Highlands Prime first half income up 22% on robust sales

MANILA, Philippines - Highlands Prime Inc. (HPI), the high-end leisure property development firm of the family of retail tycoon Henry Sy, reported a net income of P56.03 million in the first half of the year, up 21.6 percent from P46.09 million a year ago on the back of robust sales.

Based on financial statements filed with securities regulators, HPI said it registered revenues of P501.39 million or 49.3 percent higher than the previous year’s P335.88 million. This was attributed to the recognition of higher completion rates for all of the company’s projects and an increase in sales from The Hillside and The Horizon.

In the second quarter, however, HPI’s net earnings fell 14.85 percent to P29.18 million, largely due to higher expenses.

Gross profit grew 35 percent to P171 million. Interest income however, slid 41 percent to P1.8 million as more funds were used for ongoing construction activities.

Operating expenses nearly doubled to P73.6 million while interest expenses rose 32 percent to P23 million from P17.52 million.

For 2009 and 2010, the company has allotted a combined P5 billion or P2.5 billion each year for ongoing developments inside the exclusive Tagaytay Highlands and new projects which include the recently-acquired 342-hectare property in Canlubang, Laguna.

Out of the total P2.5 billion, only P900 million will be spent this year while the balance will be utilized next year using internally-generated cash and bank borrowings. Around 40 percent of the total capex has been set aside for the Canlubang project.

The Canlubang property, which will be developed into an eco-tourism community offering high-end primary homes and world-class commercial centers, is expected to boost HPI’s real estate sales for 2009 and 2010. The first project within the Canlubang property is expected to be launched within the year.

HPI is eyeing sales of a little over P1 billion this year, up 25 percent from the P800 million registered in 2008 on sustained strong sales. Net earnings are likewise forecast to grow nearly 50 percent to around P253 million.   – Zinnia dela Peña