Megaworld Corp.’s Net Income Experiences Significant Dip

Megaworld Corporation, a leading urban township developer, recently reported a 45% decline in profits to ₱10.6 billion. Compared to 2019, the company’s consolidated earnings fell by 35% to ₱43.5 billion in 2020.

Attributable net income dwindled from ₱17.93 billion in 2019 to ₱9.9 billion in 2020, the firm disclosed to the Philippine Stock Exchange.

“On a quarter on quarter basis, however, the last quarter of 2020 saw signs of remarkable recovery in most of the company’s core businesses, particularly on Megaworld Lifestyle Malls, Megaworld Hotels, and even on the residential business, as the country eased quarantine measures in time for the holiday season,” said Megaworld Corporation.

The company’s real estate sales climbed by 22% in the fourth quarter compared to the third quarter while reservation sales grew by 85% quarter on quarter. Likewise, Megaworld Lifestyle Malls and Megaworld Hotels were up 24% and 25% quarter on quarter, respectively.

“Through continuous innovation and strengthened relationships with our customers and retail partners, we were able to preserve Megaworld’s profitability,” said Kevin L. Tan, Megaworld’s Chief Strategy Officer.

“The adjustments made by our various business segments amidst the challenging environment allowed us to benefit from the gradual reopening of the economy,” Tan added.

“Nonetheless, the main priority of Megaworld during this time was to preserve the jobs of our workers and continue to provide the much-needed services to the communities that we serve,” he explained further.

The firm’s rental income slowed by 23% to ₱12.9 billion in 2020 compared to the previous year. Real estate sales also experienced a drop by 42% to ₱24.9 billion.

Megaworld Hotels was still lined up ₱1.5 billion in 2020 despite the crippling effects of the pandemic on the tourism and hospitality sector. The firm also said it closed new office lease deals last year, amidst lockdowns and government restrictions.

The company leased out approximately 135,000 square meters of office space in Iloilo, Quezon City, and Fort Bonifacio, 78% of which came from existing office partners with plans for expansion.

“These are mostly companies operating BPOs, e-commerce, logistics, and finance. And we are very happy to see the strong interest in our office developments in Iloilo Business Park,” said Tan.

At the end of 2020, Megaworld Premier Offices closed with ₱10.4 billion in rental revenues, close to the figures in the previous year.

“At this point, we can say that our office business is the most stable income generator in our company’s revenue stream with or without this health crisis, and we continue to focus on the expansion of this business in the years to come and further strengthen our leadership in the country’s office property sector,” Tan noted.

Source: Manila Bulletin