MANILA, Philippines — Low-cost housing developer 8990 Holdings Inc. earned 10 percent less in 2023 as margins tightened, primarily due to increased finance costs and higher income tax expenses, the company said in a statement.
8990 president and CEO Anthony Vincent Sotto said the company’s net margins decreased from 35 percent in 2022 to 30 percent in 2023, as rising interest rates led to a surge in finance costs.
Gross revenues, however, expanded by five percent to P22.7 billion mainly due to the strong market reception to their affordable housing projects in Metro Manila.
Sotto said the company registered a higher volume of resale units during the year, noting that the “strategic decision to prioritize the sale of resale units was driven by the goal of substantially reducing cash outlays in comparison to fresh units.”
Meanwhile, as 8990’s projects in Manila and Ortigas were not registered with the Board of Investments (BOI), income tax expenses also increased. “Despite these challenges, we are steadfast in our commitment to navigating market dynamics and optimizing our financial performance in the upcoming periods,” Sotto said.
Even as 8990 missed its growth targets for 2023, Sotto reported a significant milestone, as the company’s housing loan takeouts or proceeds from the Home Development Mutual Fund or Pag-IBIG Fund more than doubled. The loan proceeds surged to more than P10 billion from P5.96 billion in 2022.
For 2023, 8990 delivered 12,679 affordable homes to Filipinos – an increase of 13.8 percent from the previous year’s 11,145 units.
The National Capital Region (NCR) contributed a significant 56 percent of the total value. Following NCR, North Luzon accounted for 13 percent, while both Cebu/Ormoc and Iloilo/Bacolod each made up 10 percent. Meanwhile, Davao contributed nine percent while Gensan contributed less than a percent.
As to product type, 8990’s high-rise buildings (HRBs) contributed 61 percent of the total value of units delivered. Mass housing made up 32 percent of the total, while medium-rise buildings (MRBs) stood at seven percent. Lot sales constituted less than a percent.
On a per unit basis, mass housing remains the dominant product type, contributing 55 percent of the total, followed by HRBs at 38 percent, and MRBs at seven percent.
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