8990 targets to reach P20-B revenues by 2020
8990 HOLDINGS, Inc. aims to generate P20 billion in revenues by 2020, driven by the completion of its mid-rise condominium project in Ortigas Extension.
The listed mass housing developer said it should grow revenues by an average of 25-30% in the next two years to reach this target.
“For revenues, we’re aiming for P11.5 billion now, next year we’ll have P13 billion, and then P20 billion after,” 8990 Holdings Investors Relations Officer Tracy G. Ilagan said in a media briefing in Makati City yesterday.
“So really the ramp up would be in 2020 because we don’t do percentage of completion. That’s why you would expect it at the tailend once the buildings are delivered.”
If realized, this would be double the company’s P10.2-billion revenues in 2017.
8990 Holdings Chief Financial Officer Roan Buenaventura-Torregoza said growth will depend on sales of its P30-billion condominium complex in Ortigas Extension, which will be launched early next year.
Urban Deca Homes Ortigas consists of 22 buildings with around 19,000 units on a 13-hectare property. Units will range from 27 square meters (sq.m.) to less than 40 sq.m. each, with prices starting at P1.6 million. This is the company’s largest project to date.
“Ortigas will launch early next year, and from there it will take 18 to 24 months to complete the first buildings which we project to take out in 2020,” Ms. Buenaventura-Torregoza said.
For the first nine months of 2018, 8990 Holdings delivered a 38% increase in net income to P3.41 billion, versus the P2.45 billion it booked in the same period a year ago.
Revenues went up 41% to P8.6 billion, indicating a net profit margin of 40%, higher than the company’s 38% forecast at the start of the year.
Sales reservations meanwhile stood at P7.27 billion, flat from year-ago figures of P7.17 billion.
The company noted it has P588 million in unrealized sales that will be recognized in the fourth quarter, which is expected to boost revenues.
8990 Holdings ended September with around 540 hectares in its land bank, which it noted could generate some P154 billion in sales over the next 10 years. Of this, 246.9 hectares are located in Visayas, 150.9 hectares in Luzon, and 142.1 hectares in Mindanao.
The company said it latest land acquisition is located in Siquijor, where they plans to launch a new brand for its hospitality business.
Majority of the sales to be realized from the projects are located in Luzon at P107 billion, followed by Visayas at P39 billion, and Mindanao at P8 billion.
Shares in 8990 slipped 0.54% or four centavos to close at P7.34 each at the stock exchange on Thursday. — Arra B. Francia