AGI’s 9-mo profit up 23% to P18.6B

Alliance Global Group, Inc. (AGI), the investment holding company of tycoon Dr. Andrew L. Tan, sustained its robust growth in earnings as consolidated net income soared 23% for the first nine months of 2018 to P18.6-billion from P15.2-billion a year before.

This was achieved on the back of a healthy 12% uptick in consolidated revenues to P112.1-billion compared to P100.3-billion last year.

“We are inspired by the Group’s strong performance and we will continue to work very hard to deliver good results across all our business segments moving forward,” says Kevin L. Tan, chief executive officer, AGI.

The AGI Group is composed of its real estate arm Megaworld Corporation; liquor subsidiary Emperador Inc.; gaming and leisure operations under Travellers International Hotel Group Inc.; quick service restaurants business through McDonald’s Philippines under Golden Arches Development Corporation (GADC); and infrastructure arm Infracorp Development Inc. Net income attributable to owners also posted a sharp growth of 18% to P12.1-billion from P10.2billion a year before.

“We recognize the many exciting opportunities in the market, both domestic and international, as we continue to pursue our aggressive expansion program with an investment commitment of P240-billion up to 2020. At the same time, we intend to manage our costs and keep our gearing levels low as we remain vigilant of the global economic headwinds,” adds Tan. Megaworld recorded attributable net income of P11.3-billion in the first nine months of 2018. This reflected a 13% growth from the P10.0-billion profit posted a year before.

The company got a major boost from the marked growth in rentals and development revenues, which brought its consolidated top line to P41.8-billion, up 13% from its P37.1-billion level a year ago.

Rental income from its office buildings and Megaworld Lifestyle Malls accelerated by 19% to P10.5-billion, benefiting from the expansion in gross leasable area (totaling about 1.3-million square meters to-date), higher occupancy rates and increased rent. Rental EBITDA margins have been on an uptrend, improving further to 88.0% from last year’s same-period level of 86.7%, allowing the rental segment to contribute over 50% of total EBITDA.

Development revenues rose 11% year-on-year to P28.4billion, traced largely to higher real estate sales particularly from its projects in McKinley Hill, McKinley West, Uptown Bonifacio and Twin Lakes. Realized gross profit went up 20% during the same period to P12.0-billion, reflecting faster project completion. Meanwhile, development gross profit margin continued to improve, hitting 47.5% from the level of 45.4% a year before.

Emperador has maintained its stellar earnings growth, driven by the exuberant performance of its international operations. Attributable net income soared 16% to P5.1billion in the first nine months of 2018, from P4.4-billion a year before. Total revenues rose by 11% to P30.5-billion from last year’s P27.6-billion, with the third quarter delivering the fastest quarter growth of 17% year-on-year since Emperador ventured in the international market about four years ago. Overall gross profit margin also rose to 35.6% from 32.5% a year ago.

Travellers International, owner and operator of Resorts World Manila (RWM), registered attributable net income of P1.8-billion during the nine-month period compared to a loss of P34-million a year before. Gross revenues stood at P17.0billion, up 8% from the prior year’s level of P15.7-billion.

Gross gaming revenues (GGR) rose by 7% to P13.8billion during the period as volume growth of 24% was capped by lower blended hold rate of 4.8% from 5.5% a year before. The VIP segment has sustained its recovery with quarterly improvements in rolling volume and GGR, helped in part by the launch in May of a portion of the Grand Wing.

Non-gaming revenues expanded by 11% year-on-year to P3.2-billion, with average hotel occupancy rates hovering at 80%, higher than the 78% level posted a year ago. GADC, which holds the exclusive franchise of McDonald’s in the Philippines, reported attributable net income of P991-million in the first nine months of 2018, up 3% from P966-million a year before. Sales revenues grew by 8% year-on-year to P20.3-billion as same-store sales growth reached 3.8%.

GADC continued to expand its number of stores which totalled 603 by end-September, compared to 566 stores in 2017. The company has maintained its aggressive store expansion program by using its internally-generated funds. Almost 60% of the McDonald’s stores are now located outside of Metro Manila, allowing GADC to broaden its geographic reach throughout the country.