continue to be “the single largest stakeholder” in CREIT with a 32.88% effective ownership post-transaction.

CREC is targeting to conduct its IPO by the second quarter, aiming to raise as much as P12.9 billion.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said that SMIC’s investment in CREIT “signals confidence in its growth trajectory.”

“Collaborating with CREC for further development synergizes with its RE (renewable energy) focus, offering long-term sustainability and growth prospects,” Mr. Limlingan said.

“Considering these factors, CREIT’s likely going to be able to enjoy the momentum from 4Q23 to 1Q24, underpinned by its solid fundamentals and strategic initiatives,” he added.

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