LEADING mass housing developer 8990 Holdings grew its net profit in the first quarter by 10 percent year-on-year to P1.03 billion as a buoyant economic continued to buoy the housing market.
For the whole of 2016, 8990 Holdings sees its net income growing by 20 percent to P4.8 billion on the back of a 24 percent increase in revenues to P12 billion.
In a press statement on Tuesday, 8990 president and chief executive officer Januario Jesus Atencio said a strong mass housing market was evident in the company’s reservation sales of 1,289 units worth P1.5 billion yet to be booked as revenues. “This momentum is expected to propel our performance for the second quarter,” he said.
Higher selling prices alongside higher volume helped boost 8990 Holdings’ gross sales by 10 percent to P2.17 billion in the first quarter compared to the same period last year.
Average selling price of 8990 Holdings increased by 11 percent to P1.08 million from P980,000 while it also delivered 2,003 units worth P2.17 billion in the first quarter as against last year’s 1,582 units worth P1.93 billion.
As such, 8990 Holdings reported a higher net margin of 47 percent, beating the 40 percent target for the first quarter.
Revenues from housing operations rose by 14 percent year-on-year to P2.51 billion from P2.21 billion. Sales reservations jumped by 21 percent to 1,870 units from 1,543 units which the company attributed to a “bullish market for affordable housing and growth in production as well as deliveries.”
Meanwhile, the developer’s other income jumped 34 percent to P432 million in the first three months after the reclassification of non-core revenue from the top line including Azalea Hotel and timeshares.
To sustain growth, 8990 Holdings continued to beef up its landbank, purchasing 76.24 hectares in Manila and Iloilo to augment its existing inventory of 553 hectares worth P112 billion.
The developer is set to launch Deca Homes in Marilao, Sta. Barbara, Pavia as well as Urban Deca Homes Mahogany and Hernan Cortez in the second quarter after introducing Deca Homes Baywalk Talisay 3 and Urban Deca Homes Hampton.
The company intends to launch 14 projects, bringing to the property market 75,608 housing units worth P7.29 billion this year.
Because 8990 Holdings is launching 14 new projects this year, the company has anticipated that 50 percent of this year’s performance will be realized in the fourth quarter. “So, as we exceeded our internal first quarter targets of P1.8 billion by 22 percent, we are working hard to be sure that these new projects get on stream as quickly as possible,” Atencio said.
Last year, 8990 Holdings exceeded its P4 billion profit target after it registered a 23 percent growth in earnings to P4.05 billion. Gross sales jumped by 24 percent last year to P9.65 billion.
The developer intends to ride on the country’s strong private consumption that continues to fuel strong economic growth. The Philippines domestic output as measured by the gross domestic product grew at a faster pace of 6.9 percent in the first quarter, the fastest in Asia, from the revised 6.5 percent in the fourth quarter.