Property developer Century Properties Group Inc. (CPG) posted an 11.1 percent year-on-year decline in first semester net profit to P445.81 million on slower residential development revenues.
Six-month real estate revenues fell by 29.3 percent year-on-year to P2.10 billion as revenues had already been recognized in prior years from project completions while there were fewer launches of condominium projects in line with its transition and streamlining plans, CPG said in a press statement on Tuesday.
For the second quarter alone, CPG’s net profit declined by 61.2 percent year-on-year to P152.36 million likewise due to slower real estate sales revenues.
With the benefits of stable macroeconomic conditions and favorable interest rates, however, CPG remains optimistic on the real estate industry.
“The key milestones, particularly the launch of PHirst Park Homes and, soon, of our first tourism-oriented development, will be part of our cornerstones to long term growth,” said Kristina Garcia, CPG director for investor relations.
In May, CPG launched PHirst Park Homes Tanza, its first affordable housing project. PHirst Park Homes projects will cater to first time home buyers and is a product platform that the company is undertaking with leading Japanese conglomerate Mitsubishi Corp.
“The projects that we are bringing online will have very sound economics and potential to increase our margins. Looking forward, we will continue to deliver projects that will accelerate growth and enhance shareholder value,” said Garcia.
For the first six months, CPG’s total revenues fell by 14.3 percent year-on-year to P3.35 billion.
Outside of residential revenues, property management fee and other services increased revenues while leasing revenues were flat.
In line with its plan to become a more diversified, multi-product company by 2020, the company streamlined its business beginning 2014 and announced earlier this year that it was expanding into allied business segments of affordable housing and tourism.
PHirst Park Homes, for instance, intends to address the country’s vast housing backlog, currently estimated at 5.7 million units, based on data from the Housing and Urban Development Coordinating Council.
CPG reported that PHirst Park Homes Tanza had generated strong sales. Since its launch, the company has sold 828 of 1,039 units of the first phase of the project, amounting to P1.03 billion in value. Of the total number of units sold, 90 percent are for end use, 85 percent have household incomes ranging from P30,000 to P60,000 per month and 43 percent are funded by overseas income, the company said.
Given the high demand for such mass housing units, the company intends to accelerate the launch of the second phase of the project, which was originally scheduled for 2018.
In addition, CPG intends to replicate PHirst Park Homes Tanza in new areas in CALABARZON (Cavite-Laguna-Batangas-Rizal-Quezon) growth area as well as Central Luzon. It targets to launch at least three new multi-phased projects in 2018 alone.
For tourism, CPG plans to launch its first tourism-oriented development in the latter part of the year. It will initially launch 6.6 hectares of its 142-hectare landbank in Batulao, Batangas. The project will have about 306 homes with estimated revenues of P1.88 billion.
The company decided to pursue projects in the affordable housing and tourism space, given their relatively shorter gestation periods. Nonetheless, CPG will continue to build in-city project in highly strategic locations.