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Concrete Aggregates shelves leisure farm development

Posted on July 02, 2012 08:59:43 PM [ BusinessWorld Online ]

CONSTRUCTION SUPPLIER Concrete Aggregates Corp. has shelved a plan to develop a leisure farm project, citing opportunities in other areas.

In its 2011 annual report, the Ortigas-controlled company had said it was branching out from its main business of supplying construction materials by developing lots in Sto. Tomas, Batangas into a leisure farm subdivision.

“We have started to develop that project, but as I mentioned in my report [to stockholders], we are putting that on hold in the light of other developments in the area,” Emmanuel A. Rapadas, Concrete Aggregates president and general manager, told BusinessWorld after the firm’s annual stockholders’ meeting last week.

“While [the project] was initially designed to be a leisure farm project, we somehow saw the promise of low-cost to mid-market housing,” Mr. Rapadas said.

The company will also study the management of its idle properties in Pampanga and Rizal.

“We will look at possibilities on how to best use these properties at this time,” Mr. Rapadas said.

This comes as Concrete Aggregates this year aims to partly recover from its 22.70% profit drop to P22.30 million last year, hinging on a new facility to be built by Batong Angono Aggregates Corp. (BAAC), which operates the company’s Rizal quarry.

“Last year, when the old plant was decommissioned, [our three other facilities] had a production capacity of 350 metric tons per hour. With the new plant, the combined capacity would now be something like 600 metric tons per hour. The new plant, as we understand, will be coming on-stream sometime in July,” Mr. Rapadas said.

The new plant will also be able to deal with the expected rollout of private and public infrastructure projects in the second semester, including possibly the government’s PPP (public-private partnership) program, he added.

“Conservatively, we’re thinking of at least 20% growth in [full-year] net income, to be helped by the new plant,” Mr. Rapadas said.

Concrete Aggregates’ facilities in Angono, Rizal have an operating capacity of 7,700 cubic meters of crushed materials per day, according to the company’s 2011 annual report.

The firm’s first-quarter net income fell by 15.14% to P1.85 million from P2.18 million last year on the back of lower royalty fees earned from BAAC. Revenues declined by 16.44% to P3.66 million from year-ago levels.

Concrete Aggregates’ “A” shares rose by 0.63% to P80 from P79.50 at its previous close, while its “B” shares were traded unchanged at P10 apiece. -- Franz Jonathan G. de la Fuente           
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