HOUSE: First quarter results

8/16/2019 HOUSE: First quarter results

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H o u s i n g t h e F i l i p i n o P e o p l e

FIRST QUARTER 2016THE PRESIDENT’S REPORT


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In million pesosQ1

2016

Gross Sales 2,176

Direct Costs 946

Gross Profit 1,230

Operating Expense 375

Finance Costs 193

Other Income 432

Income Before Tax 1,096

Income After Tax 1,032

Gross Margin 56%

Net Margin 47%

1st Quarter 2016 net income earnings reached a

little over P1 Billion, presenting an 10% increase

quarter-on-quarter, and with only a 2% increasein operating expenses. Net margins are 7%

higher compared to the guidance of 40%.

The jump of 34% in “Other Income” was the

reclassification of non-core revenue from the top

line, such as Azalea Hotel and timeshares.

The 14% increase in direct costs because of the

booking of re-sale accounts based on outstanding

principal balance, and we absorbed a 104%

growth in finance costs due higher interest

payment of the corporate bonds.

8990 EARNINGS GROW BY 10% IN 1Q16


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Branches 1Q16 2Q16 3Q16 4Q16 Total

Unit Value Unit Value Unit Value Unit Value Unit Value

N.Luzon 470 433.1 425 382.5 455 409.5 542 487.8 1,892 1,712.9

S.Luzon 120 57.0 120 57.0 424 466.4 504 554.4 1,168 1,134.8

NCR 104 135.2 104 135.2 104 153.2 2,336 2,804.5 2,648 3,210.1

Iloilo 280 274.4 300 294.0 430 389.6 620 491.0 1,630 1,449.0

Bacolod 0 0.0 0 0.0 40 34.0 120 102.0 160 136.0

Cebu 201 201.3 388393.8

656 710 714 787.7 1,959 2,093.3

Davao 520 572.0 387425.7

300 252.4 580 462.0 1,787 1,712.1

Gensan 240 110.4 240110.4

240 110.4 489 322.1 1,209 653.3

Total 1,935 1,783.4 1,964 1,798.6 2,649 2,508.0 5,905 6,011.4 12,453 12,101.4

8990 TARGETS P1.8 BILLION FOR 1Q16

1Q16 performan

at:

- 1,935 housin

- P1.8 Billion in

The target repre

committed per

Billion in 2016.

We note that 5

performance is

quarter because

projects to be la


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8990 OPERATIONS EXCEEDS 1Q16 TARGETS

In 1Q16, housing operations

delivered a total of 2,003 housingunits, exceeding by 4% the 1Q16

target of 1,935 units.

In terms of value, the P2.17 Billion

performance in 1Q16 exceeds the

target of P1.78 Billion by 22%.

Notably, our selling prices in 1Q16

increased by an average of 11% at

P1.084 million compared to 2015’s

average selling price of P980,000.

AreaHousing Delivered in 1Q16

Units Value

Target Actual Target

NCR 104 122 P 0.14B

Luzon 590 540 0.49

Visayas 481 519 0.47

Mindanao 760 822 0.68

Total Housing

Delivered1,935 2,003 P 1.78B


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CORE BUSINESS PERFORMANCE GROWS BY 14% IN

In units / Million pesos 1Q16 1Q15Growth

Rate

Sales Reservations 1,870 1,543 21%

Housing Production 1,988 1,691 18%

Housing Delivered 2,003 1,582 27%

Housing Revenues P2.17B P1.93B 12%

CTS Income P0.34B P0.28B 21%

Total Revenues from

Housing Operations P2.51B P2.21B 14%

PAR 96% 95% 1%

Housing Revenues p

reached P2.5 Billion in 1Q

growth of 14%.

Sales Reservations co

bullish market for afford

the growth in the produc

of housing units ind

improvement in the e

operations.

Housing Deliveries grew(27%) compared to H

(12%) because of two

projects: DH Tanza and

selling price of P450,000

Our Performing Accou

indicating collection e

steady at 96%.


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New sales accounted for nearly 90% of Gross

Income in 1Q16. Gross Margin from sales of

fresh units remain above 60%, and 1Q16 net

margin is 51%, well ahead of 2016 guidance of 40%.

10% of Gross Sales come from cancelled

accounts, which under the present Audit

standards, require the booking of direct costs

based on net realizeable value*, and not on its

original construction costs. Thus, the marginswould be lower because of this, as shown by

the 18% and 7% gross and net margin,

respectively. Net Realizeable Value is computed

as: Original Contract Price minus cost to sell

(8%) less cost to restore (P 25,000). Note: Expenses and other income are allocated based on p

NEW HOUSING SALES ACCOUNT FOR 90% OF GROSS INCOM

In million pesos Fresh Re

Gross Sales 1,946

Direct Costs 738

Gross Profit 1,208

Operating Expense 302

Finance Costs 173

Other Income 319

Income Before Tax 1,052

Income After Tax 996

Gross Margin 62%

Net Margin 51%


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Balance Sheet Highlights

(in PhP M)

As of

March 31

2016

M

Current Assets P 9,930

Noncurrent Assets 27,771

Total Assets 37,702

Current Liabilities 5,947

Noncurrent Liabilities 14,760

Total Liabilities 20,707

Equity 16,995

26% INCREASE IN ASSETS STRENGTHENS 8990 BALAN

8990’s current assets grew by 77% mainly due to

the increased work in progress inventories

brought about by the on-going construction of EDSA Tower and UDH Manila.

