Empire East, Cebu Holdings post double-digit profit drop in 2020

MANILA, Philippines — Real estate developers Cebu Holdings Inc. (CHI) and Empire East Land Holdings Inc. reported a double-digit drop in their net income last year due to weak demand for property resources amid the pandemic.

In a disclosure, CHI said its net income fell by more than 76 percent to P400.41 million in 2020 from P1.66 billion in 2019.

Its revenues also slipped by nearly 39 percent to P2.93 billion from P4.79 billion as real estate sales, which account for roughly 80 percent of total sales, were slashed by nearly half.

Real estate sales plunged by 42 percent to P2.32 billion last year from P4.03 billion a year ago. Broken down, sales of commercial lands were halved to P583.1 million from P1.29 billion, while rental income plunged in five of the nine properties that CHI leases to tenants.

CHI, a subsidiary of Ayala Land Inc., owns, develops, markets and manages real estate units. It owns and manages the Cebu Business Park, a 50-hectare business and commercial economic zone in Cebu City, and numerous structures in the Visayan province.

Similarly, Empire East disclosed its net income dropped by 15 percent to P524.94 million last year from P615.56 million in 2019.

Likewise, revenues generated by the firm declined slightly to P5.11 billion from P5.14 billion as gains made in real estate sales were neutralized by declines in commission, rental and other incomes.

Empire East’s real estate sales grew by more than eight percent to P4.26 billion last year from P3.93 billion in 2019, but commission, rental and other revenues declined by 33 percent, 49 percent and 46 percent, respectively.

In its disclosure, Empire East said its performance as a property developer depends on the stability of the economy, as well as the liquidity of consumers. As disposable income increases, spending on housing is expected to go up as well, the firm said.

Empire East, a subsidiary of Megaworld Corp., engages in the construction of mid-cost housing projects in the form of condominium communities, subdivision lots and house and lot packages. It also offers commercial units to a limited extent.

Article and Photo originally posted by Philippine Star last May 1, 2021 12:00am and written by Elijah Felice Rosales.