8990 sees 2017 profit hitting P14B
Mass housing developer 8990 Holdings expects to post P13 billion to P14 billion in revenue this year, much better than the 2016 performance.
Last year, 8990 Holdings’ revenue was targeted to grow by 20 percent to P12 billion. Full-year figures are yet to be released.
Five projects slated to be launched last year were pushed back due to factors beyond the company’s control, such as delays in the processing of permits, 8990 Holdings president Januario Jesus Gregorio Atencio III told reporters at the sidelines of the company’s special stockholders meeting Wednesday.
These delays have cost 8990 Holdings about P2 billion in foregone revenue in 2016. This, however, is expected to be added to potential revenue this year, Atencio said.
8990 Holdings expects to expand its footprint in Metro Manila this year.
Its net profit for full year 2016 is trending flat, based on the performance in the first nine months. Actual results will be announced by the company next week.
On Tuesday, 8990 Holdings obtained leeway to offer up to P5 billion worth of preferred shares to the public, targeted for issuance by July this year. Proceeds from the offering will be used to refinance debt and fund its expansion program.
8990 Holdings obtained shareholders’ approval to convert 100 million in unissued common shares into non-voting preferred shares. Shareholders also approved the “shelf registration” of these 100 million preferred shares worth P10 billion.
The initial tranche is worth P5 billion consisting of 50 million shares.
Roan Buenaventura-Torregoza, chief finance officer of 8990 Holdings, said the company had mandated China Bank Capital to arrange the preferred shares offering.
The bonds will carry a step-up rate on the fifth year, which means the interest rate will increase if they are not redeemed by 8990 Holdings, giving the bonds a synthetic maturity of five years.
Under the Securities and Exchange Commission’s “shelf registration” window, issuers are allowed to register and sell under the same prospectus within a three-year period a certain volume of securities that the issuer does not intend to use up right away.
The shelf registration is crucial in finding a good timing to proceed with a planned securities issuance especially when financial markets are volatile. This allows the issuer to complete all the tedious paperwork and thereby lay the groundwork for a future issuance and immediately go to market as soon as conditions are favorable.
