10. Operating and Financial Performance
Management Update
1H 2015
10
H o u s i n g t h e F i l i p i n o P e o p l e
11. Unaudited
2Q 2015
Unaudited
2Q 2014
Growth
Rate
Gross Sales P 2,506 P 2,100 19%
Gross Profit 1,489 1,243 20%
Operating Expense 371 385 -4%
Net Income Before Tax 1,309 981 34%
Net Income After Tax 1,190 875 36%
Gross Margin 59% 59%
Net Margin 47% 42%
Gross revenues grow by 19% in
2Q15, compared to 2Q14.
P1.2 billion in net income increases
by 36% from 1Q14 to fuel double-
digit growth in 1H15.
Net margin of 47% in 2Q15 is 5%
better than 2Q14, and 7% more than
the 40% bench mark.
8990 2Q15 INCOME JUMPS 36%
12. Unaudited
1H 2015
Unaudited
1H 2014
Growth
Rate
Gross Sales P 4,509 P 4,044 12%
Gross Profit 2,674 2,442 9%
Operating Expense 738 687 7%
Net Income Before Tax 2,314 1,956 18%
Net Income After Tax 2,127 1,808 18%
Gross Margin 59% 60%
Net Margin 47% 45%
Net earnings grew by 27% in 2Q15
that offset flat earnings in 1Q15.
P2.1 billion in net income increases by
18% from 1H14, and surpasses 2015
mid-year guidance of P2.0 billion by
6%. NET margin of 47% in 1H15 is now
7% better than the 40% bench mark.
We are still on track to meet our
earnings guidance for 2015.
8990 HOLDINGS INCOME GROWS 18% in 1H15
13. Core Business Performance Reaches 5 Billion in 1H15
In units / Million pesos 1H 2015 1H 2014
Growth
Rate
Sales Reservations 4,748 4,059 17%
Housing Production 3,808 3,201 19%
Housing Delivered 4,066 3,821 6%
Housing Revenues P 4,419 P 3,893 14%
CTS Income P 575 P 406 42%
Total Revenues from
Housing Operations
P 4,994 P 4,299 16%
13
Housing revenues plus CTS
income reaches P4.9 Billion in
1H15, up by 16% from last year.
Housing-related income remain to
be 97% of the gross revenues.
Revenues from CTS financing grew
by 42% in 1H15, contributing 12%
to the operating performance of
8990.
14. 8990’s Growth Factors for 2015
External Factors
Last year, we noted that:
- continuous GNP growth,
- increase in OFW remittances,
- the growing BPO/CC/IT sector,
- the 4 million housing backlog
These are still in play, and a new factor
– the new 6.5% housing loan interest
rate of HDMF – has provided even
greater impetus to growth this year.
Internal Developments
- Successful launch of 6 out of 9 projects
- Stabilized purchase prices for materials
- Continuous double casting of panels
- Added more than 240 new sellers
- Increased selling prices by 7%.
As in 2014, the realization that: “More than
sales velocity, our capacity to build more
and more units WHILE MAINTAINING
QUALITY” is still the main determining
factor to our long-term sustainability.
14
15. North Luzon,
17%
South Luzon,
32%
Cebu, 16%
Davao , 22%
Iloilo, 13%
DELIVERED HOUSING UNITS
Mass Housing,
86%
MRB, 11%
Other Income, 3%
TOP LINE REVENUE BREAKDOWN
Out of the 4,066 housing units delivered
to homeowners in 1H15, South Luzon
(Cavite and Muntinglupa) contributed
32% or 1,291 units.
86% of revenue or 3,496 units came from
housing subdivision projects, while 11%
or 447 units came from the medium-rise
building (MRB) project in Mandaue City,
Cebu.
8990 Builds More Houses in South Luzon
15
16. 16
Total Units
Total Value
(in M Php)
Percentage
North Luzon 682 692 19%
South Luzon 1,257 1,398 40%
Cebu 663 713 20%
Iloilo 94 89 2%
Davao 626 699 19%
Total 3,322 3,591 100%
In addition to new projects, 3,322
housing units from 8990’s 14 ongoing
projects nationwide provided top line
revenue with a value of P 3.6 billion.
In sum, a total of 4,066 housing units
were sold in 1H15 from both new and
ongoing projects with a gross value of
P4.4 billion.
On-Going Projects Contribute 82% to Revenue in 1H15
17. 8990 Launches 6 Projects in 1H15
Project Type
Total
Units
Location
Units to be
Delivered in
2015
Value
(in M Php)
Urban DH Campville MRB 1,068 Muntinlupa 488 414
DH Tanza Horizontal 632 Cavite 594 267
DH Pavia 3 Horizontal 2,125 Iloilo 1,680 1,512
DHRR Prime Horizontal 217 Davao 217 217
DHRR Com. Phase 11 Horizontal 109 Davao 109 158
DH Guadalupe Horizontal 408 Cebu 408 404
DH indangan Ph 3 & 4 Horizontal 1,905 Davao 750 727
DH Talisay 3 Horizontal 643 Cebu 410 390
DH Catalunan Grande Horizontal 720 Davao 580 580
Total 7,827 5,236 4,689
This year, 8990 launched 6
out of its 9 new projects due
for launching in 2015. The
remaining three projects will
be launched in the third
quarter.
744 housing units from the 4
out of the 6 projects
launched were already sold
and delivered, contributing P
803M revenue in 1H15.
17
18. Huge Growing Demand for 8990’s Market
4.2 million in unserved mass housing demand
growing at 5% per year.
Demographic Subdivision Condominium
Young:
23 to to 45 year old.
