Eton spending P10B for projects in next 3-4 years

Eton Properties Philippines Inc., a subsidiary of Lucio Tan’s LT Group Inc., is spending about P10 billion over the next three to four years to complete its residential and commercial projects in the pipeline, an official said on Friday.

Danilo Antonio, Eton’s chief operating officer, told reporters after the company’s annual stockholders’ meeting that new projects, including those under its retail and business process outsourcing (BPO) segment, would help increase its recurring earnings.

For this year alone, the company is spending P3 billion to P4 billion. He said many projects to be launched would be new phases in existing developments, mainly in Metro Manila.

On the commercial side, Antonio said the company was considering the expansion of its mall in the 12-hectare Eton Centris development in Quezon City.

“We intend to increase the retail area of Eton Centris. Right now, it is just an idea. We are thinking of (developing) two to three hectares (for the mall expansion),” he said. “There is a master plan that was approved and we are just following it.”

The project, together with the expansion of its BPO presence in Eton Centris, will help the company diversify its revenue stream.

He said the company was currently generating about 18 percent to 20 percent of its income from recurring or rental earnings. Antonio said the goal was for the company to achieve a more balanced mix between real estate sales and rental income.

With these investments, the company hopes that earnings will recover and ramp up after it took a hit last year. Like other developers, Eton books earnings as the construction of projects reaches certain milestones.

But in 2012, the company modified the designs of several projects, delaying construction and earnings recognition. Eton’s net income last year fell by 94 percent to P42.04 million as revenue dropped by 49 percent.

The builder has started to recover in the first quarter of 2013, posting a net income of P127.5 million from P19 million a year ago. Revenue almost doubled to P1.16 billion.