Megaworld net earnings dip to P5 B in first half

Published August 4, 2021, 4:50 PM

by James A. Loyola

Megaworld Corporation, the country’s largest developer of integrated urban townships, reported a 7 percent decline in attributable net income to P5.0 billion in the first half of the year compared to the same period of 2020.

In a disclosure to the Philippine Stock Exchange, consolidated revenues reached P22.2 billion, but netting out the impact of interest and other income, the company’s core revenues registered at P20.6 billion.

Rental revenues decreased by 13 percent to P6.3 billion during the first half of the year compared to P7.2 billion in the same period of the previous year.

Real estate sales amounted to P13.5 billion, down 5 percent year-on-year, while reservation sales ended flat at P37.2 billion during the first half of 2021.

Hotel revenues also declined, by 21 percent year-on-year, to P724 million from P918 million as travel restrictions remained in place.

However, Megaworld said it posted a 39 percent jump in attributable net income to P2.6 billion in the second quarter this year compared to P1.9 billion in the same period last year.

The firm said in a disclosure to the Philippine Stock Exchange that this is because of its strong office leasing business and the improved performance of its retail and hospitality businesses.

Quarterly core revenues grew 20 percent as compared to the preceding quarter to P11.2 billion, highlighted by the recovery of all its business segments during the second quarter.

The company’s rental income increased by 4 percent to P3.2 billion during the second quarter, with Megaworld Lifestyle Malls growing its rental income by 5 percent to P537 million, sustaining its recovery trend since the third quarter of 2020.

The company’s lifestyle mall business rolled out initiatives to encourage foot traffic and expand online sales channels as the lockdowns were eased.

It also continued its support to its retail partners in recovering from the impact of the pandemic by waiving rental fees since last year.

Megaworld Premier Offices, on the other hand, registered a 4 percent increase in its rental income during the quarter to P2.7 billion.

Megaworld Hotels & Resorts posted a 16 percent growth in its hotel revenues to P389 million during the quarter, on the back of the stable performance of the company’s in-city hotels and the opening of Kingsford Hotel in Westside City last March.

Real estate sales during the second quarter also grew 29 percent to P7.6 billion, as construction activities improved during the period.

“We attribute the steady recovery of our businesses to our ability to identify opportunities amidst the pandemic, as we continue to focus our efforts to create products and services that meet the evolving needs of our customers,” said Megaworld Chief Strategy Officer Kevin L. Tan.

He noted that, “While everything remains uncertain as far as the impact of the Delta variant will affect business in the coming months, we remain hopeful that the increasing number of vaccinated Filipinos will help sustain consumer confidence henceforth.”