Mr. Chairman, honorable members of the Board, fellow stockholders, our friends in media, my colleagues in CPVDC, a pleasant afternoon to you all.
Information and communication technology --- or what is now called the “New Economy”, has brought about rapid economic transformation and adjustment in various parts of the globe.
To keep up, companies need to develop an understanding of the way trends will filter down into their own businesses and geographical markets and take advantage of future trends as they emerge.
In a study by the leading magazine for global sourcing of IT and BPO services, Global Services, and an investment advisory firm, Tholons, Cebu City was cited as the fourth emerging outsourcing destination for global companies, and was the top pick for contact center as well as finance and accounting. The same study also noted Cebu's excellent quality of life which translates into better quality of workers and low employee turnover.
Being a pioneer in the IT and IT-enabled services industry in the Visayas and Mindanao, Cebu Property Ventures and Development Corporation has benefited greatly from its track record as trailblazer and key player in the industry. This is illustrated by the Company's strong financial performance and reamarkable operational growth in 2007.
Financial and Operating Highlights
Revenue for CPVDC increased by 49 percent to P371.7 million, compared to the previous year's P250 million.
A key contributor to this growth was the sale of eight lots at Asiatown IT Park, with the Company hitting its target for the year after only the 1st quarter. The sales, which contributed P278.7 million to total revenues, were brought on by the continuing unprecedented demand for office space.
Also contributing to revenues was the recurring leasing revenues from the Company's eOffices amounting to P57 million.
All these contributed to your Company's net income of P172.6 million for the year, which is an impressive 107 percent higher compared to the previous year's income of P83.5 million.
Our partners in development --- the lotowners and locators --- have also benefited significantly from the growth of the industry. Build-up at Asiatown IT Park today is unprecedented, with at least five ongoing major constructions. These include: Skyrise 2, TG Tower, i3 and the recently unveiled eBloc Tower. Combined, these will bring in a total gross leasable area of close to 78,000 square meters in addition to the existing GLA of over 66,500 square meters in 2007.
To cater to the emerging 24/7 lifestyle at Asiatown IT Park, the Company is also constructing a 2,500-square meter retail development, scheduled to be completed by the first half of this year. The shopping stores, bars and restaurants which will locate in this new hotspot will complement those already operating at the various retail strips within the park.
Generating more jobs
The unprecedented infrastructure growth at Asiatown IT Park has attracted even more local and multi-national firms in IT and ITES. Industry brands including NKC Conveyors Philippines Corporation, Morph, Rapid Solutions, Inc., Micro D International, Cordia Philippines and Convergys Philippines, have been added to growing list of locators at the park.
The entry of more companies at Asiatown IT Park has not only brought in investments, but has generated a significant number of jobs for Cebuanos and those from the neighboring areas. The workforce in this IT hub has increased by 92 percent, from 6,067 in 2006 to 11,637 workers in 2007. With the ongoing construction of the various buildings within the park, this number is expected to exponentially grow once these developments are completed. All the present construction development in Asiatown IT Park is expected to be fully operational within 2008.
eBloc Tower
To address the need for more office space and take advantage of this demand, construction of the eBloc Tower started in the 4th quarter of last year.
The eBloc Tower is a project of the newly-formed Asian i-Office Properties Inc. (AIO), which is a special purpose vehicle created through the contribution of investments from CPVDC and Ayala Land. The AIO serves as an innovative investment tool and is accredited by the Philippine Economic Zone Authority.
Constructed Wetland System
Another significant development within Asiatown IT Park is the creation of the constructed wetland treatment system. This innovation converts wastewater from the commercial operations of the park to a usable resource with the use of an organic innovation.
The constructed wetland treatment system at Asiatown IT Park promotes the sustainable use of local resources, and is a cheaper alternative for wastewater treatment due to its low-cost construction, energy-saving technology and simplified operation and maintenance.
One of only two operational constructed wetlands in the Philippines, the facility became operational in March 2007. It is designed to treat 2,200 cubic meters of water a day, and is expected to address the quality of wastewater discharge as build-up at the park increases.
QEHS Certification
In mid-2007, the CPVDC's systems and processes were aligned with and included in its mother company, CHI's Quality, Environment, Occupational Health and Safety Management Systems (QEHS MS).
After adopting these policies and undergoing an external audit by Certification International, CPVDC was recommended for ISO certification last November. Today, CPVDC is now certified to global standards for Quality, Environment and Health and Safety .
All these are part of CPVDC's commitment to continually improve its management systems and processes as it takes its place among world-class and globally-competitive companies.
Value to shareholders
All these initiatives and accomplishments were aimed towards increasing the value of the Company for you, our shareholders. By year end last year, CPVDC's total asset increased by nine percent, from P1.16 billion in 2006 to P1.27 billion. Last December 4, CPVDC declared dividends of P0.10 per share that summed up to P94 million cash dividend for the year.
Looking Ahead
The consistent growth of the BPO and IT/ITES industries presents more opportunities for the Company to build and develop projects to address industry demand. Asiatown IT Park has the advantage to seize the momentum it has established as the first I.T. Park in VisMin and as an investment destination.
We are far from hitting the peak. What has been completed in the first phase of Asiatown IT Park's development is just a take-off from CPVDC's plan for further growth and progress.
Our eBloc Tower is scheduled to be completed by the third quarter of this year. This 12-storey mid-rise office condominium, will have 21,000 square meters of office leasable space and 1,700 square meters at the ground floor for retail space.
We are also excited about the horizontal development of phase two of Asiatown IT Park covering five hectares of raw land is expected to start in 2008. This will be a source of future growth in office leasing revenues as CPVDC turns its strategy towards building offices to cater to more IT and IT-enabled services locators while keeping ownership of the land for future value appreciation.
In the coming years, you will see more of the dynamic progress of this modern trading hub as the IT/ITES industry flourishes in this side of the country with Cebu's ability to address the industry's needs in terms of infrastructure, talented manpower and effective partnership between business and government sectors.
We would like to thank the board of directors for their guidance, the management team and employees for their dedicated service and loyalty, and the market and our partners in the industry for their continued support. We also express our utmost gratitude to our shareholders for their trust and confidence in us as we bring this Company to even greater heights in the years ahead.
Thanks you and good afternoon. |