74% 82%
College Educated and
Licensed Professionals
84% 83%
100% Gainfully Employed:
Office Workers, BPO, OFW
73% 86%
Minimum P35,000
Gross Family Income
83% 81%
Renters
Not Asset Owners
91% 70%
19. 19
Unrealized Sales Reaches 682 Units in 1H15
Our unrealized sales for 1H15 grew
by 17% or by 682 units, evidence
of strong market demand in the
mass housing sector nationwide.
682 units have a take-out value of
P741 million, providing a good
start for Third Quarter’s
performance.
Branch Total
Davao 106
Cebu 36
Iloilo 262
North Luzon 5
South Luzon 273
Total 682
20. Balance Sheet Highlights
(in PhP M)
Unaudited
1H2015
Unaudited
1H2014
Growth
Rate
Current Assets P 7,442 P 4,946 50%
Noncurrent Assets 25,047 17,995 39%
Total Assets 32,489 22,942 42%
Current Liabilities 6,997 3,465 102%
Noncurrent Liabilities 9,469 5,796 63%
Total Liabilities 16,466 9,261 78%
Equity 16,023 13,680 17%
42% Increase in Assets Strengthens 8990 Balance Sheet
8990’s assets have grown by 42%,
mainly with new land purchases and
installment contract receivables.
The increase in total liabilities were
borrowings for construction
activities, operating expenses and
the increase in landbank by more
than 110 hectares. The Balance
Sheet improves as our deliveries to
Pag-IBIG Fund are taken-out.
20
21. Key Performance Indicators 1H15 1H14
Current Ratio 1.06 1.43
Book Value per Share 2.90 2.48
Debt to Equity Ratio 0.78 0.50
Asset to Equity Ratio 2.03 1.68
Asset to Debt Ratio 1.97 2.48
Interest Coverage Ratio 12.40 10.48
EPS 0.39 0.33
8990 EPS Posts 18% Gain in 1H15
8990’s Financial Ratios are within
acceptable industry standards, indicating
a stable Balance Sheet with stronger
book value per share, asset-to-equity
ratio, interest coverage ratio, and
earnings per share that grew by 18% in
1H15.
The successful listing of 8990’s Deca
HOUSE Bond brings the current ratio to
the level of about 1.6x.
21
22. 8990 Delivers P1.9B Take-outs to HDMF in 1H15
8990 delivered 2,044
accounts to HDMF for
take-out, equivalent to
P1.9 billion in 1H15,
providing greater cash
flows in the 2nd half of
the year.
We note that our performance, in just two quarters, has already
surpassed 2014’s full year take-out value of P1.8 Billion.
22
Status Unit Value
1H Takeout 935 P 840
Delivered 1,109 1,059
TOTAL 2,044 P1,899
23. 23
In Million pesos
1H
2015
1H
2014
Growth
Rate
Net cash used in operating
activities
745 2,353 (70%)
Net cash used in investing
activities
1,654 2,353 (-30%)
Net cash provided by financing
activities
2,296 5,077 (-55%)
Cash balance at the end of the
year
503 482 4%
8990 Improves Cash Flow in 1H15
8990 1H15 cash flow indicates a
70% decline in net cash used
indicating a greater usage of
internally generated funds versus
bank borrowings due to the
increased volume of take-outs
from Pag-IBIG Fund.
Should this trend continue, we
expect to be cash flow positive at
the end of 2015.
24. 8990 CTS Income Jumps 42%
Value of 8990’s CTS Portfolio
now stands at P17Billion, up
43% from 1H14.
Portfolio size grew by 37% to
just under 20,000 units.
Collection efficiency remains
stable at 96%.
1H15 1H14
Growth
Rate
Units 19,229 14,015 37%
Value P 16,982 P 11, 9075 43%
Interest Income
from CTS
P 575 P 406 42%
Collection Efficiency 96% 97% (1%)
24
25. 25
8990 Landbank Expands to 446 Hectares
Location Hectares No. of Units
North Luzon 44 3,483
NCR 40 48,380
South Luzon 5 2,618
Visayas 153 18,318
Mindanao 204 17,135
Total 446 89,134
Last year, 8990’s landbank stood
at 335 hectares. Today, we have
expanded this by 33% to 446
hectares with an expected yield
of just over 89,000 units,
equivalent to an estimated P108
Billion.
This translates a business activity
equivalent to five years, growing
at 20% per annum.
26. Beyond building houses, 8990 strives to build
long-term relationships with strong partners to
help us grow our business.
Megawide - Our construction partner for High
Rise Condominium projects.
Waltermart - Our partner for mall operations.
Organization of Socialized and Economic
Housing Developers of the Philippines
(OSHDP) – Our industry advocacy partner.
MERALCO – our Pre-Paid electricity partner.
I-Tech RAR Solutions – Our Cebu connectivity
and cable provider.
8990 Builds Partnerships
27. Guidance for 2015:
Gross Income - P10 Billion or USD 233m (60% gross margin)
Net Earnings - P 4 Billion or USD 93m (40% net margin)
GROWTH RATE - 20%
BETTING ON HOUSE
What’s in store for 2015?
- 11,083 units nationwide
- 9 new projects, 19 projects ongoing
- Open three new branches
- 50% income from HDMF take-outs
- 3rd DECA wakeboard park in Visayas
- P9B Corporate Bond offering
- 8990 cable and internet company
- Mall Joint Venture Partnership
28. BETTING ON HOUSE
“I will build a car … large enough for
the family, small enough to care for…
the best materials, the best men, the
simplest designs modern engineering
can devise.
But so low in price that no man making
a good salary will be not able to own
one.”
And that is precisely what HOUSE is
all about.
Henry Ford
TIMES’ Businessman of the 20th Century
