8990 Holdings net profit tops billion

Listed mass housing developer 8990 Holdings, Inc. continued to book a double-digit expansion in earnings, with profits growing 10 percent in the first quarter of the year despite higher financing costs.

In a disclosure to the Philippine Stock Exchange, 8990 said its net income reached R1.03 billion from January to March this year compared with R937 million in the same period last year.

According to 8990 president Januario Jesus Atencio, “evidence of a strong mass housing market is our unrealized sales of 1,289 units, equivalent to R1.5 billion. This momentum is expected to propel our performance for the second quarter.”

Higher selling prices helped boost gross sales by 10 percent to R2.17 billion in the first quarter of the year from R1.97 billion in the same period last year.

The developer’s average selling price increased by 11 percent to R1.08 million from R980,000 as it delivered 2,003 units worth R2.17 billion in the first quarter as against last year’s 1,582 units worth R1.93 billion.

This translated to a higher net margin of 47 percent instead of the 40 percent target for the first quarter.

Revenues from housing operations rose 14 percent to R2.51 billion from R2.21 billion while sales reservations jumped 21 percent to 1,870 from 1,543 on the back of a bullish market for affordable housing and growth in production as well as deliveries.

Finance costs more than doubled to R193 million from R94 million due to higher interest payment for its corporate bonds. In all, the company’s operating expenses inched up by two percent to R375 million from R367 million.

Likewise, the developer’s other income jumped 34 percent to R432 million in the first three months of the year from R321 million after the reclassification of non-core revenue from the top line including Azalea Hotel and timeshares.

The company intends to launch 14 projects with 75,608 housing units worth R7.29 billion this year.