Monday, November 16, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
SY-LED SM Development Corp. (SMDC) is ramping up its budget next year for the development of its upcoming projects.
The company is setting aside P10.4 billion, up from the P7 billion it spent this year. Of which, SM Development said P5.7 billion will be used for landbanking activities while a portion will be used for land acquisition.
“Majority or 60% shall be internally generated funds which may come from collections, contract to sell financing, stock rights offering and loan take out. The remaining will come from source such as drawdowns from the bank loans and credit lines,” the Sy-led real estate firm said in a statement.
The company said it will expand its business by adding four new buildings on its existing projects and seven new projects which will be done in nine phases. It added that it will be able to sell its condominium units which will give it P14.55 billion in reservation sales.
SM Development said it expects to more than double its reservation sales next year to P15.69 billion from its projected P8.8-billion reservation sales this year. The company said this will boost its net income to P3.06 billion next year from its P1.87-billion target by yearend.
As of September, the company has already posted net income of P1.4 billion from just P23 million in the same period last year, bolstered mainly by the strong market reception of its residential units and higher completion rates of various projects. The marked recovery in the financial markets also benefited the company.
On Friday, the Philippine Stock Exchange has approved SM Development’s plan to raise P4.67 billion to P4.94 billion from the sale of its 1.37 billion common shares to all stockholders as of Dec. 7.
The offer price of P3.40 and P3.60 represent a 10% to 15% discount to the company’s average market price for the past 15 trading days.
Existing shareholders can avail of one share for every three common shares held.
Proceeds raised through the stock rights offering will be used to finance the property firm’s various projects. -- Kristine Jane R. Liu
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