8990 Q1 income up 10%

MANILA, Philippines – Listed mass housing developer 8990 Holdings Inc. posted a 10 percent growth in net income in the first quarter despite higher financing costs.

In a disclosure to the Philippine Stock Exchange, the Filipino-owned company said its net earnings from January to March rose to P1.03 billion, P95 million higher than the same period a year ago.

Revenues from operations expanded 14 percent to P2.51 billion. Similarly, sales reservations grew 21 percent to 1,870 units.

8990 president and chief executive officer Januario Jesus Atencio attributed the growth to the robust mass housing market.

“Evidence of a strong mass housing market is our unrealized sales of 1,289 units, equivalent to P1.5 billion. This momentum is expected to propel our performance for the second quarter,” Atencio said.

 Higher selling prices helped boost gross sales by 10 percent to P2.17 billion. Average selling price increased 11 percent to P1.08 million.

The company delivered 2,003 units worth P2.17 billion during the first quarter, higher than the previous year’s 1,582 units valued at P1.93 billion.

 “This translated to a higher net margin of 47 percent instead of the 40 percent target for the first quarter,” Atencio said.

Direct costs went up 14 percent to P946 million after the company booked re-sale accounts based on outstanding principal balance. Finance costs more than doubled to P193 million due to higher interest payment for its corporate bonds.

During the quarter, 8990 continued to beef up its landbank, purchasing 76.24 hectares in Manila and Iloilo to augment its existing inventory of 553 hectares worth P112 billion.

 The company intends to launch 14 projects with 75,608 housing units worth P7.29 billion this year.

 “Because we are launching 14 new projects this year, we have anticipated that 50 percent of this year’s performance will be realized in the fourth quarter. So, as we exceeded our internal first quarter targets of P1.8 billion by 22 percent, we are working hard to be sure that these new projects get on stream as quickly as possible,” Atencio said.

For this year, the company  has set a net income and revenue target of P4.8 billion and P12 billion, respectively.