8990 Holdings posts 74% profit growth

MANILA, Philippines–Listed mass housing builder 8990 Holdings Inc. said its profit rose by 74 percent to P1.02 billion in the third quarter as margins increased.

In a statement, the company said it had sustained growth of 60 percent in gross revenue and 45 percent in net margin in the past three quarters. The company also attributed its performance to improving economic prospects in the country.

Company president and CEO Januario Jesus Atencio said sales to Filipinos working overseas accounted for at least a quarter of the company’s sales. That share increases to about 40 percent when counting families in the Philippines supported by remittances from workers abroad.

“Internally, we’ve anticipated this, so we worked hard to open up nine new projects this year with three more scheduled to start before the end of the year. At the same time, we increased our annual production capacity by 35 percent to 10,560 units, or an additional 2,500 units from 8,000 units from last year,” he added.

Atencio said a big contributor to increased performance this quarter was the growing market acceptance of Deca Home’s innovative in-house financing program called CTS-Gold that continued to provide working class Filipinos easy access to owning their first primary asset.

Customer demographics for 8990 indicate that 66 percent of its buyers are young (23-39 year years old), college-educated, gainfully employed, earning a monthly salary of at least P30,000.00, generally optimistic about their future and aspiring to move up from being renters to home owners.

Atencio reported that, out of the 5,867 housing units that had been delivered to homeowners this year, their projects in Cebu and Davao accounted for 54 percent, or 3,161 units. Luzon projects in Angeles and Cavite accounted for 35 percent with 2,064 units, while Iloilo contributed 642 units or 11 percent of total delivery.

He added that 87 percent of revenue this quarter was derived from their housing subdivision projects, while 13 percent came from their medium-rise building (MRB) project in Mandaue City, Cebu.

For the third quarter, 8990’s migration of their CTS accounts to Pag-IBIG Fund amounted to P425 million, or P1.573 billion total for the three quarters this year.