Construction and engineering firm Megawide Construction Corp. sees 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 yesterday said 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 low in the first semester of this year, the group was expecting revenues to surge in the third and fourth quarters.
“We are in talks right now for two huge projects,” he said.
Last year, Megawide posted a net profit attributable to parent equity holders of P1.56 billion out of total revenues of P17.7 billion.
In the first six months of this year, Megawide’s attributable net profit was down 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 year, Tan said.
In the first semester of the year, he noted that the group had attained 51 percent of its full-year goal for this segment.
On margins, Tan said these were “pretty stable,” with Megawide maintaining a gross margin of 15 percent and net margin of 6-7 percent. “We believe that we can sustain that kind of margin moving forward.” —DORIS DUMLAO-ABADILLA