LISTED STA. LUCIA Land, Inc. expects a better third quarter as it books first-half sales following the transfer of assets from its parent company.
The Villar-led realty firm expects a net profit turnaround of about P100 million after posting a net loss of P176.54 million in the first half, Sta. Lucia Land Executive Vice-President Rolando Castro said in an interview after the company’s annual stockholders meeting yesterday.
He expects the company’s third-quarter gross sales to reach almost P800 million. Mr. Castro said the figures would include first-half sales that the firm had not booked in compliance with international accounting rules on asset transfers, as well as due to the implementation of a new operational system.
But these figures might still slide a bit with the implementation of new accounting regulations that prohibit booking of sales from uncompleted projects.
Sta. Lucia Land, which went public via a backdoor listing last year by acquiring inactive Zipporah Realty Holdings, Inc., recorded a net loss of P176.54 million in the first half due to taxes incurred from Sta. Lucia Realty Development, Inc.’s P10.72 billion worth of property infusion in exchange for 10 billion shares.
Mr. Castro said the effects of rising construction costs on Sta. Lucia Land has been minimal, noting that they had hiked property prices by only 5%.
He said the company’s main focus is horizontal development, where fewer building materials are required. "Our main market are [Filipinos working abroad] and their appetite for housing is still there," Mr. Castro told BusinessWorld.
Prince Christian Cruz, a senior economist at the Global Property Guide, is skeptical about the positive projections made by real estate firms, which he said might be making more money not because of increased demand but more due to higher prices.
Mr. Cruz said a better gauge of the performance of real estate firms is the number of units sold instead of profits and sales, which may have risen due to their price increases.
He also said he does not expect property companies that focus on subdivisions to avoid having to hike prices since these projects heavily use materials such as cement, gravel and sand, which have become more expensive due to higher transportation costs.
Sta. Lucia Land’s Mr. Castro said they have completed 15 projects worth P2.5 billion and has 16 more lined up until early next year. Among the projects being pursued in the first quarter of next year are two towers for business process outsourcing firms and two more for residential use at their 11. 5-hectare property in Cainta, Mr. Castro said.
The company also plans to expand the Sta. Lucia Mall. Mr. Castro said the projects would be partially financed by long-term borrowing and through the sale of more shares to the public in the first quarter of 2009, provided market conditions improve.
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