Top urban township developer Megaworld Corporation reported a 45 percent drop in net income to P10.6 billion as consolidated revenues shrank 35 percent to P43.5 billion compared to 2019 due to the pandemic.
In a disclosure to the Philippine Stock Exchange, the firm said attributable net income declined to P9.9 billion in 2020 from P17.93 billion in the previous year.
“On a quarter on quarter basis, however, the last quarter of 2020 saw signs of remarkable recovery in most of the company’s core businesses, particularly on Megaworld Lifestyle Malls, Megaworld Hotels, and even on the residential business, as the country eased quarantine measures in time for the holiday season,” it noted.
Real estate sales grew 22 percent in the fourth quarter compared to the third quarter last year with reservation sales were up 85 percent quarter on quarter, while Megaworld Lifestyle Malls and Megaworld Hotels also grew 24 percent and 25 percent quarter on quarter, respectively.
“Through continuous innovation and strengthened relationships with our customers and retail partners, we were able to preserve Megaworld’s profitability,” said Megaworld Chief Strategy Officer Kevin L. Tan.
He added that, “The adjustments made by our various business segments amidst the challenging environment allowed us to benefit from the gradual reopening of the economy.”
“Nonetheless, the main priority of Megaworld during this time was to preserve the jobs of our workers and continue to provide the much needed services to the communities that we serve,” explained Tan.
Megaworld’s rental income slid 23 percent to P12.9 billion last year compared to the year before, while real estate sales declined by 42 percent to P24.9 billion year-on-year.
Despite the effects of the pandemic to the tourism and hospitality industry, Megaworld Hotels still booked P1.5 billion last year.
The firm said it closed deals for new office leases last year, even as the three quarters of the year were marred by community lockdowns across the country.
Around 135,000 square meters of fresh office space inventory were leased out in the company’s townships in Iloilo, Quezon City, and Fort Bonifacio and about 78 percent of these new leases are part of the expansion programs of existing office partners while the rest were taken by new client companies.
“These are mostly companies operating BPOs, e-commerce, logistics, and finance. And we are very happy to see the strong interest in our office developments in Iloilo Business Park,” said Tan.
He noted that, “Approximately 20 percent of new leases have been booked there and we even cemented our dominance in terms of market share in the Iloilo office market.”
In addition to new leases, the company also bagged lease renewals of around 145,000 square meters of office spaces from various company tenants last year.
Megaworld Premier Offices ended 2020 with P10.4-billion in rental revenues, just around the same level in the previous year.
The company was also able to complete the construction of around 87,000 square meters of fresh office spaces last year, bringing the total leasable office inventory to 1.4-million square meters. This excludes the office spaces that are for sale in Iloilo Business Park and Maple Grove in Cavite.
“At this point, we can say that our office business is the most stable income generator in our company’s revenue stream with or without this health crisis, and we continue to focus on the expansion of this business in the years to come and further strengthen our leadership in the country’s office property sector,” said Tan.