Posted on November 20, 2012 10:48:16
PM [ BusinessWorld Online ]
ETON PROPERTIES Philippines, Inc., the
real estate arm of tycoon Lucio C. Tan, swung to a net loss in the third
quarter due to nonrecognition of sales of unfinished projects and higher taxes.
Eton incurred a P18.91-million net loss in the third quarter from a net
income of P182.74 million in the same three months last year, the company said
in a disclosure yesterday.
“The decrease in net income was partly
due to nonrecognition of RGP (realized gross profit) of projects that have yet
to commence construction. The lower net income was also due to higher taxes incurred
relative to the income attained during the year,” the company said.
According to its 2011 annual report,
Eton Properties uses the percentage-of-completion method in recognizing
residential project revenues, a method that calls for completion of a substantial
portion of a project before pre-sales are reflected in the company’s books.
“The group starts recognizing income
under percentage-of-completion when the equitable interest has been transferred
to the buyer, construction is beyond preliminary stage (i.e., engineering,
design work, construction contracts execution, site clearance and preparation,
excavation and the building foundation are finished) and costs incurred or to
be incurred can be measured reliably,” Eton said in its end-September financial
report.
In the same comparative three-month
periods, revenues -- composed of real estate sales and rental income -- slid
20.61% to P1.04 billion versus P1.13 billion year on year, while costs and
expenses increased 15.56% to P1.03 billion from P891.31 million last year.
The third-quarter result brought the
company’s net income to just P11.68 million as of end-September, a 98.06%
plunge from P600.63 million in the same nine months last year.
In the same comparative nine-month
periods, revenues fell 44.99% to P2.03 billion from P3.69 billion in 2011,
while costs and expenses dropped by 32.19% to P1.98 billion from P2.92 billion
in the same period last year.
A number of project launches, namely
for Aurora Heights Residences, First Homes Makati, and West Wing Villas, had to
be pushed back to later dates due to changes in designs, the company explained.
“The company moved back construction
timetables of some projects for much-needed design improvements,” Eton said in
a separate statement yesterday.
“The enhancements, ranging from road
widths to building façade improvements, will be implemented to add value to the
projects in terms of quality and functionality.”
Aurora Heights Residences, a high-rise
condominium along Aurora Boulevard in Quezon City, will benefit from an
improved building façade, additional parking facilities, adult and kiddie pool,
as well as an improved residential unit floor plan; while First Homes Makati,
another high-rise condominium in Makati City, will also feature an improved
building façade, a larger swimming pool and amenity area, and more parking
spaces.
Meanwhile West Wing Villas, a
5.2-hectare horizontal development in Eton Properties’ North Belton Communities
in Quezon City, will feature wider inner roads to enhance the residential
community’s overall master plan.
Last month, the company announced that
its board had approved to voluntarily delist by Jan. 2 next year as it will not
meet the local bourse’s 10% minimum public float requirement by the mandated
year-end deadline.
Eton, with a current public float of
5.65%, is one of 27 listed firms as of end-June that were ordered by the
Philippine Stock Exchange to raise their public ownership levels to at least
10% by yearend, or else face penalties leading to eventual delisting. The
company has been buying back until Dec. 5 the 73.79 million shares held by its
public stockholders at a tender offer price of P3 apiece.
Shares of the company gained two
centavos or 0.69% to P2.92 apiece yesterday. -- Franz Jonathan G. de la Fuente
