‘Revenues of 8990 on track to reach ₧20B by year-end’

Mass housing builder 8990 Holdings Inc. said its revenues may post double-digit growth and hit P20 billion by the end of the year as its business recovers from the impact of the pandemic.

Alexander Ace Sotto, the company’s acting president and COO, said the company’s expected revenues by the end of the year are double the P10.01 billion recorded in the first semester.

“With our first half figures, we are actually optimistic and we see double-digit growth by the end of the year. By next year, we should see revenue growth normalizing [and reaching] pre-pandemic levels,” Sotto said during the company’s stockholders meeting on Friday.

he said the company has allocated some P8 billion in capital expenditures (capex) this year, some 33 percent lower than last year’s capex of about P12 billion.

“For 2021, our capex is 8 billion and that includes the cost to build houses that are scheduled for take out within this year. And I think it also includes replenishment for land bank,” Sotto said.

he said its cancellations and default ratio improved this year, as 93 percent of its buyers were able to pay their monthly amortizations. The figure was up from 75 percent last year, partly as a result of the passage of Bayanihan Acts 1 and 2, which allowed buyers not to pay for their bills without being penalized.

“So I think our buyers have started to realize—most of our buyers are first home buyers—the importance of owning their house or maintaining their house. So we are optimistic that our default ratio will continue to improve,” he said.

For this year, the company has already launched two projects and is slated to launch at least two more, which include a condominium project in Cubao in Quezon City and an a development in Cutud in Angeles City, Pampanga.

The company earlier said its income in the first semester more than doubled to P3.45 billion from last year’s P1.48 billion as many consumers decided to purchase houses due to the pandemic.

The increase was also due to the so-called “base effects.” For the second quarter alone, its income reached P1.9 billion or 13 times higher than the P138.93 million recorded last year. revenues for the quarter, meanwhile, grew almost fourfold to P5.53 billion from the previous year’s P1.42 billion.

8990’s sales in the first half came mostly from Luzon which accounted for P6.74 billion, or 71 percent of the total; sales from the Visayas contributed 15 percent or P1.47 billion, while Mindanao’s share was 13 percent or P1.27 billion.

In terms of total units sold during the period, Luzon accounted for 56 percent or 3,318 units; Visayas, 27 percent or 1,606 units; and Mindanao, 16 percent or 965 units.

The company’s gross margin declined to 49.5 percent from 54.6 percent, while net income margin improved to 34.5 percent from 30.2 percent last year.