Mass housing developer 8990 Holdings Inc. is targeting a net income of up to P4 billion and total revenues of P10 billion for 2015 after the company surpassed its own 2014 profit and sales guidance.
“We’re looking at a 22 percent to 27 percent increase in net income for 2015.
Revenues should be at a maximum of P10 billion, while income is at P4 billion max based on a 60 percent gross margin and 40 percent net margin,” 8990 Holdings president and CEO Jesus Januario Atencio said in a briefing.
Atencio said the company raised its earnings targets for this year following a better-than-expected performance in 2014, with unaudited net income surging by 52 percent to P3.3 billion, above the targeted P3 billion for 2014 and the P2.18 billion profit in 2013.
Full-year revenues also advanced 48 percent in 2014 to P7.9 billion from P5.3 billion in the previous year.
Atencio said earnings were driven by continued economic growth, increase in overseas workers’ remittances, the growing business process outsourcing (BPO) and IT sectors, and the country’s 4 million housing backlog which continues to fuel
Low-cost and affordable housing are usually aided by Pag-IBIG funds, but Atencio said that 8990 has improved its in-house financing scheme under CTS Gold, which also contributed to its sales last year.
The company said it will build a total of 11,000 housing units for 2015 with the majority to built in Luzon (44 percent) while the Visayas and Mindanao will take up 31 percent and 25 percent, respectively.
“We target 11,000 homes for 2015, majority in Luzon, which is good because Luzon is a new area for exploration and development of HOUSE. We are established in Visayas and Mindanao, but there’s more competition in Luzon. If we can survive the competition, then we’re optimistic that we can grow to P10 billion in revenues,” Atencio said.
House is the ticker symbol of 8990.
For this year, 8990 is set to launch nine new projects totaling 4,486 units valued at nearly P4 billion. The company also launched nine projects last year totaling 10,855 housing units.
Atencio said 8990 spent around P8 billion for land acquisition in 2014 to complete the targeted land bank of 500 hectares.
He said the company is setting aside P2 billion to P3billion in capital expenditure for land banking this year to meet the remaining 100 hectares of the 500-hectare goal.
“Overall, the industry is still looking good. The growth of HOUSE is tied to GDP (gross domestic product). As long as the GDP is increasing, that will give us confidence in staying in the business,” Atencio said.
Formerly an IT and telecommunications firm, 8990 Holdings is engaged in building low-cost and affordable housing units but is now diversifying into the medium and high-rise residential segment through partnerships with industry players.