Megaworld Q3 earnings recover as economy reopens

Tycoon Andrew Tan-led property developer Megaworld Corp. saw its third-quarter earnings improve from the second quarter as the gradual reopening of the domestic economy boosted rental income from shopping malls while the office portfolio exhibited resilience during the coronavirus pandemic.

Megaworld chalked up P2.2 billion in third-quarter net profit, down by 54 percent from the earnings seen in the same period last year when the COVID-19 pandemic had yet to depress the economy. However, this was a 7-percent improvement from the earnings in the second quarter when the strictest quarantine protocols were in place.

For the nine-month period, Megaworld’s net profit amounted to P8.1 billion, down by 41 percent year-on-year as the pandemic-induced lockdowns adversely affected core businesses. Consolidated revenues declined by 31 percent year-on-year to P33.3 billion for the nine-month period.

For the third quarter alone, Megaworld’s revenues declined by 42 percent year-on-year to P9.5 billion. However, business improved from the second quarter, translating to a 9-percent sequential improvement in revenues.

Third-quarter rental income grew by 13 percent to P3.4 billion from the previous quarter as quarantine restrictions were eased.

“We are seeing a lot of optimism now as we have begun the recovery of our mall business and our office leasing business continues its growth,” Kevin Tan, Megaworld chief strategy officer, said in a press statement on Wednesday.

“The government’s recovery efforts especially in reopening the economy, coupled with our recovery strategies, have greatly helped our core businesses bounce back and we continue to be optimistic of this uptrend as we strive to provide the right balance between safety, convenience and an enjoyable experience in our townships all over the country,” added Tan.

Megaworld’s office rental business grew by 6 percent to P3 billion in the third quarter versus the second quarter and likewise increased by 11 percent year-on-year. During the first nine months of the year, this segment grew revenues by 11 percent to P8.6 billion.

With the relaxation of lockdown protocols that allowed people to start shopping and dining in malls, mall revenues surged by 117 percent to P400 million in the third quarter compared to the previous quarter.