Empire East sets P1-B capex for 2005

Empire East Land & Holdings Inc., the low- to medium-cost housing subsidiary of Megaworld Corp., has set aside about P1 billion this year for its capital expenditures which include the continued construction of residential subdivisions and townhouses and acquisition of properties.

Empire East has been continuously acquiring properties either through outright acquisitions or joint venture arrangements with landowners.

For the first quarter this year, Empire East reported a 10.18-percent increase in its net income to P30.3 million from P27.5 million in the same period in 2004. Revenues rose 4.75 percent to P164.92 million from P157.44 million.

Sales revenues were derived from Laguna Bel-Air 3, Laguna Bel-Air 4, Greenhills Garden Square, California Garden Square, Xavier Hills and the Cambridge Village.

Empire East said the major revenue contributor was interest income derived from accounts under in-house financing amounting to P83.2 million and P58.1 million, equivalent to 50 percent and 37 percent of total revenues, respectively. Additional sources of revenue were commissions of a subsidiary, rentals of central business park office-warehouse and commercial spaces of various projects and those obtained from other sources.

Operating expenses went up from P115 million to P118 million, largely due to additional expenses incurred in promoting sales and the general increase in prices of commodities.

The company sourced its major requirements during the period from internally-generated funds and partly from the discounting of its installment contract receivables.

As of March 31 this year, Empire East had total resources of P22 billion, a slight increase from the P21.9 billion reported in end-December 2004.

Empire East expects to sustain its gains for the remainder of the year as demand for housing grows, given the affordable prices of properties, the attractive payment scheme which the company offers under in-house financing, and the competitive interest rates of most banks on housing loans.