Property developer Century Properties Group Inc. (CPG) on Tuesday said its income in the first half fell 30 percent to P541.21 million, from last year’s P772.27 million as real-estate revenues dropped due to the slump in sales.
Revenues declined 28 percent to P3.88 billion, from last year’s P5.42 billion.
The company, however, said it saw a 40-percent increase in its leasing revenues.
Of the revenues for the first of half, the combined contributions of the horizontal affordable housing and commercial leasing businesses were at P1.27 billion, or 28 percent of total revenues, up from 15 percent last year, the company said.
The combined net income from the two business segments of P225 million, or 42 percent of the total net income, is much higher than the 29-percent contribution level recorded a year ago.
“Despite the dip in the revenues and net income for the first half of 2020 of about 25 percent and 29 percent, respectively, the trajectories are well within the management’s expectations in view of the present market and business conditions amidst the prevailing pandemic and quarantine restrictions,” Ponciano S. Carreon Jr., the company’s CFO, said.
The company said it needed to focus on affordable housing and leasing businesses as it was running out of condominium units to sell. As a result of the increasing contributions of these two high-margin business segments, CPG’s gross profit margin improved to 40 percent, from 38 percent last year.
Operating expenses dropped 21 percent as the company continued to streamline operating and selling expenses while managing the impact of the government lockdowns for most of the first half of the year.
“We are prepared for the unfavorable impact of the current situation on the company’s operating results, including the potential slowdown in sales and construction and development activities, and we have quickly put in place mitigating measures to build robust liquidity levels and a strong balance sheet even as preparations are ongoing to position the group for the new market and business opportunities,” Carreon said.
“We continue to improve our operating efficiencies and implement innovative approaches to mitigate risks, sustain operations, and maintain business resilience while we ensure the safety of our employees and stakeholders and contribute to the nation’s fight against Covid-19.”
He said the company is addressing the needs of customers, such as the safer means of delivering its services through various digitalization programs in its operations.
“We are pleased with how our clients have responded, and how they have prioritized placing their hard-earned cash in real estate assets during this time as opposed to buying non-essentials.”