Mass housing developer 8990 Holdings Inc. said first-quarter net income grew by 12 percent to P1.3 billion from a year ago on the back of a double-digit growth in sales.
The company said in a disclosure to the stock exchange first-quarter revenues climbed 15 percent to P3.5 billion. Total housing units delivered also reached 2,291 units in the first quarter of the year, up 4 percent year-on-year.
First-quarter reservation sales increased by 48 percent to to 3,457 units.
“We had an exceptional 2019 and first-quarter growth. However, we do expect a softening in the second quarter given that, as part of the Philippine government’s nationwide effort to contain the virus, non-essential businesses nationwide, including real estate, had to stop operations for most of the second quarter,” 8990 Holdings acting president and chief operating officer Alexander Ace Sotto said.
The company said it would focus on increasing revenues and maintaining liquidity in the second half to survive the pandemic.
“We have already taken steps in the beginning of the pandemic to reinforce our already strong balance sheet. These include suspending our buyback program, realigning our capital expenditure program for the year, maintaining our good standing with our banks, optimizing inventories, and cutting operating expenses without sacrificing our pool of employees,” Sotto said.
“It is difficult to determine when this pandemic will end or how much of it will still unfold in the coming months. But we are confident that we are in a good position, liquidity-wise, and are ready to respond to opportunities when they present themselves, leading to an eventual recover in the industry,” he said.
The company has strengthened its balance sheet by paying off debt and funding operations through internally generated cash. It said the performing accounts ratio for buyers under its in-house financing program, an indicator of collection efficiency, was at 94 percent in the first quarter of 2020.
It said 77 percent of buyers were updated with their payments while only 23 percent were in arrears of 1 month or more.
The company’s gross margin remained stable at 55 percent as it actively monitored and controlled spending, managed labor costs and locked in material costs to preserve margins from potential cost escalation.