The Market Monitor Minding the Nation's Business
Leading mass housing developer 8990 Holdings Inc. booked a 23 percent growth in earnings and exceeded its full-year target of P4 billion on the back of the company’s strong presence, brand acceptance, building innovation and track record of housing delivery in the growth centers of the country: NCR, Angeles, Cebu, Iloilo and Davao.
The company’s net income reached P4.05 billion last year or P746 million higher compared to P3.31 billion booked in 2014, as gross sales rose 24 percent to P9.65 billion from P7.79 billion amid strong sales and increased construction capacity.
Meanwhile, core business income, which comprises housing and CTS net revenues, breached the P10 billion milestone with P10.7 billion from P8.4 billion last year, registering a 27 percent increase. Income from contract to sell (CTS) receivables jumped 33 percent to P1.2 billion from P900 million.
About 85 percent of total revenues came from Deca Homes subdivisions located in Cavite, Pampanga, Iloilo, Davao and General Santos, while 15 percent were contributed by medium-rise Urban Deca Homes projects in Cebu and Muntinlupa.
8990 was able to expand its land bank close to 500 hectares with an expected yield of a little over 100,000 housing units worth P109 billion. The company purchased land in Davao, Iloilo, Bacolod as well as in Las Piñas and Cubao last year.
For 2016, the mass housing developer 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.
The mass housing developer is set to launch 14 new projects that would add 75,608 units worth P7.3 billion to its inventory. The projects include horizontal developments under the Deca Homes brand in Bulacan, Iloilo, Cebu, Davao, and Bacolod as well as medium-rise building projects under the Urban Deca Homes in Cavite, Cebu, and Manila.
In addition to the new projects, the company said 11 ongoing projects would provide an additional 5,377 units worth P4.8 billion this year.
For the fourth quarter of 2015, the company’s net income surged 86 percent to P887 million from P477 million in the same quarter in 2014 as sales increased by 67 percent to P2.59 billion from P1.55 billion.
The company noted the external threats to the housing industry this year including a potential delay in the release of permits for new projects due to the presidential, national and local elections in May as well as the longer processing of accreditation by the Board of Investments (BOI).
8990 also cited the tension in the Middle East particularly between Saudi Arabia and Iran as well as the continued softening of oil prices that may affect the monthly amortization payments of overseas Filipino workers in the petroelum industry as well as seafarers manning the oil tankers.