Highlands suffers 87% plunge in net earnings

MANILA, Philippines - Highlands Prime Inc. (HPI), a high-end leisure property development firm of the family of retail tycoon Henry Sy, reported on 87-percent drop in its net earnings this year to P24 million, resulting mainly due to the adjustment to cost of land in its Tagaytay property and one-time expenses related to the purchase of its Canlubang property.

In a financial report filed with securities regulators, HPI said revenues from real estate operations grew 32 percent to P1.1 billion owing to the completion of The Hillside and The Woodridge Place, which were 88 percent and 96 percent sold, respectively as of end-last year. Sales from Pueblo Real also contributed to revenues.

EBITDA, on the other hand, stood at P41.5 million for an EBITDA margin of 3.78 percent.

Gross profit amounted to P251.2 million, down 24 percent from the previous year as cost of sales jumped by 68 percent to P846.7 million as condominium projects posted the biggest share of sales revenues.

Interest Income more than doubled to P10.8 million owing to the P662 million loan from Banco De Oro (BDO) for the acquisition of the Canlubang property.

 Operating expenses rose 46 percent to P125.1 million while commission expense increased by 41 percent to P49.5 million.

For this year, HPI is launching the second phase of the Woodridge Place at Tagaytay Highlands as well as Pueblo Real at Tagaytay Midlands.

The Woodridge Place phase 2 comprises two mid-rise buildings with  44 units each with an average size of 166 square meters per unit.  HPI expects to generate more than P1 billion in revenues from this project.

Pueblo Real phase 2 is currently  undergoing design and  expected to be launched during the early part of the third quarter of the year.

HPI  likewise expects The Woodlands Point to contribute about P200 million in gross revenues for 2010.  As a log cabin project, construction is done as a unit is sold.

Also  to be sold are Midland projects – The Horizon, The Lakeview Heights and The Alta Mira, which are estimated to raise a combined P480 million.