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Profits of Shang Properties Inc. surged by more than
half last year when it adopted new accounting standards and posted
higher rental income, the real estate developer disclosed to the
Philippine Stock Exchange.
The firm’s annual report showed
a 55.4-percent increase in net income to P944.5 million as gross
revenues jumped by 95.9 percent to P3.1 billion year on year. Among
the revenue contributors at end-2007 were the condominium unit sales
of The Shang Grand Tower (TSGT) and The St. Francis Shangri-La Place
(TSFSP) whose combined sales growth reached 104 percent to P1.5
billion.
“The increase is mainly because
of the accounting standard of recognizing the sales based on
percentage of completion method,” the company reported.
Also contributing to company
profits is the rental income that went up by 11.1 percent to P886
million on the back of increase in rental rates and higher sales of
tenants. The company leases floor areas to tenants in Shangri-La
Plaza Mall and earns carpark fees. It also leases land to its
affiliate, EDSA Shangri-La Hotel and Resort Inc.
The company’s interest income
also surged by 382.9 percent to P297 million year on year on the
back of accretion of installment receivables. Meanwhile, earnings
from the discounting of long-term receivables from condominium sales
reached P216.6 million. In addition, its share in the profits of KSA
Realty Corp. went up by P65.3 million to P127.7 million owing to the
increase in KSA’s net income.
Cost and expenses last year rose
by 69.6 percent to P1.9 billion from 2006 as cost of condominium
units increased by 128.3 percent due to the adoption of the
percentage of completion method in recognizing sales and costs of
projects.
At end-December, Shang
Properties’ total assets grew by P4.2 billion to P24 billion while
cash and cash equivalents increased by 10.6 percent to P132.2
million due to the collection of sales proceeds from TSGT and TSFS.
Profit attributable to
shareholders, which represents net income from operations after tax
of the Shang properties, climbed by 55.4 percent on the back of
increased condominium sales and appraisal value of investment
properties. Earnings per share increased by 47.4 percent year on
year as profits rose while the number of outstanding shares
increased.
--Likha Cuevas-Miel
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