AGI’s 3Q profit rebounds sharply, brings 9-month earnings to P6.4B

This was achieved as consolidated revenues expanded by 30 percent quarter-on-quarter (QoQ) to P30.4-billion, helped by the gradual easing of community quarantines throughout the country and the further reopening of the economy.

This brings AGI’s net income for the first nine months to P6.4-billion, reflecting a 67 percent decline from P19.3-billion the year before. Consolidated revenues fell 28 percent to P91.8billion from last year’s P127.0-billion. Net income to owners stood at P5.8-billion, down 55 percent from its year ago level of P12.8-billion.

“We are very encouraged by the sharp improvement in earnings across all our business segments during the third quarter as the economy gets a reboot with the further easing of the quarantine restrictions. Our interim performance also validated the soundness of our diversification strategy as evidenced by the strong results delivered by our international liquor operations even amidst the global pandemic,”Kevin Tan, AGI’s Chief Executive Officer, said.

The Andrew Tan-led conglomerate has varied interests in real estate developments through property giant Megaworld Corporation; leisure, entertainment and hospitality through Travellers International Hotel Group, Inc.; spirits manufacturing through Emperador Inc.; quick service restaurants through Golden Arches Development Corporation (GADC), popularly known as McDonald’s Philippines, which is a strategic partnership with the George Yang Group; and infrastructure developments through Infracorp Development Corporation.

“We are optimistic that we can maintain this sequential improvement following the trajectory of the economy which we expect to slowly improve. Meanwhile, we continue to help rebuild consumer confidence by assuring our stakeholders of the safe live, work and play environment in our townships. In support of this objective, we have advanced our implementation of a digitalization strategy – through cashless and contactless transactions, E-concierge for our hotel operations, customer service, account management and efficient delivery applications – in order to hasten the pace of our transition to this new normal,” Tan shared.

“We have maintained our cost discipline and continue to observe financial prudence to support our operations amid this disruption. At the same time, we remain agile to identify and take advantage of opportunities in this rapidlychanging environment,” he added.

Megaworld, the country’s leading township developer, registered a 9 percent QoQ growth in consolidated revenues in the third quarter, bringing its net profit up 6 percent to P2.0-billion for the same period. In the third quarter, rental income grew 13 percent QoQ to P10.6-billion, boosted by the strong showing of Megaworld Premier Offices which managed to sustain its growth in office rentals as it continued to serve the growing demands of the BPO community.

eanwhile, real estate sales remained stable amid challenges in construction capacity. Nonetheless, Megaworld continued to enjoy brisk sales for its horizontal projects in its attractive tourism townships like Bor acay New coast (Aklan), Arden Botanical Estate (Cavite) and Ea st l a n d Heights (Antipolo, Rizal).

For the nine-month period, Megaworld net profit stood at P7.4-billion, about 42 percent lower from P12.8-billion a year before. Consolidated revenues went down 31 percent to P33.3-billion over the same period.

Emperador, the world’s biggest brandy producer and owner of the world’s fifth largest Scotch whisky manufacturer, saw its third quarter profit surge 36 percent QoQ to P2.5-billion.

Consolidated revenues grew 19 percent QoQ to P12.9-billion even despite some challenges that affected liquor sales, e.g., prevailing dry law is some local government units in the Philippines, weak travel retail sales, and limited on-premise sales with most pubs and bars still closed in various jurisdictions where the group is present.

The group’s international brands – led by The Dalmore, Jura and Tamnavulin under Whyte and Mackay, as well as Fundador Brandy de Jerez, Fundador Light and Tres Cepas under Bodegas Fundador – plus its very own Emperador Brandy, continued to make headways in the international market during the period. The domestic market has also experienced robust liquor sales, amid pent up demand following the community quarantines.

For the nine-month period, Emperador’s net profit jumped 11 percent year-on-year to P5.9-billion as consolidated revenues improved by 2 percent to P34.5-billion.

Travellers International, the owner and operator of Resorts World Manila (RWM), registered a four-fold QoQ increase in total gross revenues to P3.7billion in the third quarter. This was driven by the six-fold Q0Q expansion in GGR to P3.2-billion during the same period as the regulator implemented a limited dry run of casino gaming operations with the easing of the quarantine levels. Non-gaming revenues managed to grow by 15 percent QoQ to P447m as international travel remains restricted. This allowed the company to narrow down its loss before interest and depreciation to P189m from negative P1.3-billion in the second quarter.

Attributable net loss during the quarter stood at P1.7-billion from a loss of P59-million the year before.

For the first nine months of the year, Travellers reported a net loss of P5.4-billion, reversing last year’s net income of P786-million. Total gross revenues reached P11.5-billion, down 55 percent year-on-year, as gross gaming revenues fell by the same token to P9.3-billion, while non-gaming revenues plunged by 53 percent to P2.2-billion, weighed down by limited hotel and MICE activities.

GADC’s operations in the third quarter also got a boost from the reopening of the economy, bringing its sales revenues higher by 52 percent QoQ to P4.5billion. As more McDonald’s stores resumed operations during the period, systemwide sales in the third quarter grew 47 percent QoQ to P7.4-billion. EBITDA recovered to P646-million, reflecting a 17-fold QoQ improvement. The company also managed to pare down its net loss during the quarter to P257-million, a reversal from its net income of P418-million the year bef o r e.

For the first three quarters of the year, GADC registered a net loss of P967-million, from a net profit of P1.2billion the year before. Sales revenues fell 39 percent year-on-year to P14.2-billion as systemwide sales hit P24.2-billion due to the heavy impact of the lockdown in the second quar t er.

GADC ended the period with 658 stores as compared to 669 stores at the start of the year.