Freeman Cebu Business

Alliance Global expects policy rate cuts to boost economy

Ehda M. Dagooc - The Freeman

CEBU, Philippines — Alliance Global Group, Inc. (AGI), the holding company of tycoon Dr. Andrew L. Tan, anticipates policy rate cuts, as inflation decreases. This is expected to boost the economy and consumer spending, particularly in housing, tourism, and staycation sectors.

According to AGI chief executive officer (CEO) Kevin L. Tan, the conglomerate is well-positioned to capitalize of these promising opportunities “as they unfold.”

AGI posted a net income of P30.3- billion in 2023, up 20 percent year-on-year despite higher inflation, which pushed overall costs and expenses up during the period.  Attributable net profit stood at a new high of P19.6- billion, reflecting a 21 percent increase from 2022.

The company’s consolidated revenues hit a level of P211.2billion, marking a robust 15 percent growth from P183.6 billion the year before.

“2023 was a historic year for the Group as it delivered excellent performance across all of its businesses, led by its real estate, tourism, and consumer segments. This was achieved even amid heightened competition in the domestic and global market, various macro challenges in some key markets, rising cost pressures, and higher interest rates. Most of our businesses have forged results beyond pre-pandemic levels, even posting new highs in terms of sales, EBITDA, net profit, and all other operating metrics. Such strong performance has encouraged us to carry on with our aggressive business  strategies and expansion plans across our diversified portfolio,” said AGI chief executive officer (CEO) Kevin L. Tan.

AGI has varied interests spanning real estate developments through property giant Megaworld Corporation; spirits manufacturing through Emperador Inc.; leisure, entertainment, and hospitality through Travellers International Hotel Group, Inc.; quick service restaurants (QSR) through Golden Arches Development Corporation (GADC), popularly known as McDonald’s Philippines; and infrastructure development through Infracorp.

Premier township developer Megaworld registered a 17 percent increase in consolidated revenues to P69.7 billion in 2023 from P59.5 billion the year before. This was driven by the sustained 16 percent year-on-year growth in real estate sales, the sharp recovery in the revenues of Megaworld Lifestyle Malls by 54 percent and Megaworld Hotels by 46 percent, in addition to the three percent rise in rentals of Megaworld Premier Offices.

Supported by the stable growth in consumer spending and footfall as the economy continues to recover, occupancy rates of Megaworld’s office spaces, malls, and Metro Manila hotels stood at 88 percent, 93 percent, and 67 percent, respectively.

Meanwhile, reservation sales surged anew to P139- billion, boosted by project launches during the year amounting to P73billion.

Travellers International, the Group’s leisure and tourism arm and owner-operator of Newport World Resorts (NWR), also broke new records in 2023 with net revenues growing by 19 percent year-on-year to P31.9 billion. This was driven by the resurgence in tourism and meetings, incentives, conferences, and exhibition (MICE) activities, which allowed for a stellar 40 percent year-on-year increase in hotel and other revenues to P7.4 billion, while its gross gaming revenues went up by seven percent to a new high of P34.2 billion.

Despite rising cost pressures, EBITDA over the same period went up by eight percent year-on- year to P8.2 billion, its highest level since 2012.

Net income also grew by a robust 89 percent to P2.0 billion from last year’s P1.1 billion.

Emperador, the biggest global brandy company and among the fastest-growing

Scotch whisky manufacturers reported a five percent increase in consolidated revenues of P65.6 billion from the year-ago level of P62.8 billion. This was driven by the sustained improvement in international whisky sales as Whyte and Mackay’s single malt brands

The Dalmore, Fettercairn, Jura, and Tamnavulin continue to make significant inroads in major markets like Asia (mainly China), North America, and travel retail. Emperador Brandy has also maintained its dominance in the domestic brandy market. Attributable net income stood at P8.6 billion.

GADC also sustained its strong growth trajectory in 2023 across all operating levels, driven by increased consumer spending. A long-term partnership between AGI and the George Yang Group that holds the exclusive franchise to operate ‘McDonald’s’ restaurants in the Philippines, GADC reported a record level of sales revenue of P42.8 billion, an increase of another 24 percent from P34.4 billion the year before.

Systemwide sales also grew by 22 percent, backed by SSSG of 15 percent year-on-year. Even with challenges brought about by higher raw material costs and operating expenses, the company registered an attributable profit of P2.5 billion from P1.8 billion a year ago.

McDonald’s Philippines closed the year with 740 stores throughout the country. — (FREEMAN)

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