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Property firms post weaker Q3 results

Posted on November 16, 2011 10:26:01 PM [ BusinessWorld Online ]

THREE DEVELOPERS -- Megaworld Corp., Empire East Land Holdings, Inc. and Araneta Properties, Inc. -- posted weaker performances in the third quarter versus year-ago levels amid lackluster real estate sales.

Megaworld net income for July to September fell by roughly a fifth to P1.539 billion from P1.903 billion a year ago as flat real estate sales were overtaken by a slight rise in costs and expenses.

Revenues from real estate sales stood roughly unchanged at P4.550 billion although collections from rentals grew by 58% to P1.092 billion.

Total revenues thus stood at P7.208 billion, improved by more than a tenth from P6.467 billion a year ago.

But this was whittled down by a 24% rise in costs and expenses to P5.668 billion, traced particularly to deferred gross profit, hotel operations, operating expenses and interest charges.

Megaworld affiliate Empire East Land, meanwhile, swung to a loss worth P229.65 million in the third quarter from a net income of P508.71 million last year also due to poor real estate sales, as well as a decline in collections from interest income and commissions.

The company’s third-quarter real estate sales fell by 30.55% to P225.12 million from P324.36 million last year, while interest income retreated by 23.36% to P82.62 million versus P107.93 million in year-ago levels.

Total expenses declined by a quarter to P435.87 million from P581.98 million year on year.

Araneta Properties for its part recorded a double-digit plunge in the third quarter, saying real estate revenues fell as there were less lots to sell.

Third-quarter net income of the company plunged by 31.53% to P5.71 million from last year’s P8.34 million.

Revenues went down by 35% to P23.05 million versus P35.607 million in the previous year while expense also fell by 36.66% to P16.96 million from last year’s P26.78 million.

“There [was] a decrease in the amount of real estate for sale and development which is P921.2 million as of Sept. 30, 2011 compared to P953.291 million [a year ago]. The decrease is specifically attributable to the cost of lots sold during the period,” Araneta Properties said.

The company went on to announce that it is looking to consolidate the other properties of its stockholders to the listed firm in a bid to expand the company’s portfolio.

“There are some other assets that are owned by the stockholders of the company. We are also determining when to bring these strategic assets in the land bank of the listed company,” Crisanto Roy B. Alcid, the firm’s chief finance officer, said after the company’s stockholders meeting.

Shares of Araneta Properties stood unchanged at 49 centavos apiece yesterday. Megaworld fell by 3.38% to P2.00. Empire East Land dipped by 3.17% to 61 centavos apiece. -- FJGDLF and CHCV

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