CONSTRUCTION and engineering firm Megawide Construction Corp. grew its net profit last year at the fastest pace since it went public in 2011 as first full-year of operations in Mactan-Cebu International Airport (MCIA) added to the core construction business.
Megawide posted a 66-percent rise in net profit to P1.47 billion last year, the company reported to the Philippine Stock Exchange on Wednesday.
The growth in earnings was driven by a 16 percent expansion in its core construction business and first full-year earnings recognition from its airport operation in Cebu.
Megawide’s construction business contributed 66 percent to total consolidated earnings at P973 million, while airport operation income from MCIA contributed 34 percent at P501 million.
In partnership with Bangalore-based partner GMR Infrastructure Ltd., Megawide took over operations of the MCIA operations in November 2014 after winning a hotly contested public-private partnership (PPP) bidding.
Megawide went public in February 2011 with a net income of P750 million and has since grown by 14.5 percent on a compounded annual growth rate basis.
The increase in construction income last year was attributed to higher construction revenues posted at P13.96 billion, 42 percent higher compared to the same period last year. Megawide reported a higher percentage of completion in on-going projects such as DoubleDragon Plaza at the DD Meridian Park, Araneta Center Gateway Tower 1, The Proscenium by Rockwell, World Hotel and Residences Makati, Shangrila Salcedo Place, SMDC’s Fern Residences, the Philamlife Corporate Tower in Cebu, phase 2 of the PPP for School Infrastructure Project with the Department of Education, and three solar power farm projects boosted revenues in 2015.
Construction operating profit margin declined by 100 basis points to 11 percent from 12 percent in 2014 as a result of contraction in gross profit margin due to tighter competition in pricing.
Meanwhile, Megawide posted airport operation revenues of P1.48 billion from MCIA, in turn attributed to strong aeronautical revenues, commercial revenues and rental revenues brought by a 15.5 percent increase in passenger traffic compared to the same period in 2014.
The company, through its airport subsidiary GMR Megawide Cebu Airport Corp., (GMCAC) continues to embark on new airline and destination marketing initiatives to add new routes and increase passenger volume. Four new international flight routes were launched in March of this year: Los Angeles with Philippine Airlines, Xiamen with Xiamen Airlines, Taiwan with EVA Air, and Dubai with Emirates.
GMCAC is also undertaking renovations in Cebu’s terminal 1 to improve operating efficiencies and lessen passenger processing times. New technologies have been installed such as the universal self-service check-in kiosks and the automated Veripax boarding pass checking systems – which are said to be the first in the country – alongside improved flight information displays and an upgraded baggage-handling system.
New food and beverage establishments have been opened in Terminal 1 while highly-anticipated retail establishments are due to be launched in the coming months. Construction of Terminal 2 is currently ongoing and is expected to be operational by the end of June 2018.
Last year, MCIA was voted 18th best airport in Asia in a survey by The Guide to Sleeping in Airports website that ranks airports based on votes from travellers.