MANILA, Philippines - Megawide Construction Corp., one of the country’s top building contractors, has reported a double-digit profit decline in the first six months of 2014 as it jacked up expenses for the upgrading of its software licenses.
Megawide said net profit dropped 26 percent to P556.06 million in the first half from P747.96 million during the same period a year ago.
The lower earnings were brought about by higher operating expenses due mainly to the increase in salaries, wages and software licenses.
Megawide’s operating expenses shot up 21 percent during the six-month period to P33 million.
“Head office has increased its manpower to provide better support the continuously growing operation of the company. The company also invested in upgrading its license on engineering software to better service the needs of the company in designing construction plans,” the infrastructure and construction firm said.
Gross revenues jumped 21 percent to P5.05 billion in the first half of 2014 from P4.17 billion booked in the same period last year.
Megawide attributed the company’s higher revenues for the period to projects that started in the third and fourth quarter of 2013 as well as those of early 2014.
The projects include Rockwell Business Center, Shangri-La Salcedo, BPO Araneta, and Grass 4 of SM Development Corp.
Megawide said cost of construction is at P4.17 billion in 2014, up 22 percent from P3.42 billion in 2013.
“Increase is directly related to the increase in revenue,” the company said.
Megawide, which started as a contractor for residential towers particularly those of SM Development Corp., corners 15 to 17 percent of the high-rise construction business in the Philippines.