Megawide earnings slump 40%

Listed builder Megawide Construction Corp. saw earnings slide in 2014 as certain contracts started later than initially planned, apart from the absence of a trading gain the previous year, its annual report showed.

Megawide, an active participant and winner in the government’s public private partnership (PPP) program, said that net income in 2014 was down 40 percent to P831.63 million compared to 2013. Removing the effects of a trading gain, Megawide said the decline was lower at 8 percent.

Its core profit decrease closely mirrored its 2014 contract revenues, which fell 9.5 percent to P9.84 billion year-on-year. Megawide, like other contractors, books earnings on the basis of certain construction milestones. As such, Megawide said its 2014 revenue recognition was deferred “due to various external reasons such as design coordination with clients, access to site and other related site conditions and permitting works.” It said many project construction timetables were pushed toward the end of 2014 and early 2015.

It pointed to its order book, an indicator of future revenues, which stood at P30.26 billion at the end of the first quarter of 2015.

“In 2015, there is a better outlook on construction revenues due to expected ramp up in percentage of completion for projects,” Megawide said, adding that its profit margins were maintained at 16 percent for 2014.

Megawide, which is partly owned by the family of billionaire Henry Sy, whose SM Group is also a major client, said 2014 marked the start of its diversification away from pure construction. Miguel R Camus