MANILA, Philippines - Eton Properties Philippines Inc., the real estate arm of the Lucio Tan Group of Companies, reported a 98 percent decline in its nine-month profit to P11.7 million, mainly due to lower sales of residential units as well as increased taxes.
Based on its financial report submitted to the Philippine Stock Exchange, Eton said revenues fell 45 percent to P2.03 billion from P3.69 billion as real estate sales slid by nearly half to P1.74 billion from P3.47 billion.
Income from rental operations, however, grew 33.79 percent to P290.01 million, largely coming from completed BPO offices Eton Cyberpod Centris and Eton Cyberpod Corinthians, as well as commercial projects Centris Station, E-Life and Centris Walk.
From P25.47 million, other income more than doubled to P53.15 million.
“The decrease in net income was partly due to non- recognition of gross profit of projects that have yet to commence construction. While construction of Eton’s ongoing residential and commercial projects continued full-blast during the period, construction activities in Aurora Heights Residences, First Homes Makati and West Wing Villas were moved back to give way to design improvements and enhancements,” Eton said.
Eton also managed to contain its expenses, which decreased 32 percent to P1.98 billion due to organizational strengthening efforts.
The company acquired an enterprise resource planning software that aims to improve and streamline its business processes and hired more office personnel and secured outside services composed of finance and property management staff. Eton has been beefing up its organizational structure since it started managing its turned-over properties.
As of end-September this year, Eton’s consolidated assets stood at P17.4 billion, up 14 percent from P15.3 billion as of Dec. 31, 2011.
Eton is stepping up the construction of buildings catering to the business process outsourcing (BPO) industry as it sees recurring income rising 30 percent over the next five years.
The company said it remains bullish on the residential market given a low interest rate environment and a resurgent local economy.