Megawide posts 44% lower income in Q1

MANILA, Philippines - Diversified engineering and infrastructure conglomerate Megawide Construction Corp. posted a first quarter net income of P549 million, 4.37 percent lower than P573 million in the same period last year.

Megawide president Edgar Saavedra said the decrease reflected a cyclical trend in the construction segment, which resulted in the decrease in net income during the quarter.

“It is a function of the order book and projects in varying stages of construction. This cyclicality is simply part of the industry - Megawide is very much on track to meet its full-year target,” he said.

He added construction activities are expected to ramp up in the second half of the year.

Despite the decline in income, consolidated revenues grew to P4.77 billion, representing a 26 percent accomplishment of full-year 2017 target.

The Megawide Group remains bullish on the growth of the construction industry, which is projected to benefit from robust private sector demand for office, commercial and residential projects.

Saavedra said the group continues to be positive about public-private partnership projects such as airports, rail and the integrated transport system.

“Our outlook for 2017 remains positive, especially with the continued focus on infrastructure highlighted by the Duterte administration’s Build, Build, Build program,” he said.

Of the total revenues, construction business accounted for 88 percent or P4.19 billion.

This came mainly from ongoing projects that include DoubleDragon, Urban Deca Tondo, Arthaland, Cyberpark, Southeast Asia Campus, Proscenium, The Curve and The Hive.

As of the end of the period, the company has an order book worth  P37.14 billion, inclusive of P2.87 billion worth of new contracts from the Edades Suites of Rockwell Land Corp., BGC 5th Avenue Apartments of Fort Bonifacio Development Corp., and the Delta Project and Next Gen Zen 3 Zenith Foods Plant Expansion under Zenith Foods Corp.

Meanwhile, operations of the Mactan-Cebu International Airport (MCIA) jumped 32 percent, contributing P570 million or 12 percent to Megawide’s consolidated revenues.

Subsidiary GMR-Megawide Cebu Airport Corp, (GMCAC) increased its net income 44 percent to P271 million, representing 49 percent of total consolidated net earnings.

The company is constructing Terminal 2 and is expected to be operational by the end of June 2018, adding a capacity of eight million passengers per year to the current 4.5 million capacity of Terminal 1.

Saavedra said the increase in passenger traffic is brought about by new international flights and local routes mounted in 2016.

“It is also the direct result of the airport segment’s strategy to project MCIA as a gateway to the country’s top tourist destinations and the main hub for Visayas and Mindanao,” Saavedra said.