Global-Estate Resorts, Inc. (GERI), Megaworld’s integrated tourism and leisure unit, reported lower earnings in the first half of the year although sales have started to recover in the second quarter.
In a statement, GERI said that, excluding non-recurring gains, the company’s net income for the first half of the year reached P728 million, down 9 percent from P801 million during the same period last year.
Attributable net income dropped 37 percent to P544.8 million in the first half of 2020 from P865.13 million in the same period last year.
Consolidated revenues for the first half of 2020 registered at P2.9 billion, reflecting a 29 percent decline from P4.1 billion during the comparable period last year.
On the other hand, rental income weakened by only 8 percent from P377 million last year to P347 million in the first half of 2020 even if mall operations were affected by the Taal eruption in the first quarter, and the strict quarantine measures in the second quarter.
Hotel operations declined by 67 percent from P484 million last year to P162 million for the first six months of 2020 due to the quarantine restrictions during the period.
However, the decline in revenues from the company’s core businesses was offset by the 30 percent reduction in costs and expenses, from P3.1 billion in the first half of 2019 to P2.2 billion this year.
“Boracay was closed to tourists during the second quarter but as soon as the quarantine measures were relaxed in June, we saw a steep climb on the sales of our commercial and village lots in Boracay Newcoast. Buyers now prefer residential and leisure products in nature-rich settings outside of Metro Manila,” explained GERI President Monica T.Salomon.
GERI’s reservation sales of residential projects during the second quarter of the year rose to P3.6 billion from P2.2 billion in the first quarter.
The firm noted that the growth was achieved even as the country was placed on strict lockdown due to the coronavirus pandemic. It did not provide comparative figures for 2019.
Residential projects in Boracay Newcoast in Aklan, Arden Botanical Estate in Cavite, Eastland Heights in Antipolo, Rizal, and Hamptons Caliraya in Laguna comprised the bulk of sales during the first half of the year, which reached P5.8 billion.
“When the news of a possible lockdown came out in mid-March, we had already braced for a conservative outlook for our residential segment,” said Salomon.
She added that, “But, while the country was placed on strict quarantine, we saw aggressive take-ups of our provincial projects. In fact, on the average, our second quarter sales are 61 percent of what we have booked for the entire first half of 2020. And we still have enough inventory to address the demand for residential projects in these areas.”