By James A. Loyola
MacroAsia Corporation (MAC), the airline services unit of the Lucio Tan group, reported an 18 percent drop in net income of P551 million in the first half of 2018 from the P673 million earned in the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said “the lower reported net income in 2018 is mainly due to one-off non-operational accounting provisions in 2018 pitted against one-off reversal of provisions for insurance items in 2017 as booked by Lufthansa Technik Philippines (LTP).”
Stripping away the one-off items, MacroAsia ended the first half of 2018 with a core net income of P572 million, 6 percent higher compared to the P538 million in the same period last year.
Core profit growth was driven by the 36 percent hike in second quarter earnings to P318 million, from P233M in the first quarter of 2018.
MacroAsia forecasts a stronger second half performance for its key business units, keeping its overall target of a 20 percent organic growth within sight.
This is due to substantial growth in its client portfolio in catering and ground handling in the first half of 2018 as well as a projected 24 percent growth in LTP’s line maintenance business in the second half of 2018.
MacroAsia’s first half 2018 revenues grew 16 percent, from P740 million in 2017 to P864 million in 2018, as the ground handling business (MASCORP) topline grew by 40 percent and the catering arm (MACS) revenue saw a 5 percent increase year-on-year.
MASCORP’s service revenues reached P42 million, compared to P460 million in 2017. Meanwhile, MACS’ catering revenues reached a new all-time high of P838 million, from P801 million during the same period in 2017.
The strong topline performance of both companies is due to the acquisition of new clients, general volume increases in airline traffic, as well as a stronger US dollar exchange rate this 2018, as most revenues of these units are billed in US dollars.
LTP, which is owned 49 percent by MacroAsia, saw its core revenues reached P2.4 billion in the first half of 2018, a robust growth of 25 percent from its core revenue of P1.9 billion in 2017.