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Century Properties Group (CPG) delivered a commendable earnings print through the first nine months of 2025, with revenue and net income both rising at a healthy clip. But for dividend investors, the more interesting—and more consequential—story sits below the income statement: operating cash flow swung negative, cash balances fell, and the company leaned on working capital and financing flexibility to keep the machine moving. That doesn’t mean dividends are in danger today; it does mean dividend sustainability will be judged less by reported earnings and more by how quickly profits convert into cash over the next few quarters.
Earnings: Strong top-line momentum, steady margins, improved net income
CPG’s 9M 2025 revenues rose 15.2% year-on-year to ₱12.312B, driven primarily by higher real estate sales recognized during the period. Net income climbed even faster: ₱2.105B, up about 19% YoY, reflecting both stronger core development activity and a more favorable mix of other income items relative to last year.
Look under the hood, and the business mix explains much of the performance. Real estate sales reached ₱11.130B (up from ₱9.303B), while the leasing business softened to ₱619.7M (down from ₱899.3M) amid higher vacancy and lower rates per management discussion. Meanwhile, services and hotel revenues continued to expand off a smaller base.
Margins tell a “steady” story rather than a dramatic expansion. Gross profit rose to ₱5.975B, and while selling/administrative spending increased to support the growing first-home segment, net margin still edged higher on the back of volume and below-the-line improvements. Financing charges remained significant—just over ₱1.059B for 9M—reminding investors that in property development, leverage and interest costs are part of the terrain.
Balance sheet: Still sturdy, but cash and working capital are moving the wrong way
At first glance, the balance sheet looks resilient. As of Sept 30, 2025, CPG reported total assets of ₱60.853B, equity of ₱23.524B, and maintains liquidity ratios that are comfortably above covenant thresholds (e.g., current ratio disclosed around 2.3x in the KPI section). This is not a company operating on razor-thin liquidity.
However, the composition of that balance sheet deserves attention. Cash and cash equivalents fell to ₱2.882B, down from ₱4.175B at end-2024—a decline of roughly ₱1.29B. The key driver is not an earnings collapse (profits rose), but a working-capital build typical of developers in growth mode: receivables and inventories expanded while contract liabilities fell. In short: CPG invested more cash into the pipeline (inventory and receivables) and carried less “customer advance” float at this point in the cycle.
From a leverage standpoint, CPG still looks “modest” by developer standards. The company disclosed total borrowings of ₱17.677B as of Sept 30, 2025; relative to equity, management’s KPI shows debt-to-equity around 0.8x, while the raw numbers imply the same neighborhood. Net debt rises as cash falls—but still appears manageable, especially with covenant headroom intact.
Cash flow: The dividend conversation starts here
If the income statement is the headline, the cash flow statement is the editorial—and it’s more nuanced. In 9M 2025, CPG posted net cash used in operating activities of (₱1.078B), a sharp reversal from FY2024 operating cash flow of +₱2.808B. This is the single most important fact for common-dividend sustainability in the near term.
The reasons are visible in the operating cash flow bridge: meaningful increases in receivables and inventories absorbed cash, while payables provided some offset. That pattern is not unusual for a developer that is scaling launches and construction; it does, however, push dividends into a different funding bucket—more reliant on cash on hand and financing activity rather than pure operating generation during the period.
Financing cash flows were net positive in the nine months, reflecting continued use of debt facilities (and repayments), while investing outflows were also present (capex, deposits for land, and property/equipment additions). The combined result: cash declined—again, not a crisis, but a signal.
Dividends: Earnings cover is fine; cash cover is the watch item
CPG’s common dividends declared in 2025 (through the 9M period) totaled ₱610.633M, reflecting two tranches (₱0.042114/share and ₱0.010529/share). Preferred dividends add an additional fixed obligation, but the question you’re asking is common-share sustainability—so the critical lens is whether common dividends are funded by a durable stream of free cash.
On earnings coverage, the picture is reasonable: 9M net income of ₱2.105B comfortably exceeds the ₱610.6M common dividend declared in the period. On a simple payout basis, the common dividend is not “over-earning” the business.
On cash coverage, the picture is more mixed. The cash flow statement shows cash dividends paid of ₱601.654M in 9M 2025, while operating cash flow was negative (₱1.078B). That means dividends in the period were effectively supported by a combination of cash balances and financing, not by operating cash generation. Contrast that with FY2024, when ₱576.809M of total cash dividends sat atop ₱2.808B of operating cash flow—an ideal dividend profile.
This isn’t a judgment that the dividend is unsafe; it’s a map of what must happen next. For the common dividend to remain comfortably sustainable—especially if management wants to keep distributions at or above current levels—CPG needs the operating cycle to rotate: receivables collect, inventory turns into cash, and contract liabilities stabilize as launches and collections normalize.
Leverage and covenant headroom: A cushion that supports dividends—up to a point
The good news is that CPG appears to retain meaningful covenant room. The 17‑Q notes indicate bank debt covenants such as debt-to-equity caps (≤2.33x) and bond covenants such as debt-to-equity ≤2.0x, along with current ratio and DSCR requirements; management states the company complied with covenants as of Sept 30, 2025. With reported/derived leverage around ~0.8x D/E and current ratio around ~2.3x, the headroom looks material.
That covenant cushion matters for dividends because it lowers the risk of a “forced” dividend reduction due to technical breaches. But it doesn’t override cash reality: if operating cash flow stays negative for several more quarters, net debt rises, liquidity tightens, and dividend optionality narrows—even if accounting earnings remain healthy.
Bottom line
CPG’s 9M 2025 earnings are solid, and the balance sheet remains supportive with leverage that still reads as modest relative to covenant ceilings. But dividend investors should treat cash conversion as the key swing factor. The company proved in FY2024 that it can generate ample operating cash to cover dividends; 9M 2025 simply shows the opposite phase of the cycle—capital tied up in growth. The sustainability of the common dividend now depends on how quickly that growth turns back into cash.
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