Mass housing developer 8990 Holdings Inc. expects to sustain its strong growth seen in the first half of 2021 on the back of higher sales as well as wider margins.
“With our first half figures we are actually optimistic and we see double-digit growth by the end of the year. By next year we should see revenue growth normalizing in pre pandemic growth levels,” said 8990 acting President Alexander Ace Sotto.
He reported that the firm actually posted triple-digit growth in revenues and net income during the first half of the year.
“Our numbers rebounded with our first half 2021 revenues ending at P10 billion compared to P4.9 billion in the first half of 2020. This is also higher compared to pre-pandemic figures of the first half 2019 of P7 billion,” he said.
Net income during the first half surged 133 percent to P3.5 billion from P1.5 billion in the previous year.
Gross margins was down to 49 percent from 55 percent due to resale mix but net margin expanded to 35 percent from 30 percent in the same period last year.
“The nationwide lockdowns and movement restrictions brought operations some delays. Yet we were fortunate enough to have ready for occupancy units as well as resale units to sell to offset and buffer the setback,” explained Sotto.
For this year, 8990 has already launched two projects, a housing project Iloilo and a mid-rise development in Cebu.
“We are projecting to launch Urban Deca Homes Cubao, hopefully by this this quarter,” Sotto said adding that 8990 is allotting P8 billion for capital expenditures this year and this includes the cost to build houses that are scheduled for take out within this year.
Part of the capex will also be used by the company to replenish its landbank. “(The) company’s landbank now stands at 670.91 hectares which is poised to provide P201 billion in potential sales in the next 7 to 10 years,” he said.
“Of our total landbank, our Visayas branches holds 59 percent or 397 hectares, followed by Luzon with 25 percent or 170 hectares, and Mindanao with 16 percent or 104 hectares,” Sotto said.
He noted that, “Of the total P201 billion potential sales, Luzon is projected to generate approximately half or P103 billion, 45 percent or P91 billion will be coming from Visayas, while 3 percent or P7 billion will be brought in by Mindanao.”