PSE oks 8990 Holdings’ P5B preferred shares offer
The Philippine Stock Exchange has approved a P5 billion perpetual preferred shares offering planned by leading mass housing developer 8990 Holdings to refinance existing debt.
Based on a memorandum circular issued by the PSE, the offering will run from Nov. 17 to 23 while listing is on Dec.1.
8990 Holdings plans to offer 50 million preferred shares at P100 each.
The dividend rate for the preferred shares was set at 6.0263% per annum. Under the terms of the offer, 8990 Holdings will have the option to redeem the shares on the fifth year. Unless these are redeemed, the dividend rate will be adjusted higher.
The housing developer has appointed China Bank Capital Corp. lead underwriter for this transaction.
In the third quarter, 8990 Holdings grew its net profit by 9 percent year-on-year to P1.2 billion, citing strong housing demand across the country.
Due to slower business in the first semester, however, 8990 Holdings’ nine-month net profit declined by 22.7 percent year-on-year to P2.46 billion.
Third quarter revenues grew by 29 percent year-on-year to P3.1 billion. Revenues for the first nine months stood at P6.1 billion, 14 percent lower year-on-year.
Net income margins remained stable at 40 percent.
Incoming 8990 Holdings president and chief executive officer Willie Uy said: “Momentum has shifted to create a turnaround in our third quarter revenues. 8990’s presence in Luzon, Visayas and Mindanao allows us to easily capture the growing affordable housing demand across the country. The real challenge for us now is keeping up with the ever-growing housing demand which so far has resulted in a housing backlog of 5.9 million.”
“This quarter we saw how fast the market can absorb readily available units in developments such as Iloilo and Manila. Once we started completing units and securing permits, we saw number of units sold in Iloilo go up by 204 percent while recognized units sold in Manila nearly doubled from what it did in the first half of 2017,” he said.
A total of 4,431 units were delivered in the first nine months of the year with Luzon contributing 59 percent of total, followed by the Visayas regions with 30 percent and Mindanao with 11 percent.
Meanwhile, income from its contract-to-sell portfolio amounted to P1.1 billion, up by 3 percent year on year.
“In-house financing makes affordable housing more accessible to buyers while providing the company with some recurring revenues. Our in-house financing facility is mainly a stepping stone for our buyers to secure their homes while their application with HDMF (Home Development Mutual Fund or Pag-IBIG) is still being processed. Our final goal is to move these accounts to the HDMF once our receivables have been seasoned. The 129 percent year-on-year increase of our HDMF take outs in the first nine months of the year reflects our aggressive stance in our HDMF take-out activities,” Uy said.
As of the first nine months of the year, 8990 Holdings has doubled its HDMF loan take-outs to P3.96 billion from just P1.73 billion in the same period last year. Meanwhile, CTS purchases made by banks hit P1.23 billion or 45 percent higher.
“Our third quarter performance shows that we have been able to achieve a new momentum. We have revenues heading in the right direction and the 8990 team has been working tirelessly to put the company in the position to end the year strong with at least P10 billion in revenues,” Uy said.
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