Megawide nets P440M

www.megawide.com.ph photo

Construction, engineering and infrastructure group Megawide Construction Corp. saw a 10-percent year-on-year drop in first quarter net profit to P439.98 million on lower construction revenues traced to the “cyclical” factors.

Including earnings attributable to minority interest, Megawide’s net profit for the first three months amounted to P549 million, down by 4 percent year-on-year.

Revenues from the operation of Mactan-Cebu International Airport (MCIA) and airport merchandising operations respectively rose by 32 percent and 100 percent to P569.74 million and P8.85 million. The Mactan-Cebu project now accounts for 12 percent of the group’s revenues.

The increase in revenues from the airport business was due to the increase in passenger traffic in the Cebu airport by 16 percent. International and domestic traffic increased by 42 percent and 5 percent, respectively, compared with the same period last year.

Megawide president Edgar Saavedra said: “The increase in passenger traffic is brought about by new international flights and local routes mounted in 2016. it is also the direct result of the airport segment’s strategy to project MCIA as a gateway to the country’s top tourist destinations and the main hub for Visayas and Mindanao.”

On the other hand, Saavedra noted the “expected cyclicality” of the construction segment which had brought about the year-on-year decline in net profit this quarter.

“It is a function of the order book and projects in varying stages of construction. This cyclicality is simply part of the industry,” Saavedra said.

“Megawide is very much on track to meet its full-year target,” he said, adding that the construction business was expected to ramp up in the second half of the year.

For the first quarter, revenues from construction contracts fell by 24 percent year-on-year to P4.19 billion. Construction contributed 88 percent of the consolidated revenue, mainly came from ongoing projects in 2016 which includes Double Dragon, Urban Deca Tondo, Arthaland, Cyberpark, Southeast Asia Campus, Proscenium, The Curve and The Hive.

Megawide reported that order book from the construction business stood at P37.14 billion at end-March, including P2.87 billion worth of new contracts from the Edades Suits of Rockwell land, BGC 5th Avenue Apartments of Fort Bonifacio Development Corp., Delta Project and Next Gen Zen 3 Zenith Foods Plant expansion under Zenith Foods Corp.

“Construction segment showed parabolic quarterly revenue contribution in 2016 where the two quarters revenues are higher than the last two quarters as more projects were completed in early 2016 while 2017 is expected to have hyperbolic quarterly revenue contribution where last two quarters of 2017 will have slightly higher quarterly revenue contribution,” the company said in a regulatory filing.