Mass housing developer 8990 Holdings Inc. posted a 3-percent increase in net income in the first half of the year as it exceeded its target for housing deliveries, the company reported on Monday.
In a statement, 8990 reported a net income of P2.18 billion in the first half of 2016, 3 percent higher than the P2.12 billion posted in the previous year.
The growth was attributed to the 6 percent growth in gross sales to P4.73 billion from the P4.45 billion.
The company reported that it was able to exceed its target housing delivery volume by 32 percent to 4,289 units, which translates to a value of P4.73 billion. For the first half of 2016, 8990 aimed to deliver a total of 3,899 units.
“Reservations inched up by one percent to P4.37 billion in the first half,” 8990 said.
On a quarterly basis, net income inched up by 12 percent to P1.15 billion from the P1.03 billion posted in the first quarter of the year.
8990 President and chief executive officer Januario Jesus Atencio attributed the higher number of unit deliveries to the pre-cast housing technology, which allows the company to build strong houses in as fast as eight days.
“Since the use of pre-cast wall panels in 2004 instead of hollow blocks in building houses, 8990 has produced 43,306 units in 39 completed projects,” the company said.
Atencio disclosed that the company is ramping up with an additional 56 forms with a capacity of 28,320 units this year from last year’s 14,880.
The fast construction of housing units is part of 8900’s business model according to Atencio.
“Our buyers are deeply aspirational – they want to move up from being renters into property owners. But they are practical – they want value for money. And they are optimistic,” Atencio said.
Despite exceeding its target number of units in the first half of the year, Atencio noted that the company saw delays in project launches, mainly caused by delays in permits.
In the first half of the year, 8990 only launched four projects namely Deca Homes (DH) Baywalk Talisay 3 in Cebu, Urban Deca Homes Hampton in Cavite, Urban Deca Homes Manila, and Urban Deca Homes in Hernan Cortes in Cebu.
For the third quarter the company is set to launch seven projects: Urban DH
Marilao, UDH Mahogany Cavite, DH Pavia RR-2, DH Sta.Barbara in Iloilo, DH South of Bacolod, DH Mactan Prime and UDH Tisa 2 Cebu.
Meanwhile, total revenue from housing operations increased by 9 percent to P5.4 billion from last year’s P4.99 billion.
The growth is attributed to the 21 percent growth of Contracts-To-Sell (CTS) income to P649 million the P575 million posted last year.
“Bulk or about 89 percent of the gross income came from new sales while 11 percent were realized from canceled accounts,” 8990 said.
Atencio emphasized that the milennial market or individuals aged between 20 to 35 years are the major buyers of the company, as they account for 55 percent of total sales.
In addition, 8990 reported that it grew its land bank to 555 hectares with an expected yield of over 107,376 units worth P115 billion. The company recently purchased at two-hectare lot at Litex Road, Commonwealth in Quezon City.