Megawide sees 12-14% profit growth

Megawide founders Edgar Saavedra and Michael Cosiquien

Construction and engineering firm Megawide Construction Corp. expects a recovery in earnings this second semester to bring full-year net profit 12-14 percent higher than the level posted last year.

“This will be driven by the increase in construction revenues and cost controls,” Megawide chief finance officer Oliver Tan said on Monday in a press briefing ahead of the company’s annual stockholders meeting.

Megawide president Edgar Saavedra added that while the recognition of construction revenues was quite slow in the first semester of this year, the group was expecting revenues to jump in the third and fourth quarter. “We are in talks right now for two huge projects,” he said.

Last year, Megawide posted a net profit attributable to parent equity holders amounting to P1.56 billion out of total revenues of P17.7 billion. In the first six months of this year, Megawide’s attributable net profit fell by 6-percent year-on-year to P927 million due to slower construction revenues compared to last year, which benefited from presidential election spending.

Construction revenues, which are expected to account for the bulk of Megawide’s earnings this year, are expected to increase by 5 percent this full year, Tan said. In the first semester of the year, he noted that the group had attained 51 percent of its full-year goal on this segment.

Megawide’s construction revenues have doubled since 2011 with the use of the precast facility in Taytay, Rizal, which is considered one of the largest and most advanced facilities of its kind in Southeast Asia.

Megawide is pursuing a P209-billion unsolicited proposal for the 50-year development of Mactan Cebu International Airport, which includes plans for a second parallel runaway to increase capacity to 50 million passengers annually, five times the projected capacity this year.

The company is also bidding for the engineering, procurement and construction (EPC) contract for Clark Airport later this year and the following operations and maintenance (O&M) tender in the first quarter of 2018.

Megawide also recently joined a consortium that has an unsolicited proposal for the East West Railway project, a 9.77-kilometer elevated railway line from Diliman, Quezon City to Espana Boulevard, Manila. This could mark its foray into railway development.