The growth in non current assets is due to the

increase in trade receivables (CTS Portfolio).

HDMF migration, securitization deal with CBC and

purchase of receivables by BDO, which are all

targeted to happen within the year, are expected

to bring down trade receivables by end 2016.

Corporate bonds issued mid 2015 increased

noncurrent liabilities.


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Key Performance Indicators

As

Mar20

Current Ratio 1

Book Value per Share 3

Net Debt to Equity Ratio 0

Asset to Equity Ratio 2

Asset to Debt Ratio 1

Interest Coverage Ratio 6

EPS 0

8990 BOOK VALUE PER SHARE POSTS 14% GAIN IN

8990’s Current Ratio significantly increased in 1Q16

mainly due to increased work in progress inventory

from UDT EDSA and UDH Manila. This is more than

1.5 times the acceptable current ratio of 1.0.

Although, net debt to equity ratio increased, it is still

well within acceptable limit of 1.5 times.

Decreased interest coverage ratio is due to higher

interest expense resulting from corporate bond

obligation, but still above-par at 7 times coverage.


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North L

Da

NCR, 7%

Gen San, 7%

Iloilo, 21%

DELIVERED HOUSING

MRB, 14%

TOP LINE REVENUE BRE

Mindanao branches of Davao and Gen. Santos

contributed 45% of 1Q16 deliveries. Iloilo’s

operations have stabilized and is beginning to

contribute significantly to over-all performance, and

together with Visayas, contributed 27%. Luzon,

composed of NCR, North and South Luzon,

contributed 28%.

In terms of Housing Value, Luzon contributed 26%

of the total revenue, Visayas at 32%, while

Mindanao at 42%.

The split between landed housing and Medium-Rise

Building (MRB) condominium projects is 86% to

14%, respectively.

MINDANAO DELIVERS MORE HOMES IN 1Q16


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8990 CUSTOMER DEMOGRAPICS REMAIN STEA

Demographic Subdivision Condominium

Young: 26 to 45 year old. 75% 72%College Educated and

Licensed Professionals 85% 94%

Gainfully Employed: 100% 100%

Office Workers 38% 45%

OFW 26% 15%

BPO 5% 19%

Minimum P26,000

Gross Family Income 74% 81%

Primary Residence Purpose 89% 70%

Majority of 8990’s buyers ar

educated, gainfully employ

office workers, BPO staff, oearn at least P26,000 month

purchase homes for primary

for investment. Roughly 1

OFW land-based, 13% seafa

BPO workers.

8990’s buyers pass through ascoring and evaluation proce

with HDMF housing loan gui

Buyers are also required to

day Financial Literacy Semin

reservation.


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UNREALIZED SALES REACH 1,289 UNITS IN 1Q

Our unrealized sales as

reached 1,289 units w

Billion.

The unrealized sales of 1

include the 465 units

projected to be deliver

4Q16. The remaining sales already represents

2Q16 cumulative target, t

units.

BranchTotal

Units

Value

Millions

North Luzon 37 P 36

NCR 465 575

South Luzon 87 43

Cebu 410 523

Iloilo 182 164

Davao 108 113

Total 1,289 P 1,454


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8990 INCREASES HDMF DELIVERIES AND TAKE-O

Status 1Q 2016 1Q 2015

Unit Value Unit Value

Taken-out 461 448 319 288

With

HDMF 2,046 1,949 169 136

TOTAL 2,507 P 2,397 488 424

8990 continues to work with HDMF to

meet its take-out targets.

In 2016, we implemented a total shift to

HDMF credit evaluation guidelines for

both low-cost and socialized housing

categories, except for our North Luzon

Angeles project where we continue to

accept informal incomes as basis for

affordability. To date, we are 87% HDMFand 13% In-House Finance.

As of 1Q16, our HDMF deliveries now stand at 2,507 accounts, with 862 folders delivered a

in the first quarter. Operations is targeting a delivery of 4,000 units in the second quarter a

projects in Pavia, Iloilo and Gen. Santos, and portions of Bella Vista and DCRR - Angeles.


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8990 CTS INCOME GROWS BY 21% IN 1Q

P 19.5B trade receivables yield

P338M CTS income in 1Q 2016,a growth of 21%.

CTS portfolio grew by 26% in

value and 19% in units.

Performing accounts ratioremains stable at 96%.

