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Megawide posts lower net income in 2019, Q1

By James A. Loyola

Megawide Construction Corp. reported a decline in consolidated net income of ₱1.04 billion last year from ₱1.8 billion in 2018 due to interest and other non-cash charges associated with the full year operations of Terminal 2 at Mactan-Cebu International Airport.

In a disclosure to the Philippine Stock Exchange, the firm reported consolidated revenues of ₱19.8 billion in 2019, based on unaudited financial results, 24 percent higher than the previous year.

This is due to strong recovery by the construction business, continued momentum of airport operations, and positive traction from landport operations.

“We are building on the strong performance of all our segments for the full year of 2019 and the first quarter of this year,” said Megawide Chairman and CEO Edgar Saavedra.

He added that, “Moving forward, while we anticipate challenges created by the COVID-19 pandemic, we are also primed to take advantage of the new opportunities it has created.”

The company’s consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) also increased 7 percent to ₱4.7 billion.

The robust performance continued in the first quarter of 2020 as consolidated revenues went up by 42 percent to ₱5.1 billion, with EBITDA rising 25 percent to ₱1.4 billion versus same period last year.

Net profit for the quarter was recorded at ₱206 million, lower than the ₱281 million earned in the same period last year, amid the onset of the COVID-19 global pandemic.

The construction segment posted a 20 percent growth in revenue to ₱15.2 billion in 2019 and contributed 77 percent to the Group’s total.

Construction revenues consistently rose from ₱2.6 billion in the first quarter of 2019 to ₱4.2 billion in the fourth quarter of the year as the business recovered from 2018’s performance.

In the first quarter of 2020, the construction business continued to rebound as revenues increased 52 percent year-on-year to ₱3.9 billion, despite the imposition of the enhanced community quarantine (ECQ) across Luzon in the second half of March.

Airport operations sustained its strong momentum in 2019 as revenue grew 23 percent to ₱3.7 billion and contributed 19 percent to the total.

However, the global onset of COVID-19 affected both international and domestic travel early in the year with the imposition of travel restrictions. As a result, airport revenues declined by 10 percent to ₱80 million in the first three months of 2020 as total passenger volume fell by 21 percent to 2.4 million.

The Parañaque Integrated Transport Exchange (PITX) continued to gain more traction in 2019 as revenues reached ₱555 million from ₱18 million in 2018. On the other hand, the terminal retail area was 71 percent leased out, of which 30 percent had already commenced operations.

In the first three months of 2020, the land port delivered ₱287 million in revenues and significantly compensated for the slowdown in airport operations, despite the suspension of terminal operations under ECQ guidelines towards the second half of March.


Source: Manila Bulletin (https://business.mb.com.ph/2020/05/29/megawide-posts-lower-net-income-in-2019-q1/)

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