Wednesday, November 12, 2008 [ philstar.com ]
The middle-income property developer of the SM group announced on Tuesday that its consolidated profits nose-dived on account of huge paper losses it incurred during the third quarter.
In a statement, SM Development Corp. (SMDC) said its consolidated net income for the first nine months dropped from P792 million to P22.8 million year-on-year mainly due to unrealized mark-to-market losses of P908 million from equity investments. These are held in the company’s portfolio from its previous business as an asset management company.
Net income from real estate operations, on the other hand, grew five-fold to P642 million from a year ago as SMDC’s gross profit on real estate sales from January to September surged by 207 percent to P1.2 billion. This brings the gross profit margin to 43 percent while earnings before interest, taxes, depreciation and amortization (Ebitda) reached P1.08 billion for an Ebitda margin of 38 percent.
The company’s realized revenues from real estate operations jumped 122 percent to P2.9 billion on the back of stronger sales and the substantial completion of Mezza Residences and cluster six of Chateau Elysee.
SMDC also started constructing Berkeley Residences and the first phase of Grass Residences. For the first three quarters, SMDC pre-sold 2,037 residential units worth P3.7 billion, 67 percent more than last year.
“We are strongly encouraged by the improved performance of our core business in residential development. At this point, the domestic market remains highly viable given the sustained demand we are experiencing. We are, however, closely monitoring the developments amid the turbulent external environment to enable us to make the necessary adjustments, if and when we are required to do so,” Rogelio Cabunag, SMDC president, said.
Earlier, the company said its capital expenditures for next year may be lower than 2008 since its project launches and subsequent construction will become calibrated depending on demand or economic situation.-- Likha Cuevas-miel
