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Villar property developer earns P3B, trims capex

Vol. XXII, No. 181 [ BusinessWorld Online ]

Friday, April 17, 2009 | MANILA, PHILIPPINES


VILLAR-LED Vista Land & Lifescapes, Inc. has trimmed its budget this year, with company executives anticipating a slow-down in property sales.

In a press briefing yesterday, Vista Land Senior Vice-President for Finance Ricardo B. Tan, Jr. said the company has set aside P7.74 billion for spending this year, but the amount could still change depending on how the economy performs. Vista Land last year cut its capital expenditure to P8 billion from P10 billion originally.

"We will continue to launch projects this year but we are being quite conservative given the generally guarded market sentiment," Mr. Tan.

Manuel Paolo A. Villar, Vista Land’s chief finance officer, said the company might issue fixed- rate corporate notes worth over P1 billion to partially fund its budget for the year.

Mr. Tan said the company has 28 projects worth P23 billion in the pipeline, down from 32 projects launched last year. Vista Land failed to hit its original target of launching a total of 36 projects in 2008.

For this year, the company will continue its strategy of focusing in the middle and low-end market segments, which Mr. Tan said would remain resilient, unlike the high-end market which was hit by the economic slowdown as early as last year.

"This year will be another challenging year and we are already seeing that. We will continue to be prudent with our investments ... There is already a marked slowdown in demand in the high-end segment since last year and there is still no change in that," Mr. Tan said.

Mr. Tan noted that competition is already intensifying in the middle and low-end segments, particularly among property developers that have already shied away from the high-end market, including Ayala Land, Inc., which has also slashed its budget to P17.9 billion from last year’s P18.9 billion.

"[The advantage of the company is that] our brand Camella and Communities Philippines are the leading brands in the middle and low-end market," Mr. Tan said.

Despite a tough environment, Vista Land was able to hit its core net income target of P3 billion, a 42% increase from the P2.12 billion the previous year. Its revenue from sales also went up by more than a quarter to P10.43 billion.

Net income attributable to equity holders amounted to P2.81 billion, down from the previous year’s P3.46 billion.

Earnings per share stood at P0.33, down from the previous year’s P0.48.

Mr. Tan said the increase in demand for middle and low-end projects managed to offset the slowing demand in the company’s high-end brand, noting that most of the customers of Vista Land are "end-users" who are relatives of overseas Filipinos in the Middle East, Europe and Asia.

Mr. Tan said sales of the high-end brand Britanny went down last year by a third to P1.61 million along with sister Crown Asia, whose sales went down by 13% to P1.63 million.

However, sales of Camella, which focuses on the middle market, more than doubled to P3.72 million last year while sales of Community Philippines, the property company’s low-end unit, went up more than half to P3.46 million.

"Although we are anticipating some weakness in sales compared to last year ... we are still in a solid position to weather the ongoing crisis. We have a strong balance sheet and we will continue to expand nationwide," Mr. Tan said.

Vista Land has projects in 17 provinces and 41 cities and towns nationwide.


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