Megaworld sees rise in profit

ANDREW TAN-LED Megaworld Corp. sees another sharp increase in profits this year, driven by the continuing growth in its residential sales and rental revenues from various developments around the country.

Officials on Friday said the company had no plans of slowing down its expansion in the coming years, using its healthy cash flow to pounce on bargain acquisitions when available.

“We have a strong financial position so we will continue to use that to grow the company,” Megaworld president Kingson Sian told reporters on the sidelines of the company’s annual shareholders’ meeting yesterday.

In his report to investors, Sian said the company expects to easily post a net income of P6 billion in 2011, up from P5.1 billion in 2010.

He said this would come partly from the company’s estimated reservation sales by the end of the year of P44 billion, up from P39.6 billion last year.

“To hit that target, we have to post over P3 billion in sales every month for the entire year. In 2003, we just had a total of P5.3 billion in sales, so as you can see, we have gone a long way,” Sian said.

Sian said this was a testament to the company’s confidence that the Philippine real estate market was still far from hitting the bust that usually comes after every boom period, if at all.

“It’s proof that we’re still bullish on real estate market,” he said.

Megaworld specializes in building mixed residential and commercial areas under its “work, live and play” business model.

In Metro Manila, the company’s major developments are the Newport City in Pasay, Eastwood in Libis and McKinley Hill in Taguig.

The business model also helps the company diversify its revenue sources.

By providing retail spaces that earn rental revenues, the company is protected from major financial problems in case the demand for new homes suddenly drops.

Upcoming projects include the P12-billion Uptown Place in the Bonifacio Global City and the redevelopment of the old international airport in Iloilo.

Megaworld shares closed 0.5 percent lower on Friday to close at P1.90 a piece.