LOW-COST housing developer 8990 Holdings Inc. on Thursday said its net income last year surged 52 percent, surpassing the guidance it set earlier as sales rose.
The company said its unaudited net income in 2014 reached P3.33 billion, from 2013’s P2.18 billion, as its gross sales rose by 48 percent to P7.9 billion from the previous P5.35 billion.
Its gross sales for last year meet its expectations, but its net income surpassed its guidance of just P3 billion.
Net margin for the year was slightly higher at 43 percent, from last year’s 41 percent.
For this year, the company is expecting a net income of between P3.8 billion and P4 billion in revenues of between P9.6 billion and P10 billion, still as a result of its continued construction of housing units geared for the working class and families of overseas Filipino workers.
“The growth of the housing sector will continue for as long as there is economic expansion in the country,” Januario Jesus Atencio, the company’s president and CEO, said in a briefing. He attributed the higher net income growth to the increased average prices by 18 percent, negotiated lower price for materials, among others.
Atencio said its capacity to build more units at a faster pace is the main determining factor for its long-term sustainability.
Housing revenues plus contract to sell income reached P8.6 billion last year, as takeouts of housing units remain at 88 percent of the core business.
“We note a higher sales surplus of more than 800 reservations in 2014, with zero ready-for-occupancy units similar to last year,” the company said.
For the year, the company is allocating a capital expenditure of P8 billion, some P3 billion of which will be used to increase its land bank that currently stands at 385 hectares, while the rest will be operational expenditures.
Atencio said that the company will target to have at least 500 hectares in land bank,as it will purchase land in Davao, Zamboanga, Pampanga and Bacolod.
The company said that it will construct some 11,000 units for the year, with Luzon growing 44 percent, the Visayas at 31 percent and Mindanao at 25 percent.
8990 will launch nine new projects this year that will provide 4,486 additional units to its inventory, with a total value of P4 billion.
As of end-December, the company has a total of P13.68 billion in collectibles under its in-house financing that carries interest rates of 9.5 percent, with a collection efficiency of 96 percent.