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Villar property developer reports lower profits across the board

Vol. XXII, No. 201 [ BusinessWorld Online ]

Friday, May 15, 2009 | MANILA, PHILIPPINES

VILLAR-LED Vista Land & Lifescapes, Inc. yesterday reported lower profits for January to March, citing a decline in sales. The company however said the property market was showing signs of improvement even if revenues fall this year.

In a statement, the property developer said net income went down by almost a fifth to P630 million, while revenues declined by 6% to P2.45 billion.

"[The] results are within expectations. We anticipated that there would be weakness in the market environment this year and we factored this into our internal projections sometime ago," Vista Land Senior Vice- President for Finance Ricardo B. Tan, Jr. said in a briefing.

Mr. Tan said Vista Land’s revenue mix remains unchanged, with its low-end unit still the largest contributor.

Vista Land is a listed holding company selling to all sectors of the property market — Brittany is the company’s high-end unit while Crown Asia is focused on the middle-income market.

Camella Homes and Communities Philippines cater to the lower-end markets.

Mr. Tan said revenues from Brittany declined by 5% to P448 million from January to March, along with Crown Asia which slipped by 19% to P425 million. Sales of Communities Philippines went down by 6% to P740 million while revenues from Camella were flat at P839 million.

"The property sector seems to be showing some signs of improvement. In the last two months, we have seen a rebound in sales in almost all sectors and we may accelerate project launches during the second quarter. [But] we still remain conservative," Mr. Tan said.

Paolo A. Villar, chief finance officer of Vista Land, however said it was unlikely for the company to push through with high-end projects. "We want to be prudent and we would like to see some signs first as it would be premature to say that there is already some kind of rebound," he said.

In 2008, Vista Land was able to hit its core net income target of P3 billion, a 42% increase from P2.12 billion the previous year because of residential sales from its middle- and low-income units. Revenues also went up by more than a quarter to P10.43 billion.

So far, Vista Land has already spent P2 billion of its total P7.7-billion capital expenditure budget for two subdivision projects launched last quarter. The projects are still aimed at the lower-end market, now the focus of most property companies.

Rival Ayala Land, Inc. saw profits down by half to P907 million for the first three months of the year because of the softening real estate market. — Kristine Jane R. Liu


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