Makati City, Philippines, January 28, 2019 – – The Credit Rating and Investors Services Philippines, Inc. (CRISP) has reviewed the issuer credit rating for Century Properties Group, Inc. (CPG) and retained the property developer company in its ‘AA’ rating category. However, CRISP believes that a rating change is necessary from ‘AA+’ to an ‘AA’ rating due to CPG’s declining revenue performance and increased debt.
CRISP believes, however, that CPG continues to be a major market contender in the competitive property sector as indicated by the recent rebound in its revenues after a 2-year decline in 2015 and 2016.
CRISP deems CPG’s recent strategic decision to include the affordable housing market in its property development portfolio as a necessary move in the right direction as this segment represents a huge potential to scale up the company’s revenue base and market presence.
CRISP favorably notes the continuing ability of CPG to service its debt as it fulfilled its debt obligations under the 2014 Bonds in fiscal year 2017 despite its declining revenues in recent prior years. CRISP also positively notes CPG’s 2018 LTM total revenue performance (Last Twelve Months) which included the last quarter of 2017 (for fair comparison) that reflects a dramatic growth of 84% over the previous year’s LTM total revenues. These figures reflect revenues from completed projects in the pipeline and CPG’s new and emerging source of recurring revenues from leasing which grew 8% over a 9-month period in 2018 compared to the same period the year before.
CRISP is placing CPG on CRISPMonitor as it believes that CPG’s recently positive and strong revenue performance in the last fiscal period requires a closer monitoring for consistency and sustainability to remain in the ‘AA’ rating category, a rating that reflects a very strong capacity to repay debt obligations, low probability of default and a high rate of recovery in case of default. Further, CPG needs to demonstrate its early success in entering the affordable market segment.