Project delays weigh on earnings
MASS housing developer 8990 Holdings Inc. reported a modest uptick in its net income in 2016 as delays in the processing of permits also delayed project launches, resulting in deferred income.
In a financial briefing on Tuesday, 8990 said its net income last year grew to P3.81 billion from P3.7 billion in 2015, as gross revenues inched up just 1 percent to P9.4 billion from P9.28 billion previously.
The flat revenue growth was mainly caused by eight delayed projects that were intended to be launched in 2016. It said P2.4 billion worth of projects, which translates to 2,706 units, were delayed due to problems incurred in the permits process.
“Permits are about to be finished and these are now part of the launches for 2017,” President and Chief Executive Officer Januario Jesus B. Atencio III said.
Among the delayed projects, three are located in Davao, two in Iloilo, two in Cebu and one in Bacolod.
Atencio said these eight projects will be included in the launches for this year, which will bring to 11 the total number of projects to be launched this year.
“We wish to emphasize that these revenues are not lost, but merely delayed,” Atencio said.
For this year, the developer expects its net income to climb by 41.7 percent to P5.4 billion, while gross revenues are seen growing to as much as P13.5 billion. The earnings guidance is driven by the 11 projects to be launched this year, which translates to 60,765 units.
“We expect to launch three projects in the first quarter, followed by five in the second and closing the third with three more,” 8990 said.
“We’re now hopeful for 2017 because all of these projects that were delayed will now be on stream,” Atencio reiterated.
The company also said that in 2016, it purchased an additional 191 hectares of raw land, valued at P5 billion, bringing the company’s total land bank to 655.15 hectares.
“The present land bank will provide an estimated 145,000 units with gross selling value of P175 billion,” it said.
Among the new acquisitions made last year in Metro Manila were a 3.4-hectare property in Las Pinas, a 2.0-hectare parcel of land along Litex Road in Commonwealth, Quezon City; a 5-hectare lot in Brgy. Old Balara, Quezon City, and a 2.8-hectare property in Mendiola/Otis.
In addition, the company also bought a 70-hectare lot in San Miguel, Iloilo, a 62-hectare property in Granada, Bacolod; a 44-hectare lot in Meycauyan, Bulacan and a 1.8-hectare land in Banilad, Cebu.