Century Properties Group Reports 2.8% Decline in Q2 Net Income Amid Higher Costs and Lower Nonoperating Income
Key Takeaways
- •Century Properties Group's second-quarter net income declined 2.8% year-on-year to P729.32 million due to elevated taxes, interest expenses, and lower nonoperating income.
- •Total second-quarter revenue grew 3.3% to P4.04 billion, driven primarily by a 6.2% increase in real estate sales to P3.62 billion.
- •The company attributed slower sales take-up and collections partly to the Middle East crisis, which affects overseas Filipino buyers who represent a key customer segment.
- •First-half attributable net income fell 4% to P1.17 billion, with total revenue easing 1% to P6.71 billion amid higher finance costs linked to the central bank's tight monetary policy stance.
- •CPG shares closed down 2.6% at P0.75, with the company reporting total assets of P68.41 billion and a net debt-to-equity ratio of 3.8 times as of June 30.
Century Properties Group, Inc. (CPG), a Philippine property developer, reported a 2.8% year-on-year decline in second-quarter net income to P729.32 million, as lower nonoperating income and elevated tax and interest expenses weighed on the bottom line.
According to the company's quarterly report released on Wednesday, total revenue for the second quarter rose 3.3% to P4.04 billion, up from P3.91 billion in the same period a year earlier.
Real estate sales remained the largest contributor, generating P3.62 billion, a 6.2% increase year-on-year. Revenue from property management and other services climbed 9.1% to P146.22 million. Hotel revenue advanced 5.5% to P31.56 million. However, leasing revenue dropped 26.4% to P238.13 million, and interest income from real estate sales plummeted 82.3% to P2.35 million.
Despite the quarterly revenue growth, CPG noted that the Middle East crisis had slowed the overall pace of sales take-up and collections. Philippine property developers, including CPG, count overseas Filipinos — many working in the Gulf region — among their key buyer segments, tying a portion of residential demand to remittance flows and geopolitical conditions in that area.
For the first six months of the year, CPG's attributable net income fell 4% to P1.17 billion, primarily due to higher taxes and finance charges. Total revenue eased 1% to P6.71 billion, reflecting weaker contributions from the real estate business. Interest income from real estate sales declined 19% over the same period. The higher finance costs come amid the Bangko Sentral ng Pilipinas' sustained tight monetary policy stance, which has kept benchmark interest rates elevated and weighed on borrowing costs for both developers and homebuyers.
"Real estate revenues decreased by 1% due to slightly lower sales take-up and collections during the period," CPG said. "Condominium inventory available for sale has stabilized as new project launches offset the impact of completed and nearly fully sold projects."
On a positive note, first-half leasing revenue increased 5%, driven mainly by improved occupancy rates and higher rental rates across the company's leasing properties. Revenue from property management, hotel, and other services rose 14% during the same six-month period.
As of June 30, CPG reported total assets of P68.41 billion and stockholders' equity of P25.23 billion. Its net debt-to-equity ratio stood at 3.8 times.
At the local bourse, CPG shares fell 2.6% to close at P0.75 apiece.
— Sheldeen Joy Talavera
