Property developer Megaworld Corp. posted a 67-percent year-on-year decline in first-semester net profit to P5.43 billion due to large non-recurring gains that shored up the comparative profit level last year.
But taking out the impact of P11.62 billion in non-recurring gains in the first semester of 2014, Megaworld’s core profit for the first six months rose by 12.51 percent year on year on the back of a double-digit expansion in both commercial property rental and residential development, Megaworld said in a statement on Wednesday.
The P5.43-billion net profit for the first six months of 2015 included profit attributable to non-controlling interest. Based on last year’s regulatory filing, the comparative profit level for first semester 2014 stood at P16.44 billion. The non-recurring gains of P11.62 billion in the first semester of 2014 were due to the revaluation of shares arising from Megaworld’s acquisition from parent conglomerate Alliance Global Group Inc. of a 49.2-percent stake in leisure estate arm Global-Estate Resorts Inc. (Geri).
Megaworld said the aggressive expansion of its pioneering concept of integrated urban townships and mixed-use communities across the country remained the key driver of growth.
“The backdrop of the Philippines’ vibrant economy continues to benefit the local property market as evident in our first-half results. We look forward to another bright year for Megaworld as we focus our efforts on aggressively expanding our townships across the country and providing new and innovative offerings in residential, office and commercial businesses. This year, five new townships will be launched, which will give us around 400 hectares of land for development,” said Francis Canuto, chief finance officer at Megaworld.
Rental income rose 22.25 percent to P4.21 billion in the first half of the year, in line with its goal to generate P9 billion in recurring income from commercial property portfolio this year.
“We remain steadfast in strengthening our recurring income businesses. This year, we are opening new malls and office towers that will allow us more opportunities for leasing growth. Megaworld is on track in achieving its P10-billion target in rental income next year,” Canuto added.
Meanwhile, consolidated core revenues of the Megaworld group—which includes Geri, Empire East Land Holdings Inc. and Suntrust Properties Inc.—amounted to P20.93 billion for the first half of 2015, up 13.56 percent from the same period last year.