HIGH-END property developer Shang Properties Inc. reported a 5.31 percent decline in its net income for the first six months of the year as higher outweighed increased condominium sales.
In a financial report to the Philippine Stock Exchange, Shang Properties said its net income for the first six months dropped to P1.25 billion from last year’s P1.32 billion, pressured by higher expenses.
Shang Properties said the group’s expenses surged by 39 percent to P2.8 billion from the P2.0 billion posted last year.
Consolidated revenues rose 18.14 percent to P4.81 billion in the first half compared to P4.07 billion a year ago, as condominium sales advanced 11.1 percent to P2.86 billion from the P2.58 billion recorded last year.
Shang Properties attributed the rise in condominium sales to the completion levels of various condominium projects.
Also, the company received income of P372.9 million from its newly-opened Shangri-La at the Fort hotel, which began its operations last March.
Meanwhile, rental revenue inched up 1.8 percent to P1.35 billion from last year’s P1.33 billion.
“Rental revenue increased by P23.7M mainly due to rental escalation and higher rental yields of The Enterprise Center as compared to the same period last year,” Shang Properties said.
Shang Properties earlier said it would hike its ownership stake in its subsidiary KSA Realty Corp.–owner of the The Enterprise Center– as it has acquired 85.77 percent of 207,082 shares of Ocmador Philippines B.V. in KSA for P1.42 billion.
The property developer said the transaction would raise the company’s equity in KSA from 52.9 percent to 70 percent.
For 2016, Shang Properties is looking at capital spending of at least P4 billion as it focuses on the residential market.