MacroAsia to expand non-airline related businesses

Lucio Tan’s MacroAsia Corp. is looking to return its workforce to its pre-pandemic size in the next two years following a reduction by 42 percent, as the company gears up for growth by expanding its non-airline related businesses.

MacroAsia president and chief operating officer Eduardo Luis Luy said the company is embarking on efforts toward the transformation of the publicly listed firm beyond aviation services to support growth moving forward.

“While waiting for the return of travel volumes to pre-pandemic levels, our operating teams will continue to focus on scaling the edges, growing our non-airline related business through water concessions, non-airline food business, resource development and the like,” he said.

Luy said MacroAsia SATS Food Industries Corp. would commence studies on potential expansion of commissaries outside of Luzon due to the business opportunities presented by its major clients.

He said the company would also continue to increase its client portfolio for its Muntinlupa commissary, which services the food production requirements of institutional clients and support the inflight kitchens inside NAIA.

The commissary has a 25,000 mealsper-day capacity, reaching two thirds utilization rate at times this year.

Luy said while its concession areas for its water business grew in 2021, MacroAsia expects further growth in coverage for potable water supply in other locations this year.

“We will continue to work closely with our current partners to grow what we already have while pursuing new projects that will deliver returns within a short development period,” Luy said.

“Beyond potable water supply, this would include wastewater treatment and septage water management systems,” he said.

Through subsidiary MacroAsia Mining Corp., meanwhile, Luy said the company believes it can achieve a market valuation of its mineral production sharing agreements (MPSAs) in due time.

“MacroAsia also has subsidiaries like the Bulawan Mining Corp. and MMC Management and Development Corp. that also have mining rights that offer development potentials which we will continue to explore together our other partners,” he said.

Aside from its nickel mine in Palawan, MMC likewise has mining interests in several provinces for various minerals, including gold, copper, manganese, and chromite.

“While our aviation services businesses topline progress continue to move in line with the return of airline travel, we foresee that our progress in the aforementioned non-airline segments will strengthen our cash generation capability during critical incidence that impact the aviation industry,” Luy said.

“Our defensive strategy of scaling the edges will make MacroAsia stronger and more resilient, beyond surviving the COVID-19 crisis,” he said.

With flight and passenger movements trending toward recovery this year, Luy said MacroAsia has started increasing again its workforce after trimming it down to 7,851 by end 2021 from 13,645 in December 2019.

He said MacroAsia hopes to reach prepandemic levels for its workforce within two years or less.

On the revenue front, which Luy said has been the biggest challenge for MacroAsia, the company expects 2022 revenues to be on an upward trend compared to 2021 as recent data shows travel movements have now increased.

MacroAsia reached record revenues of P6.16 billion in 2019, but due to the pandemic, it dropped to P2.26 billion in 2020 and further to P1.95 billion last year.

In the first quarter of the year, however, revenues from ground-handling and aviation services, water operations, and in-flight catering all posted a year-on-year increase.

As a result, MacroAsia saw its consolidated net loss after tax reduced to P52.09 million during the period from P284.36 million net loss incurred in the same period last year.

The company said that while the core business segments of the group continue to be impacted by the downturn in air travel due to COVID-related quarantine and airport restrictions, 2022 volume developments now trend toward recovery in the airline industry.

It said the number of flights and meals served are slowly improving as travel and safety protocol restriction measures are slowly eased.

“Beyond 2021, we hope that the trend line of travel recovery will continue as more people get vaccinated and as governments relax travel restrictions all around the world. We look forward to a brighter future with MacroAsia as the operating environment slowly moves toward the new normal,” MacroAsia director Lucio Tan III said.