1Q 2016 1Q 20

Value (in millions) P 19,500 P 15,

Units 21,672 18,2

Interest Income

from CTSP 338 P

Performing AccountsRatio

96% 95


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8.5% CTS

Gold

Convertible

, 11%

11% CTS 11,

83%

11.5% CTSGold

Straight,

6%

>11.5 or

IHF, 1%

Mix According to Interest Rate

U

21 to 2

73%

Mix Acc

3 yrs andAbove

8%2 to 3 yrs

12%

1 to 2 yrs

21%

less than 1

yr

59%

Mix According to Seasoning

8990 CTS RECEIVABLES REACH P19.5B AS OF MARCH

83% of 8990’s In-House Receivables

are under the CTS 11 Program,

which yields 11% per annum and

enjoys rebate of 1.5% for the first 5

years as long as buyers pay on time.

67% of 8990 buyears payment

them the

amortization po

a lower risk of d

41% of the portfolio are seasoning for

at least one year, and is the subject of

CTS purchase and securitization by

the banks. We target to migrate to

HDMF P4.0 Billion of the remaining

59% below 1-year seasoning,

estimated to be about P11.7 billion.


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8990 LANDBANK EXPANDS TO 553 HECTARES

Location HectaresNo. of

Units

North Luzon 14 6,378

NCR 66 42,141

South Luzon 0 0

Visayas 299 42,652

Mindanao 174 13,635

Total 553 104,806

8990’s landbank in 2015 expanded to

553 hectares with an expected yield of over 104,806 units worth P112 Billion.

Purchases in 1Q16 are:

• Otis, Manila NCR 2.84 has.

• Las Piñas NCR 3.40

• San Miguel Iloilo 70.00

Total 76.24 has.


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STATUS OF 14 NEW

PROJECTS

Project TypeTotal

UnitsLocation

Units

Deliv

for 2

DH Marilao Horizontal 6,378 Bulacan 3

Urban DH Hampton MRB 1,988 Cavite 5

Urban DH Mahogany MRB 546 Cavite 4

DH Sta. Barbara Horizontal 10,189 Iloilo 2

DH Pavia RR 2 Horizontal 2,967 Iloilo 7

DH Baywalk Talisay 3 Horizontal 730 Cebu 5

Urban DH Hernan Cortez MRB 1,596 Cebu 4

DH Mactan 6 Horizontal 8,537 Cebu 2

Urban DH Tisa 2 MRB 2,867 Cebu 4

DH Toril Horizontal 6,800 Davao

DH Mulig 1 Horizontal 7,005 Davao 2

DH San Lorenzo Horizontal 3,749 Davao 5

Urban DH Manila MRB 13,212 Manila 2,1

DH South of Bacolod Horizontal 9,044 Bacolod 1

Total 75,608 7,

As of today, we have launched

three projects: DH Baywalk

Talisay 3 Cebu, UDH HamptonCavite and UDH Manila.

For the Second Quarter, we are

on track to launch 5 more

projects: UDH Hernan CortezCebu, UDH Mahogany Cavite,

DH Pavia RR-2 and DH Sta.

Barbara in Iloilo and DH

Marilao

Projects Launched

2nd Quarter Launch


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Project Status Update


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Total No. of Units: 5,237 UNITS

Percent of Completion: 64%

Date to Finish: December 2016

DECA CLARK RESORT AND RESIDENCES


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URBAN DECA TOWER - EDSA


Percent of Completion: 48.2%

Date to Finish: September 2017

Project Status: 93 days ahead


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URBAN DECA HOMES CAMPVILLE



Date to Finish: DECEMBER 2016


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URBAN DECA HOMES MANILA

Total No. of Units: 13,212 UNITS (Total of 13 Buildings)


Date to Finish: December 2019

Project Status: 47 days ahead


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DECA HOMES BELLAVISTA



Date to Finish: JUNE 2016


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DECA HOMES TANZA

Total No. of Units: 632 UNITS


Date to Finish: JUNE 2016


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DECA HOMES PAVIA RESORT AND RESIDENCES PHASE 1



Date to Finish: AUGUST 2016


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DECA HOMES PAVIA RESORT AND RESIDENCES 2 Land Dev’t



Date to Finish: FEBRUARY 2018


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URBAN DECA HOMES TISA PHASE 1





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DECA HOMES BAYWALK TALISAY 3



Date to Finish: DECEMBER 2016


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DECA HOMES INDANGAN


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Date to Finish: SEPTEMBER 2016

DECA HOMES CATALUNAN GRANDE


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Date to Finish: APRIL 2017

DECA HOMES GENSAN 1


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Corporate Social Responsibility Projects

Php 3.0 M

Donation to 51ST INTERNATIONAL

EUCHARISTIC CONGRESS OF

ARCHDIOCESE OF CEBU

Php 8.0 M

Church in Deca Homes Esperanza

Php 1.2 M

Donation for Kythe Foundation (for children

with cancer)

Php 3.

(50%) Church ofPhp 8.7 M

Church in Deca Homes Resort an

Residences

Php 2.

for 2 Classroom/B

Pandac


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THANK YOU

8990 HOLDINGS,

INC.

2016 INCENTIVE TRIP

HOUSE: First quarter results

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Transcript of HOUSE: First quarter results