Highlands Prime allots P1 B for capex Wednesday, April 27, 2011
MANILA, Philippines – After experiencing a lull in sales last year, the SM group’s luxury developer Highlands Prime Inc. is allotting P1 billion in capital expenditures to boost profits by 200 to 300 percent this year.
In an interview after the firm’s annual stockholders’ meeting on Tuesday, HPI president Henry Sy Jr. said profits will be boosted by the launch of primary home developments in its 172 hectare property in Canlubang, Laguna.
HPI senior vice president Shirley Ong said they will have masterplan for the development of the Canlubang property and this is slated to be launched late this year. Ong said that sales from Canlubang is seen to boost revenues by 20 percent to P1.2 billion.
HPI chief finance officer Roel Parian said P900 million of the P1 billion capex this year will be for the continuing payment for the Canlubang property as well as new land acquisitions.
Sy said this year’s capex, almost the same level as the capex for 2010, will be funded mainly by proceeds from pre-selling of HPI’s projects.
HPI may also get a fresh capital infusion as the firm plans to sell more shares to be able to comply with the minimum 10 percent public float requirement of the Philippine Stock Exchange, said Sy.
He noted that the firm currently has a public float of only 4.6 percent and they have to increase this to at least 10 percent before the November 30, 2011 deadline.
HPI posted a net income of P8.22 million last year, down 65.75 percent from 2009 due to lower real estate sales. Revenues from real estate fell 61.15 percent to P427.37 million, largely due to low reservation sales and low average construction completion rate of sold units.
The firm expects to sell all the remaining lots with the construction of the model unit of Phase 1 of Hillside. Estimated revenues from the sale of the remaining inventory is about P120 million.
HPI is also eyeing over P1 billion in revenues from the Woodrige Place Phase 2, located at the Tagaytay Highlands adjacent to The Woodridge and Woodridge Place Phase 1. Construction has already started for this two-midrise-tower development which will have a total of 88 units. (JAL)