AGI’s Q1 net profit down 32%
Tycoon Andrew Tan-led Alliance Global Group Inc. (AGI) saw a 32-percent year-on-year drop in first quarter attributable net profit to P3 billion as the eruption of Taal volcano and the start of the local coronavirus contagion battered its property, gaming, liquor and fast-food businesses.
Consolidated revenues fell by 7 percent to P38 billion in the first quarter, AGI disclosed to the Philippine Stock Exchange on Tuesday.
Including earnings attributable to minority interest, AGI’s first quarter profit declined by 39 percent year-on-year to P4 billion.
“We started 2020 with twin challenges, and these are changing the way we live and do business today,” Kevin Tan, AGI chief executive officer, said in a press statement.
“While most businesses have been affected by this health crisis, the situation reinforced our belief that our business model is sound and sustainable. For instance, we view our decision to focus on township developments as the way of the future. Even our foray into the international market for our spirits business has allowed us to diversify our risks, even as this pandemic has global dimensions,” added Tan.
AGI has interest in the following: real estate through Megaworld Corp.; leisure, entertainment and hospitality through Travellers International Hotel Group Inc.; spirits manufacturing through Emperador Inc.; quick service restaurants through Golden Arches Development Corp. (GADC), popularly known as McDonald’s Philippines; and, infrastructure through Infracorp.
Travellers International, owner and operator of Resorts World Manila (RWM), suffered a net loss of P1 billion in the first quarter this year, reversing its modest P244 million net income the year before. Total gross revenues declined by 19 percent year-on-year to P6.9-billion in the first quarter, mirroring the same drop in gross gaming revenues (GGR) to P5.6 billion.
GGR declined with the suspension of casino gaming operations in line with the community quarantine was imposed by mid-March. Non-gaming revenues also retreated by 17 percent to P1.3 billion with the limited operations of its hotels activities due to the pandemic.
GADC saw its attributable net income plunge by 72 percent year-on-year to P108 million in the first quarter. Consolidated revenues declined by 9 percent year-on-year to P6.8 billion during the same period, as some of its store operations were disrupted by the Taal Volcano eruption in January and the community quarantine in mid-March.
GADC, a long-term partnership between AGI and the George Yang Group that holds the exclusive franchise to operate restaurants in the Philippines under the ‘McDonald’s’ brand, ended the quarter with 669 stores.
It was earlier reported that Megaworld had posted a 9 percent year-on-year decline in attributable net profit to P3.5 billion in the first quarter amid the challenging environment.
Emperador also saw a 16 percent year-on-year drop in first quarter net profit to P1.5 billion as the lockdown and liquor ban imposed on key cities since mid-March gnawed on sales alongside higher excise taxes slapped on alcoholic drinks.
“Meanwhile, our early digital transformation initiatives have also helped us adapt quickly to the fast-changing environment. As such, we see a silver lining to this crisis. Our new learnings and our ability to adapt to emerging trends should make our organization better equipped and even stronger beyond this crisis,” Tan said.
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