MANILA, Philippines–Mass housing developer 8990 Holdings Inc. generated P4.1 billion from the sale of housing units in the first semester, doubling the level seen in the same period last year and putting the company on track with its full-year gross revenue goal of P8 billion.
In a press briefing on Thursday, 8990 Holdings president Jesus Atencio said net margins were steady at an average of 43 percent in the first semester.
The first-semester guidance given by Atencio suggested that 8990 Holdings may have posted a net profit of P1.76 billion in the six-month period. The first-semester result is expected to be reported in the next few days.
The P4.1-billion worth of housing units from which 8990 Holdings generated revenues in the first semester consisted of about 3,715 units. For this full year, the company is targeting to unlock revenues from 7,500 units.
Compared to gross revenues in the first semester of 2013, the first-half performance suggested a growth of 110 percent year on year, Atencio said.
“This was because of the launch of new projects,” Atencio said, noting the housing projects rolled out in late 2013 whose “velocity is only being felt in the first half of 2014,”
Atencio said 8990 Holdings’ rising receivables was in line with the growth in its business as the company stepped up in-house financing activities to cater to market demand.
“I see nothing wrong with receivables as long as we’re cash flow neutral,” Atencio said, adding that 8990 Holdings was effectively managing these receivables and generating enough cash to fund ongoing projects. At the same time, he said the company had been able to expand its landbanking to ensure continued growth in the future.
Under 8990 Holdings’ in-house financing program called CTS (contract to sell) Gold, homebuyers are required to shell out only 2 to 5 percent equity while other terms are similar to the housing loan guidelines of the state-owned Home Development Mutual Fund or Pag-Ibig: a low interest rate starting at 8.5 percent per annum, 25-year loan terms, and a monthly amortization cap of 40 percent of net disposable income. This allows the company to migrate the CTS portfolio to Pag-Ibig.–Doris C. Dumlao