8990 Holdings profit jumps 74%

MANILA, Philippines -  Mass housing leader 8990 Holdings Inc. booked a 74-percent increase in earnings for the third quarter, equivalent to P1.02 billion in net income compared to P589 million for the same period last year, on the back of a sustained 60-percent gross and a 45-percent net margin for the past three quarters.  8990 is traded in the PSE under the ticker name: House.

In their 3rd quarter briefing, 8890 Holdings president and CEO Januario Jesus Atencio said their 74-percent income growth is a result of both the present bullish economic environment and the preparations they started early this year that enabled them to continuously capture a bigger portion of the affordable housing market.

“Externally, we believe that our consistent GNP growth, OFW remittances and the growth in the BPO/call center/IT sectors have meant bigger disposable incomes for the middle and lower levels of our social pyramid that ultimately provides the basis for increased home sales amidst the 4 million backlog in affordable housing,” he explained.

Atencio added: “Internally, we’ve anticipated this, so we worked hard to open up five new projects this year with two more scheduled to start before the year ends.  At the same time, we increased our annual production capacity by 35 percent to 10,560 units, or an additional 2,500 units from 8,000 units from last year”. 

A significant contributor to increased performance this quarter is the growing acceptance of Deca Home’s innovative in-house financing program called CTS-Gold that continues to provide working class Filipinos easy access to owning their first primary asset.  Customer demographics for 8990 indicate that 66 percent of their buyers are young (23-to 39-year old), college educated, gainfully employed, earning a monthly salary of at least P30,000, generally optimistic about their future and aspiring to move up from being renters into primary home asset owners. 

Atencio reported that, out of the 5,867 housing units that have already been delivered to homeowners this year, their projects in Cebu and Davao accounted for 54 percent or 3,161 units.  Luzon projects in Angeles and Cavite accounted for 35 percent with 2,064 units, while Iloilo contributed 642 units or 11 percent of total delivery. He added that 87 percent of revenue this quarter was derived from their housing subdivision projects, while 13 percent came from their medium-rise building (MRB) project in Mandaue City, Cebu.