8990 income slightly up in Q1

LOW-COST housing developer 8990 Holdings Inc. said its income was slightly up in the first quarter of the year, but the company said it is on track to meet its target by the end of the year.

The company said its net income grew to P937 million from last year’s P933 million.

“The company remains bullish about the industry on the back of the country’s expanding economy, higher remittances from Filipinos working and living abroad, the growing business-process outsourcing  and information technology  sectors, amid the 4 million housing backlog in the Philippines,” Januario Jesus Atencio said.

The company booked a 3-percent increase in gross sales, to P2 billion in the first quarter of the year from P1.94 billion in the same period last year.

Total revenues from housing operations went up 7 percent, to P2.26 billion for the period from P2.11 billion in the same period, due to the 18-percent increase in sales reservations, as well as the 4-percent rise in revenues from real-estate operations.

“We did well in the first quarter given our goal to launch nine new projects this year, and we are on track to meet the P10-billion projected revenue by year-end,” he said.  During the first quarter, operating expenses of 8990 jumped 21 percent, to P367 million from P302 million last year, due to the one-time payment of taxes brought about by the sale of hotel buildings in Boracay and Baguio City to affiliate Azalea Leisure and Resorts Corp.

Without the one-time tax payment, the net income of 8990 would have increased by 3 percent to P1 billion.

8990 sees its net income growing between 15 percent and 21 percent to a range of P3.8 billion to P4 billion from P3.3 billion last year, Atencio said.

The first three months of the year also showed 8990 strengthening its key performance indicators with improving current ratio of 1.02, debt-to-equity at 0.75, debt-service ratio of 4.18, and an interest coverage ratio of 12.69, Atencio said.

8990’s recurring income in the form of contract-to-sell receivables grew 35 percent in terms of number of accounts, but its interest income from the said portfolio rose by 41 percent in the first quarter this year. Despite a double-digit increase in receivables portfolio, collection efficiency remains stable at 9 percent, it said.

The company sees revenues growing between 23 percent and 28 percent to a range of P9.6 billion to P10 billion this year from P7.8 billion last year.

The company is set to launch nine housing subdivisions and medium-rise building projects comprising of 4,486 housing units this year with a value of P4 billion.