Precast and Construction Solutions (PCS), Megawide Construction Corporation’s engineering innovations unit, reported a modest two percent improvement in revenues to P720 million in the first nine months of 2022 from the same period in 2021 and more than three times the P206 million recorded in 2020.
In a disclosure to the Philippine Stock Exchange, Megawide said sales of precast remain as the biggest contributor at 54 percent, followed closely by batching plant or ready-mix concrete at 34 percent, and the remainder coming from equipment and formworks sales and rental.
The Company started to strategically offer its PCS services to external clients in 2018 to expand their footprint in the local industry and promote a more environmentally-friendly innovation.
The segment is proving to be an emerging growth area for Megawide, not only as a pure complementary service under the Company’s fully-integrated construction platform, but as a separate income-generating business catering to a wide array of residential, commercial, and industrial uses.
“As ancillary businesses, these legs can benefit from the Company’s healthy order book as part of the value chain,” said Megawide Chairman and CEO Edgar Saavedra.
He added that, “Externally, they can also look for their own clients outside of Megawide to increase their customer base and diversify their revenue stream to leverage on the usability of precast as a natural progression in the construction industry.”
According to Saavedra, this segment is more scalable and could deliver better margins.
“Precast production follows a manufacturing model, where economies of scale can be achieved, thus result in higher margins. Operating the largest and most advanced precast facility in the country gives us an opportunity to maximize our unique advantage,” he noted.
Megawide’s PCS unit, as a whole, used to make up less than 3 percent of total construction revenues but has more than doubled its contribution in the first nine months of 2022 as its scope widened to include affordable housing (with Phirst Park Homes supply and installation contracts) and horizontal infrastructure (with Skyway supply contracts), among others.
The Company recently inaugurated a second plant to expand its total capacity and serve a bigger clientele.