Villar’s Golden MV 2024 profit surges to nearly P1T
A massive gain from the revaluation of its investment properties resulted in the earnings of Golden MV Holdings Inc. skyrocketing to nearly P1 trillion last year, toppling record holder SM Investments Corp. (SMIC) from its throne.
The mass housing and memorial park developer led by real estate mogul Manuel Villar disclosed to the stock exchange on Monday that its earnings ballooned to P999.72 billion from P1.46 billion in 2023.
This was “largely driven by fair value gains on investment properties” that totaled P1.33 trillion, it said.
Revenue dip
Golden MV’s net income surpasses that of record holder SMIC, the country’s largest company in terms of market capitalization.
The Sy family-led conglomerate claimed the No. 1 spot when its bottom line landed at P82.6 billion, up by 7 percent on the strong performance of its businesses despite inflationary headwinds.
It can be noted, however, that Golden MV’s revenues dipped by a quarter to P3.6 billion on lower real estate sales, which fell by 26 percent to P3.3 billion, reflecting the still-challenging environment for the sector.
Lower residential unit sales likewise pulled down operating profit by 29 percent to P1.22 billion.
But while Golden MV’s net income is considered the largest recorded by a Philippine company so far, its gains may not be counted in this context.
“We generally don’t consider fair value gains when evaluating earnings since it’s one-off, or nonrecurring,” Alfred Benjamin Garcia, AP Securities Inc. research head, pointed out in a text message to the Inquirer.
Ron Acoba, chief investment strategist at Trading Edge Consultancy, also noted that these gains were essentially noncash, and that Golden MV may not have actually earned money from the revaluation.
“In fact, they may have actually spent money because they may be paying taxes for that ‘income,’” Acoba said, adding that the company may only earn from the properties if these were sold.
Based on its quarterly financial report covering the January to September 2024 period, Golden MV had P8.6 billion in investment properties, or parcels of land “intended for capital appreciation.”
These properties have not generated rental income, and fair value measurements are determined “on the basis of appraisals performed by an independent appraiser … with appropriate qualifications and recent experience in the valuation of similar properties in relevant locations,” Golden MV said in its report.
