Deal delays hit Megawide’s Q1 earnings

Construction and infrastructure firm Megawide Construction Corp. posted an attributable net profit of P239.25 million in the first three months, down by 49.6 percent year-on-year due to a decline in contract revenues.

Consolidated revenues amounted to P3.56 billion in the first quarter, down by 20 percent year-on-year but up by 10 percent compared to the fourth quarter of 2018, Megawide disclosed to the Philippine Stock Exchange.

The construction segment contributed 72 percent of the group’s total revenue amounting to P2.57 billion, which declined by 31.3 percent year-on-year in the first quarter.

After a slow start for the year, the company said it was now experiencing a ramp up of its operations with the takeoff of structural works on recently awarded contracts. Compared to the fourth quarter performance in 2018, revenue for the quarter increased by 10 percent.

“We expect to sustain this growth throughout the year as our existing projects also steadily increase accomplishment levels,” said Edgar Saavedra, Megawide chair and CEO.

New contracts secured in 2019 reached P6.2 billion, which included Megaworld’s Sunset business process outsourcing, Gentry Manor and Empire East Highland Mall. These brought Megawide’s outstanding order book to P53.68 billion as of end-March, providing revenue visibility for the next two to three years.

Ongoing projects that contributed to the first quarter’s revenues include Araneta’s Gateway Mall, 8990 Holding’s Ortigas and Tondo Projects and Midland’s Taft East Gate.

Airport operations contributed 25 percent of Megawide’s three-month revenues amounting to about P892 million, rising by 38 percent year-on-year. The balance of 3 percent of Megawide’s revenues in the quarter came from the combined airport merchandising and terminal operations.

Megawide’s airport operations also showed steady improvement after the opening of Mactan Cebu International Airport terminal 2 in July 2018, the company said.