Engineering and infrastructure firm Megawide Construction Corporation has acquired 100 percent ownership of Megawide GMR Construction JV Inc. (JV), the developer of the Clark International Airport Project, after buying out its partners in the joint venture.
In a disclosure to the Philippine Stock Exchange (PSE), the engineering firm led by Edgar Saavedra announced the execution of a Share Purchase Agreement for the acquisition of the remaining 45 percent stake in JV from GMR Infrastructure (Singapore) Pte Limited (GISPL).
JV is a joint venture company of GISPL, Megawide, and GMR Global Pte. Ltd., formerly GMR Holdings Overseas Singapore PTE Limited (GHOSPL).
On Jan. 9, 2024, Megawide paid GISPL P70.84 million for 81 million shares in JV, equivalent to P0.8745 per share. The price was agreed upon by the parties following due diligence review of JV’s assets.
As a result of the acquisition of GISPL’s 45 percent stake and the acquisition of GHOSPL, the JV will become a wholly-owned subsidiary of Megawide.
“The transaction is in line with the Company’s strategy of constantly re-engineering its business and financial portfolio to support its vision of engineering a First-World Philippines, and to explore more resilient, high-growth, and scalable opportunities to anchor its long-term and sustainable growth agenda,” Megawide said.
Megawide also said the acquisition will allow it to leverage its engineering and construction expertise and, at the same time, strengthen its balance sheet.
The firm reported a 69 percent jump in net income to P562 million net income in the first nine months of 2024 from the P332.5 million it earned in the same period last year.
Megawide said higher consolidated revenues drove the performance at P16.3 billion from P15.6 billion in the first three quarters of 2023.
Complemented by lower costs and expense management, this led to a 126 percent growth in operating profit to P1.98 billion and improvement in operating margin to 12 percent from six percent last year.
This also brought consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) to P3.65 billion – 29 percent higher than the same period in 2023.
The construction segment delivered P15.5 billion and contributed 96 percent to consolidated revenues, as the business continued to benefit from increased economic activities and the government’s infrastructure build up.
“Strong macro-economic growth, coupled with easing interest rates, were supportive of business expansion and bode well for construction,” said Megawide President and CEO Edgar Saavedra.
He added that “in addition, we are also benefitting from the government’s infrastructure development and renewable energy capacity build-up, which we hope to capitalize on moving forward.”