Megaworld Corp. booked eight percent lower net income in the first quarter of the year, to P3.8 billion from P4.1 billion in the same stretch last year owing to the impacts of the Taal volcano eruption and the COVID-19 pandemic.
In a disclosure to the Philippine Stock Exchange on Monday, the Tan-led property developer said core profit during the period dropped three percent excluding P189-million worth of non-recurring gain. Net income attributable to parent company fell nine percent to P3.5 billion from P3.8 billion.
Megaworld’s consolidated revenues in the quarter finished flat at P15.1-billion from P14.9 billion last year. Broken down, the residential business accounted for 64 percent of Megaworld’s revenues while rentals and hotel operations took up 28 percent and four percent, respectively. Non-core revenues accounted for the balance.
“Our real estate sales still helped mitigate the impact of the challenges we faced during the quarter. Our office portfolio, which remains very attractive to locators because they are mostly PEZA-accredited, provided a buffer against the expected weakness of our mall and hotel operations. We keep an eye on effective strategies that will cushion the impact of these challenges for the rest of the year,” company chief strategy officer Kevin Tan was quoted as saying.
Megaworld said residential sales during the period ended flat at P9.6 billion from P9.5 billion owing to the Taal volcano eruption which impacted the sales of CALABARZON projects, as well as supply chain challenges due to coronavirus-related restrictions which led to delays in project construction.
Revenues from rental businesses rose eight percent to P4.2 billion driven by office leases as mall rentals slowed down due to pandemic concerns. Hotel revenues also fell four percent to P551 million as check-ins especially from international guests receded owing to COVID-19.
As of end-March, Megaworld tallied cash reserves worth P25.7 billion and a net debt-to-equity ratio of 26 percent. For 2020, the developer is reducing its capital spending to P36 billion from P60 billion.
“During the past 31 years, we have witnessed and surpassed several crises that rocked our nation. Our company’s resilience has been tested over and over again. Our experience in overcoming the 1997 and 2008 financial crises; our strong financial position; and our continuing quest for creativity and innovation, put us in a favorable position to adapt to these new realities and take advantage of the opportunities that will arise once recovery starts,” Tan said.
Megaworld said it is boosting its e-commerce capability to speed up the recovery of its commercial and hotel businesses. It is set to roll out digital platforms in the coming weeks.