EARNINGS of 8990 Holdings, Inc. fell 58% in the second quarter as the mass housing developer continued to experience delays in securing permit for new projects.
The listed real estate firm posted a net income of P485 million in the April to June period, against the P1.15 billion in the same period last year. Revenues also dipped by 43% to P1.45 billion in the second quarter from the P2.56 billion it generated a year ago.
This brought the company’s first-half profit to P1.22 billion, 44% lower year on year, following a 36% drop in revenues to P3.04 billion.
“We’ve already anticipated a slow start to 2017 given, historically, a change in government normally leads to a temporary disruption in our growth as a result of these political changes,” 8990 Holdings President and Chief Executive Officer Januario Jesus Atencio III said in a statement.
8990 Holdings further attributed the decrease to the continuing delays in the processing of new projects’ licenses and labor shortages in construction.
In 2016, the company launched only six projects out of the targeted 14. Five of these delayed projects have since been launched in the first half of 2017, consisting of 32,993 units.
For the second half of the year, 8990 Holdings will be launching Deca Homes (DH) Mactan Prime, Urban DH Mactan, Urban DH Tisa 2, all of which are in Cebu, DH Talomo in Davao, DH Leganes in Iloilo, and DH Tigatto in Davao.
Sales reservations, meanwhile, grew by 3% year on year to P4.5 billion, on the back of more project launches in previous years.
In a bid to achieve the company’s target of doubling sales in the second half of the year, 8990 Holdings said it has brought back in-house financing, which allows buyers to purchase property at low downpayment rates, after which they can move in the units while paying monthly amortizations.
In an earlier interview, Mr. Atencio explained they limited sales in the Urban Deca Homes Tondo project to Pag-IBIG fund members, which means buyers can only purchase property by availing of government housing loans through the House Development Mutual Fund (HDMF).
The company however was able to benefit from this strategy as HDMF takeouts accounted for 2,229 units amounting to P2.2 billion, 98% higher than the takeouts in the first half of 2016.
HDMF takeouts further accounted for 73% of 8990 Holdings’ sales for the January to June period, which the company said is in line with its goal to increase internally generated cashflows.
Shares in 8990 Holdings lost 10 centavos or 1.71% to P5.75 each on Tuesday. — Arra B. Francia
