8990 profit down 44%

Mass housing developer 8990 Holdings reported a 44-percent drop in first semester net profit to P1.2 billion as delays in obtaining permits had pushed back new projects, thereby curbing revenue.

Revenue hit P3 billion in the first six months, down by 36 percent from a year ago, 8990 Holdings told the Philippine Stock Exchange yesterday.

Compared to internal targets, 8990 Holdings said its six-month performance was 5 percent below. It added that first-semester profit was “well within the internal target.”

8990 Holdings was targeting to generate P1.3 billion in net profit out of P3.2 billion in revenue in the first semester.

“Main reasons for this dip are the continuing delays in the new projects’ licenses, labor shortages in the construction finishing and the momentum build-up of recently launched projects,” it said.

8990 Holdings’ sales reservations grew by 3 percent year-on-year in the first half. The company reported weak performance in key result areas mainly from labor shortages, stricter underwriting procedures and the momentum build-up of newly launched projects.
Housing production and deliveries declined by 24 percent and 53 percent year-on-year respectively.

Earnings from its contract-to-sell CTS portfolio grew by 10 percent year-on-year to P765 millions despite a 2-percent decline in the CTS portfolio.

“Given the need to focus on strengthening the company’s balance sheet, in the wake of increasing interest rates, and a tougher permits and licensing environment, the goal for 2017 is cash generation to pare down short-term and medium-term debt,” the company said.

8990 Holdings remains bullish on the prospects of 2017 despite an expected slow start for the year.—DORIS DUMLAO-ABADILLA