Urban developer Megaworld Corporation reported a 40 percent drop in net income to P8.1 billion in the first nine months of 2020 from the P13.7 billion earned in the same period last year but sees signs of recovery in the third quarter.
In a disclosure to the Philippine Stock Exchange, the firm said earnings declined because its core businesses were affected by months of strict lockdowns imposed by the government.
Consolidated revenues were 30 percent lower at P33.3 billion in the first nine months of 2020 from P48.1 billion in the comparative period last year.
However, during the third quarter, the company’s revenues grew by 9 percent to P9.5 billion from P8.7 billion in the second quarter. Net income also improved by 7 percent quarter-on-quarter to P2.2 billion.
“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,” said MegaworldChief Strategy Officer Kevin L.Tan.
Rental income grew 13 percent to P3.4 billion during the third quarter from P3 billion in the previous quarter as quarantine restrictions have been eased.
The company’s office rental business continued its growth momentum during the quarter as it grew 6 percent to P2.96 billion from P2.80 billion in the previous quarter.
Year-on-year, it grew 11 percent in the third quarter this year from P2.68 billion during the same period last year, while during the first nine months of the year, it rose 11 percent to P8.57 billion from P7.75 billion in the same period of 2019.
Megaworld Lifestyle Malls also more than doubled its revenues during the third quarter compared to the previous quarter as relaxed lockdown protocols allowed people to start shopping and dining in malls.
Mall revenues rose 117 percent to P400 million in the third quarter compared to the previous quarter even as Megaworld Lifestyle Malls still offered rental discounts to its retail and merchant partners.
“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,” said Tan.
While the company’s real estate sales were almost flat in the third quarter compared to the second quarter at P4.75 billion, it has seen a remarkable growth in reservation sales of its horizontal residential projects in various tourism estates in the provinces through its subsidiary Global-Estate Resorts, Inc. (GERI).
The company’s hotel properties, on the other hand, recently re-opened in Tagaytay and Boracay, in a bid to further boost hotel revenues in the coming quarters.
During the first nine months of the year, hotel revenues dropped 38 percent to P1.17 billion from P1.87 billion in the same period last year due to temporary closures brought about by the pandemic lockdowns in the country.
“With all the innovations in the hospitality industry being undertaken, the tourism industry will eventually bounce back adopting these new realities in doing business. Our hotels are focused on these initiatives and we look forward to re-opening our other hotels for tourism with these new offerings,” said Tan.