Megaworld Q1 income down 9% to P 3.5B on Taal, COVID-19 woes
Tycoon Andrew Tan-led Megaworld Corp. posted a 9-percent year-on-year decline in attributable net profit to P3.5 billion in the first quarter amid challenges arising from the eruption of Taal Volcano and the lockdown measures spurred by the coronavirus pandemic.To conserve cash during this challenging period, Megaworld has slashed capital spending this year to P36 billion from P60 billion, Megaworld disclosed to the Philippine Stock Exchange on Monday.In the first quarter, Megaworld’s consolidated revenues inched up by 1 percent year-on-year to P15.1 billion, around 64 percent of which came from the residential business, while 28 percent was contributed by rental of commercial properties. About 4 percent came from hotel operations while the rest came from noncore revenues.Revenues from rental businesses still grew by 8 percent year-on-year to P4.2 billion during the first quarter, as office leases made up for the slowdown in mall rentals during this period.
First-quarter residential sales rose by a modest 1 percent year-on-year to P9.6 billion as the eruption of Taal Volcano gnawed on sales of projects in the Cavite, Laguna, Batangas, Rizal and Quezon (Calabarzon) area. Early challenges in the supply chain due to COVID-19-related restrictions also resulted in project construction delays, in turn affecting residential revenue recognition.
“Our real estate sales still helped mitigate the impact of the challenges we faced during the quarter. Our office portfolio, which remains very attractive to locators because they are mostly Peza (Philippine Economic Zone Authority)-accredited, provided a buffer against the expected weakness of our mall and hotel operations,” said Kevin Tan, chief strategy officer at Megaworld.
“Our experience in overcoming the 1997 and 2008 financial crises, our strong financial position, and our continuing quest for creativity and innovation, put us in a favorable position to adapt to these new realities and take advantage of the opportunities that will arise once recovery starts,” Tan added. —Doris Dumlao-Abadilla INQ
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