MacroAsia profit dips to million in Q1

MacroAsia Corporation, the airline services unit of the Lucio Tan Group, reported a 22 percent drop in net income to R233 million in the first quarter of the year due to non-recurring expenses and higher costs.

In a disclosure to the Philippine Stock Exchange, the firm noted that, “the non-recurring provisions and the one-off startup costs absorbed in the first quarter are poised to open up a stronger performance ahead, as revenues are surely poised to grow due to the expanded client portfolio that has been prepared for servicing in the first quarter.”

MacroAsia’s first quarter revenues grew 15 percent, from R692 million in 2017 to R794 million in 2018, driven by a 44 percent growth in its ground-handling services and a 4 percent growth in its core inflight catering business.

For the first three months of 2018, ground-handling revenues rose to R289 million, compared to R201 million in 2017.

Inflight meal revenues, arising from mostly foreign airline clients rose to R384 million, compared to R368 million last year.

Its revenues from non-inflight accounts declined by 20 percent though, from R75 million in 2017 to R61 million in 2018 as it is currently constrained by production capacity issues.

The net results were impacted heavily though by a 22 percent rise in direct costs, from R480 million in 2017 to R587 million.

It said this is “largely attributable to the increase in staff numbers to cope with new clients and the temporary spiraling cost of raw materials, utilities and supplies that could be linked to the pervasive effect of the TRAIN that became effective early this year.”

Groundhandling personnel grew 44 percent from 2,051 in 2017 to 2,921 in 2018, as MacroAsia had to expand immediately to be ready to service at least seven new airline clients resulting from the closure of one groundhandling provider.

Only three of these new airline clients were serviced in the latter part of March. The rest of the airlines were serviced only in April and May.

MacroAsia is also getting ready to start its service in the new Terminal 2 in Mactan, Cebu, as it is one of only three ground-handlers that were granted concession licenses to operate in this terminal. MacroAsia’s preparations and investments for this expansion has commenced early this year.

Lufthansa Technik Philippines (LTP), the MRO-JV which is owned 49 percent by MAC, booked its first quarter 2018 core revenues relatively flat at R2.06 billion, compared to R2.07 billion in 2017.