Vol. XXII, No. 65-A [ BusinessWorld Online ]
Saturday, October 25, 2008 | MANILA, PHILIPPINES
BY KRISTINE JANE R. LIU
The global financial crisis may have affected many companies’ earnings and projects for next year but the property arm of the country’s richest man, Henry Sy, Sr., remains confident that there is still a market for its residential projects. Henry Sy, Jr., SM Development Corp. chief executive officer, told reporters his firm was still experiencing good sales.
"Sales are still going strong. Although nobody can predict the future, the trend [in the company] is that sales are still going strong," Mr. Sy said. Mr. Sy said consumers have become selective and discriminating and would not go to "lesser known brands" for fear that their projects might not be completed.
But like all other property developers, SM Development is monitoring the market just to see where the trend is.
"We are pacing our program based on the demand. We are now focusing on the middle-income market which continues to remain strong," he said.
The company last Thursday launched phase one of Sea Residences near the SM Mall of Asia Complex in Pasay, which includes the first two of six towers, housing more than a thousand units.
One-bedroom, 24-square-meter units cost P2.4 million, while two-bedroom, 48-square-meter units cost P5 million.
Aside from Sea Residences, other SM Development projects are Grass Residences, Chateau Elysee, Mezza Residences, Berkeley Residences, Field Residences, Wind Residences and a subdivision, the Lindenwood Residences in Muntinlupa.
Mr. Sy said the company has yet to decide on the level of capital expenditures next year, although there was a possibility of lowering the amount in case of an "immense factor."
"When the time comes that all [overseas Filipino workers] are sent home, that’s the time that I’ll surrender and order all company projects to stop. We haven’t decided how much our budget will be next year but it may go lower than what we have for 2008," Mr. Sy said.
The company earlier projected P6-billion increase in sales this year from P3.5 billion last year. For the first half alone, SM Development more than doubled its realized revenues from real estate operations to P1.8 billion, while net income went up by 250% to P400 million on the back of strong pre-selling activities.
Meanwhile, its holding company SM Investments Corp. reported a more than 10% increase in net profits to P2.73 billion from April to June, while first-half results also went up by more than a tenth to P6.5 billion.
