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Suntrust expects windfall from acquisition of affiliate

    Published : Wednesday, October 26, 2011 00:00 [ ]

SUNTRUST Home Developers Inc. expects the acquisition of a property management arm of the Megaworld Group to boost profitability in the future.

Ferdinand Masi, Suntrust chairman, told reporters the company expects First Oceanic Property Management Inc., which manages residential and office condominium and private estates, to contribute about P10 million to P12 million to earnings this year.

FOPMI registered a net income of approximately P3 million in the January to April period, Masi said.

“With this investment in First Oceanic, your company looks forward to consistent earnings growth in the next few years fueled by higher returns from this new business segment and its existing property development and rental businesses,” he said during the company’s annual stockholders’ meeting.

After acquiring FOPMI in September, Suntrust can consolidate the former’s financials beginning in the third quarter.

The company recorded a profit of P4.75 million in 2010, higher than the previous year’s P3.92 million.

Suntrust’s net income surged to P1.12 million in the first half from P16,600 in the same period last on the back of higher equity share in net earnings of associate Suntrust Properties Inc., rental income and condominium sales.

In a meeting following the shareholders’ meeting, Suntrust approved the change of its corporate name to First Oceanic Property Management Group Inc., a reflection of the company’s future business direction.

“In the meantime, we will focus on property management because of the limited resources of the company to ensure a stream of profit,” said Masi.

The board also authorized the submission of the corresponding amendment to the company’s Articles of Incorporation and By-Laws to shareholders of record as of November 15 for their approval through written assent.

Despite the favorable earnings prospect, the company remains non-committal on when it can give out dividends to shareholders.

“Looking at the financial statement of the company, the available resources do not warrant giving dividends. We are making some investments that will ensure some profits in the coming years,” Masi said.

Suntrust’s shares were last traded at P0.52 each on Monday.

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