CENTURY Properties Group, Inc. (CPG) saw its profit fall by 10.59% in 2017, in line with its diversification into the affordable housing market in recent years.
The Antonio-led property developer reported a P649.9-million net income last year, lower than the P726.9 million it delivered in 2016, according to a regulatory filing on Monday.
“Our financial results came in as an expected consequence of the early stages of our diversification plan. It was, however, a critical strategy to minimize risk and generate growth moving forward,” CPG Director for Investor Relations Kristina Lowella I. Garcia said in a statement.
The listed firm known for its development of high-rise luxury projects ventured into the affordable housing market last year, as it aimed to meet the housing backlog in the country amid a growing middle class.
CPG then partnered with Mitsubishi Corp. for the development of PHirst Park Homes Tanza in Tanza, Cavite, a 26-hectare project offering 3,000 units priced between P1 million to P3 million each. The company expects to complete 420 of these housing units by the end of this year.
This diversification program further allowed the company to enter into leisure and tourism developments and into leasing properties.
“It has been our top priority to drive growth through the diversification of our business. Our strategic decision to invest in allied real estate segments with potential high return opportunities has positioned us well for the coming years,” Ms. Garcia said.
With this, revenues grew by 7.66% to P6.04 billion, following the increase in real estate sales, higher leasing revenues, and property management fees.
Real estate sales accounted for majority of CPG’s revenues, which stood at P5.35 billion, higher by 7.6% year on year.
“The increase in real estate sales is attributable to the increase in selling price of the units among projects and additional projects with recognized revenue in both condominium and affordable projects during the year,” the company said.
The company’s leasing revenues picked up 1.13% to P341.17 million last year. CPG credited the increase to the 96.3% occupancy rate in Century City Mall in 2017, compared to 95.5% in 2016.
CPG expects revenues from leasing units to increase five-fold to P1.5 billion by 2020, as it expands its gross floor area to 302,000 square meters (sq.m.) from the current 133,000 sq.m.
Property management feels likewise rose 16.84% to P353 million, as the company managed additional properties.
CPG said it spent a total of P6.76 billion in capital expenditures last year.
Shares in CPG went down by a centavo or 2% to close at 49 centavos apiece at the stock exchange on Monday. — Arra B. Francia