A massive revaluation has dramatically reshaped the financial picture of Villar Land Holdings Corp., bringing the assessed worth of its newly acquired properties down to P52.74 billion. This figure represents a significant correction from an initial, far higher estimate that triggered intense scrutiny from regulatory bodies.
The properties in question – a sprawling 366 hectares within the ambitious Villar City development – were purchased in September of last year for P5.2 billion. Villar City itself is a colossal undertaking, a 3,500-hectare project designed to bridge Metro Manila and Cavite, promising a new urban landscape.
Initially, an income-based appraisal suggested a value exceeding P1.3 trillion. However, following detailed discussions with its external auditors, the company shifted to a market-based approach for its official financial statements. This change in methodology proved pivotal in arriving at the revised valuation.
The company relied on reports from appraisers accredited by the Securities and Exchange Commission to justify the fair value measurement. The market approach, while considered more conservative, inherently involves subjective factors – comparable sales, location advantages, and even the appeal of surrounding amenities – making the process sensitive to even slight adjustments in assumptions.
Auditors identified the valuation as a critical area of focus, acknowledging the “significant judgments and high estimation uncertainty” involved. They undertook extensive verification procedures, scrutinizing appraisal reports, comparing assumptions to real-world market data, and consulting independent valuation experts to ensure accuracy.
This adjustment comes after the SEC issued a show-cause order regarding the original P1.33 trillion valuation, demanding an explanation from the initial appraiser. Penalties were also levied against Villar Land and several of its officials for delays in submitting audited financial statements.
Despite the valuation correction, Villar Land reported a modest increase in net income for 2024, reaching P1.423 billion – a 0.5% rise compared to the previous year. This slight gain was fueled by strong performance in interment and chapel services, which saw revenue increases of 23% and 43% respectively, offsetting a decline in real estate sales.
The company’s total assets experienced a substantial surge, climbing 28% to P35.75 billion. This growth was largely attributable to the Villar City land acquisition and the subsequent reclassification of investment properties. The value of these properties at cost skyrocketed by over 11,000%.
While assets grew, equity saw a slight decrease of 3%, and liabilities increased significantly by 59%, reflecting increased obligations related to the acquisition. This shift in the balance sheet underscores the financial impact of the large-scale investment.
Earlier, an unaudited report had showcased a dramatically inflated net income of P999.72 billion, driven by the initial, higher fair value gains on investment properties. This preliminary figure, however, was quickly overshadowed by the more conservative, audited results.
Revenue experienced a 25% decline, primarily due to a 26% drop in residential unit sales. The company, formerly known as Golden MV Holdings, Inc., recently rebranded itself following amendments to its corporate structure.
Following the release of the audited financial statements, shares of Villar Land experienced a significant downturn, falling nearly 30% in a single trading session. This market reaction reflects investor response to the revised valuation and its implications for the company’s future performance.
