Megaworld earnings rise 14% in 2nd quarter

MEGAWORLD Corp. grew its attributable profit by 14% in the second quarter, driven by its residential, office, and mall properties alongside the acceleration of its hotel business.

In a regulatory filing, the property firm of tycoon Andrew L. Tan reported a net income attributable to equity holders of the parent to P4.1 billion in the April to June period, higher than the P3.6 billion it generated in the same period a year ago.

Revenues went up by 11% to P13.7 billion during the second quarter, against the P12.3 billion recorded in the same period a year ago.

This pushed Megaworld’s attributable profit 13% higher to P7.25 billion in the first semester, after revenues climbed 10% to P26.8 billion.

“Megaworld’s consistent growth across all business segments is a clear indicator of where the company is going, and we are continuously focusing on putting better value to our customers through our programs on innovation and design, digital technology, smart mobility and connectivity as well as environmental sustainability,” Megaworld Senior Vice President and Treasurer Francisco C. Canuto said in a statement.

Real estate sales rose 10% to P7.46 billion during the April to June period, bringing the six-month tally to P14.65 billion.

Megaworld said it booked P73 billion in reservation sales during the January to May period alone. It launched six residential projects for the first half, namely Park McKinley West in Taguig, Chelsea Parkplace in Pampanga, Bayshore Residential Resorts Phase 2 and Gentry Manor in the Bay Area, Tulip Gardens in Laguna, and The Fifth in Ortigas.

Rental income during the second quarter jumped 7.5% to P14.65 billion, pushing the first semester tally 17% higher to P6.79 billion. Megaworld has office, malls, and commercial space leasing businesses.

The property giant also benefited from the expansion of its hotel portfolio, which allowed it to book P347.16 million during the second quarter and P715 million for the first half. It opened the Savoy Hotel Manila in Newport City which houses 684 room, bringing its total inventory to 2,428.

Megaworld plans to open two more hotels, namely Twin Lakes Hotel in Tagaytay and Lucky Chinatown Hotel in Binondo to meet its year-end target of 2,648 rooms.

“We are ready to supply more rooms to support the government’s goal of 10million tourist arrivals by 2020. We are in key tourism areas like Cebu, Boracay and Tagaytay,” Mr. Canuto said.

The company saw particular growth in its condotel properties, where buyers can purchase units while the management acts as operator. The owner then gets a share from the hotel revenues in addition to time-sharing privileges in the use of hotel rooms and facilities.

It further noted that Belmont Hotel Manila’s return on investment percentage stood at 7.4% in 2017, higher than the company’s six percent target.

“There is so much potential in this business, and this has also contributed to our bottom line. As a pioneer of this condotel concept in the Philippine real estate industry, we hope to bring in more innovations to this unique offering,” Mr. Canuto said.

Shares in Megaworld jumped 3.44% or 16 centavos to close at P4.81 each at the stock exchange on Wednesday. —