AGI’s net income up 7% on higher revenues
ALLIANCE GLOBAL Group, Inc. ( AGI) improved its financial performance toward end- September by keeping costs down and growing service revenues to offset a contraction in the sale of goods.
In its quarterly report released on Monday, the investment holding firm of tycoon Andrew L. Tan booked a 7% year-on-year uptick in net profit to P17.34 billion from the P16.25 billion recorded for the comparable nine months of 2015.
Net income attributable to common shareholders climbed 4% to P11.05 billion from P10.61 billion. Accordingly, earnings per share rose to P1.09 from P1.05 at endseptember.
AGI mainly benefited from cost efficiencies achieved across its businesses, as consolidated revenues only increased 2% to P101.56 billion from P99.59 billion.
Service income surged 8% to P45.78 billion from P42.35 billion, as sales from the quick-service restaurants operated by Golden Arches Development Corp. under the McDonald’s brand jumped 10.6% and income from the rental and hotel operations Megaworld Corp. rose 5% and 66% respectively.
The first nine months also witnessed Travellers International Hotel Group, Inc. — owner and operator of the Resorts World Manila — net P3 billion or 5% more from revenues amounting to P20.8 billion.
The casino operator’s gross gaming revenues in the third quarter alone soared 14% to P6.2 billion on overall volume growth and an improvement in hold rate.
Revenues from the hotel, food and beverage, shopping mall and other non-gaming operations of Travellers rose 11% during the nine months. Its Marriott West Wing will become operational within the year, adding another 228 rooms to its current room count of 1,226 at Maxims Hotel, Remington Hotel and Marriott Hotel Manila.
“This should make Resorts World Manila the largest hotel owner amongst the country’s integrated resorts and underscores the Group’s firm commitment to help develop the tourism industry,” AGI President Kingson U. Sian said in a statement.
Higher service revenues offset the 2.2% decline in income generated from the sale of goods to P53.44 billion from P54.63 billion. The contraction arose from Emperador, Inc.’s move to stop distributing one agency brand.
At the same time, AGI managed to limit costs and expenses at P80.0 billion or 1% above the P79.2 billion incurred a year earlier. Finance costs and other charges, in particular, dropped 15.3% due to lower losses from fluctuations in foreign exchange rates.
In the three months to September alone, the holding firm’s net income soared 26% to P5.99 billion from P4.77 billion, the strongest quarterly performance since the second quarter of 2013.
The consolidated revenues of AGI remained steady at P34.49 billion. The company cited sustained growth in rentals, increasing contribution from its overseas liquor business, healthy sales from its quick service restaurants and a recovery in gaming revenues.
“We have been deliberate in the execution of our growth strategies for each of our key businesses, bearing in mind the changing competitive landscape in the various sectors we are in,” Mr. Sian said.
“AGI is operationally leveraged to take advantage of any improvement in market conditions. We look forward to the seasonal uptick in sales on the back of the coming holiday spending which to help boost our profitability,” he added.
Shares in AGI closed four centavos or 0.31% lower at P12.80 apiece on the Philippine Stock Exchange on Monday. —