Duterte administration

Vista Land Q1 profit up 22% on strong sales

Katherine Visconti

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Sustained strong demand for affordable homes drives the company's growth

MANILA, Philippines [UPDATE] – Vista Land and Landscapes Inc., the property firm of the family of Senator Manuel Villar, said Tuesday, May 15, its net income grew 22% in the first quarter of 2012 from a year ago to P1.06 billion, thanks to robust sales.

“The company’s performance for the first quarter was slightly better than expected. We are off to a good start and are in track to achieve our full-year targets,” said company CFO Ricardo Tan Jr.

He noted that despite the first quarter being “generally weaker than the other quarters,” it exceeded their profit projection of a little below P1.05 billion.

Tan said Vista Land’s real estate revenues rose 23% to P4.02 billion from P3.28 billion last year, indicating that demand for homes remained strong.

Reservation sales, meanwhile, grew 52% to P10.14 billion from P6.7 billion in the first quarter of 2011.

Vista Land launched 9 major subdivision projects as of the end-March quarter, 8 of which were in the affordable housing segment.

This year, Tan said the company’s net profit outlook is P4.2 billion.

Sticking to the same strategy

Tan explained that while “competition is intensifying not just from Ayala Land but from other players” in the mass market, Vista Land will continue with its strategy of focusing on affordable housing, expanding its geographic presence and targeting the overseas Filipino workers (OFWs).

“The other developers if they go to the provinces they will go to the well known areas, Cebu or Cagayan de Oro, we’re not afraid to go to all those other areas. I mean who is in Candon?” asked Tan. 

He said their geographic diversity was what led to Vista Land’s strength with OFWs. 

“OFWs will buy from their home towns, that’s why we have 55-65% of sales to OFWs. You have 10 million filipinos abroad and they’re not all from Manila or Cebu. The local economy in a province may not be very strong but if you have a lot of people who have gone abroad as seamen they… have every intention of coming back and they want to buy houses,” said Tan.

 

EVERYWHERE OFWS WANT TO BE. Vista Land's CFO expects at least 50% of sales revenue to come from OFWs in the coming years, since the population currently makes up 55-65% of the sales. Photo courtesy of Vista Land.

Vista Land focused on building its land bank in Mega Manila in the first quarter. The land bank grew 100%, reaching 1,830 hectares.

Meanwhile, the CFO noted that about two-thirds of revenue came from the mid- to low-end market, with strong takeup in Camella and Communities Philippines. The affordable market will remain their focus but the condominium market in Vista Residences, their smallest sector at only 5% of sales, may reach 7-8% in 2012, said Tan.

AFFORDABILITY IS KEY. The affordable market will continue to make up the lions share of revenue in coming years according to the CFO. Photo courtesy of Vista Land.

Prospects for 2012

Construction of residences will account for the majority of capital expenditures for the year. But Vista Land will expand aggressively in the commercial market and hopes to construct 5 small malls near residential developments, according to Tan.

“We’re looking at about P4.2 billion in net income for this year. I think that we can sustain better than 15% growth in the next years,” said Tan. 

Tan noted that Vista Land has an additional P14.6 billion in unrealized revenues that will take one to two years to book for residences, and 3 to 4 years for vertical developments. – Rappler.com

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