8990 eyeing Sri Lanka, Tanzania as possible expansion markets

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By VG Cabuag

MASS housing developer 8990 Holdings Inc. is setting its sights at Sri Lanka to possibly expand its expertise to boost its growth.

8990 President and CEO Januario Jesus Gregorio III Atencio said Sri Lanka’s secretary of finance unofficially invited him to look at the South Asian nation as a possible expansion area. “They don’t have big developers. That’s what I am looking at. There are many countries that have no big developers, but they want big housing projects,” Atencio said.

“So that’s why we need to go to [Sri Lanka]. Maybe, we can bring in our capital. Housing is one of the most labor-intensive industries. So maybe we can provide employment,” he added.

Atencio said he met the Sri Lankan official while he was visiting last week in Tanzania, where the company is also studying on expanding.

“Mass housing has to have the requisite. Mass housing in my view is not a catalyst industry. It’s a difficult environment. There are other things that the country needs,” he said on the possible Tanzanian expansion.

The company first looked at Malaysia to export its expertise of a mass housing project using precast material, reducing the construction time of building a house to as fast as seven to eight days.

He said the Malaysian project, which he earlier promised to deliver 1 million low-cost housing units, is already a go and the company will likely have a subdivision-type of project outside of Kuala Lumpur, the country’s capital.

Malaysia’s state-owned Khazanah Nasional Bhd. is one of the institutional investors of 8990 when it went public in 2014. It owned 8 percent of 8990.

8990’s income rose 11 percent during the first three quarters of 2015 to P3.16 billion, from P2.83 billion last year. For the third quarter alone, it had a P1.04-billion income or flat from last year’s profit.

Gross sales rose 13 percent to P7.05 billion, from last year’s P6.24 billion, while net margin remains steady at 45 percent, but still higher than the 40-percent benchmark.

“The increase was mainly attributable to increased sales in the company’s low-cost mass housing. Gross sales grew by 16 percent, while net income before tax grew by 2 percent during the third quarter from last year’s, due to the sales-recognition policy for resold canceled units. This segment comprised 17 percent of total sales versus only 10 percent last year,” he said.

There were 6,433 housing deliveries during the nine-month period. Of these deliveries, Luzon projects in Metro Manila, Cavite and Pampanga contributed 48 percent, or 3,103 units. The Visayas, meanwhile, delivered 26 percent, or 1,704 units, while Mindanao contributed 25 percent, or 1,636 units.

Around 85 percent of revenue, or 5,455 units, came from landed subdivision projects, while 15 percent, or 974 units, came from the medium-rise building projects in Tipolo and Tisa, Cebu City, and Muntinlupa.