8990 earnings drop 44% in H1

MANILA, Philippines - 8990 Holdings Inc. reported a 44 percent decline in it first half profit to P1.2 billion amid the challenging business environment in the housing sector following the change in administration.

Revenues likewise dropped 36 percent to P3 billion as business was affected by the continued delays of licenses for new projects and labor shortage in the construction sector.

Despite the company’s lackluster performance, 8990 remains bullish on the prospects of 2017 even with the slow start for the year.

Compared to its internal target of P1.3 billion, first half net income was down by only five percent, 8990 president Januario Jesus Atencio III said.

“Historically, a change in government normally leads to a temporary disruption in our growth as a result of these political changes. And the change of government in 2016 is no exception,” he said.

Nevertheless, he said 8990 has always been able to adapt to change quickly, instituting reforms and innovations needed to confront these issues allowing us to bounce back strongly, pushing the company to new and greater highs in the years to come. 

“This is what I mean: we bounced back with P189 million in 2005 from declining revenues in 2003 and 2004 when Gloria Macapagal-Arroyo became president. We rebounded to reach P3 million in 2009 from P2.3 billion after the 2008 financial crisis. We posted a 60 percent growth to P4.2 billion in 2012 from P2.6 billion in 2010 after the election of Benigno Aquino III, growing this by 3.6 times to P9.3 billion in 2015 as President Duterte takes over the government in 2016.

The pattern is unmistakable, and therefore, a source of comfort,” Atencio said.

Sales reservations went up three percent to  8990 as more projects have already been launched versus the previous year.

 In 2016, 8990 was able to launch only six of the 14 planned projects. In the first half, however, the company had already launched five projects.

The company  expects to launch six more by the end of the year.

 During the first half, 8990 launched 32,993 units including Deca Homes Marilao in Bulacan, Deca Homes Mulig in Davao, Deca Home Pavia Resorts and Residences Phase 2 in Iloilo, Deca Home Santa Barbara in Iloilo and South of Bacolod in Bacolod.

 The company expects to launch an additional 27,772 units by the end of the year.

Atencio said 2017 would bring in more challenges given the change in government, adjustment to organizational changes implemented to improve cash generation and the continued roadblocks posed by slower permits issuances and skills labor shortages.