Property giant Megaworld is optimistic that it can recover quickly from the pandemic next year following reports of coronavirus vaccines to be released before year-end.
In his message at the company’s Annual Stockholders’ Meeting via live webcast, Megaworld chairman and CEO Dr. Andrew L. Tan said the company is ready to bounce back as it ‘adjusts to the new demands of the diverse market.’
“Our strong financial standing puts us in an exceptionally good position to weather the crisis and take advantage of the opportunities that will arise once recovery begins. The crisis also served to highlight the value of our offerings,” Dr. Tan said.
To jumpstart the company’s recovery plans, Megaworld is rolling out a 4-point guide to ensure a strategic path towards accelerated growth by next year.
During his presentation, Megaworld chief strategy officer Kevin L. Tan laid down the R.I.S.E plan:
On the community and society at large, Megaworld remains committed to continue its support to government programs in the fight against coronavirus, and in the efforts of both the public and private sectors to help the country move towards economic recovery.
“Today, more than ever, we remain grateful to the trust and confidence of all of our customers, including our stockholders. Despite the impact of the pandemic that hit most businesses, our first half was not as bad as we expected it to be,” Tan points out as he also highlighted the contribution of employee and personnel frontliners assigned in the company’s malls, offices, and various townships across the country during the pandemic.
During his presentation to stockholders, Tan illustrated how Megaworld experienced remarkable growth momentum across all its businesses from 2010-2019, following the five simultaneous (5) major crises that the company faced prior to this decade.
“As we start another new decade for Megaworld, we will always look back to the times when we have outgrown and surpassed the challenges that we have faced because these are the things that have been motivating us to become stronger as a company,” says Tan.
Posted online on August 23, 2020
CLARK FREEPORT -- Andrew Tan-led Alliance Global Group Inc. (AGI) registered a net profit of P4.1 billion in the first half of 2020, reflecting a 67 percent decline from P12.5 billion the year before.
Net income to owners stood at P3.8 billion, down 53 percent from its year ago level of P8.1 billion.
Consolidated revenues fell 26 percent to P61.4 billion from last year's P82.8 billion, as the conglomerate, which has varied interests spanning real estate developments through property giant Megaworld Corporation; leisure, entertainment and hospitality through Travellers International Hotel Group Inc.; spirits manufacturing through Emperador Inc.; quick service restaurants through Golden Arches Development Corporation (GADC), popularly known as McDonald's Philippines, which is a strategic partnership with the George Yang Group; and infrastructure developments through Infracorp Development Corporation, faces the hurdles caused by the coronavirus pandemic that affected most of its businesses.
"The country's strict two-month lockdown weighed heavily on most of our domestic operations. We take comfort from the fact that we have managed to diversify our sources of income, either by type of products or by geographic contribution, and this has helped us mitigate the impact of this pandemic on our group performance," said Kevin Tan, AGI chief executive officer.
In the first half of 2020, Megaworld, posted a 33 percent decline in attributable net income to P5.4 billion from P8.1 billion a year before. Consolidated revenues fell 25 percent year-on-year to P23.8 billion, as the strict community quarantine weighed on mall rentals, real estate sales, and hotel revenues. Office rentals, however, grew 10 percent to P5.6 billion, proving anew its dominance and strong hold in the country's office sector as it catered mostly to the more resilient BPO industry.
Despite the pandemic, Megaworld also managed to register reservation sales of P38 billion during the semester, of which about P17 billion in sales were accomplished during the second quarter when the country was placed under strict lockdown. This indicates some innate strength in housing demand, particularly in the middle- to high-income segment of the market.
Emperador, the world's biggest brandy producer and owner of the world's fifth largest Scotch whisky manufacturer, recorded a two percent year-on-year improvement in attributable profit to P3.3 billion in the first half this year. Consolidated revenues stood flat at P21.5 billion despite the imposition of the liquor ban during the lockdown which affected domestic liquor sales.
In the second quarter, Emperador' sales and earnings got a boost mainly from its Scotland based Whyte and Mackay operations which saw its whisky revenues jump by 29 percent while more than doubling its profit from year ago levels. Its Scotch whisky operations contributed 31 percent of the group's business in the first half of this year.
Meanwhile, the ongoing community quarantine, which put a temporary halt in casino gaming operations, has taken its toll on Travellers International. The owner and operator of Resorts World Manila (RWM) recorded a net loss of P3.7 billion in the first half this year, a reversal from its P845 million net income the year before. Gross gaming revenues were more than halved to P6.1 billion while its non-gaming revenues fell 44 percent to P1.7 billion, the latter due to limited hotel operations and MICE activities. Overall gross revenues plunged 53 percent year-on-year to P7.8 billion.
The community quarantine also significantly affected GADC's operations which saw its bottomline post a loss of P709 million in the first half this year, reversing the profit of P751 million the year before.
Consolidated revenues declined by 37 percent year-on-year to P9.7 billion during the same period. At the start of the lockdown, only about 38 percent of the McDonald's stores were operational, while activities were limited to take-outs, drive-thru, and delivery services as dining-in was not allowed. The level only improved to 84 percent by May with the easing of the restrictions, but still with limited services. GADC ended the quarter with 668 stores.
"This global health crisis has brought us new learnings. We have modified our product offerings and acquired new skills to adapt to the changes in consumer behavior. Likewise, our move to transform our operations under a digital strategy, an undertaking we have started only last year, has supported most of our businesses especially during the strictest period of the community quarantine," Tan said.
Written by Charlene A. Cayabyab - August 14, 2020
Megaworld, the country’s leading developer of integrated urban townships, posted a 34% drop in its net income during the first half of the year, from P8.9-billion to P5.9-billion. Consolidated revenues for the first six months declined by 25% year-on-year to P23.8-billion from P31.7-billion last year.
The company, on the other hand, recorded P2.1-billion net profit during the second quarter this year, a 56% decline from P4.8-billion during the same period last year, as the country was reeling from the impact of the nationwide lockdown that affected most businesses.
“Just as the pandemic began in the last month of the first quarter, we already anticipated a decline in our earnings in the second quarter, but what actually surprised us was the fact that the drop wasn’t as bad as we have expected it to be, and it remains manageable. Our strategic decision of further strengthening our office leasing business way before the pandemic started is now evidently making us more resilient,” says Kevin L. Tan, chief strategy officer, Megaworld.
Leasing revenues from Megaworld Premier Offices, the company’s office leasing arm, was up 10% during the first six months from P5.1-billion last year to P5.6-billion during the same period this year. Contribution of Megaworld Premier Offices now stands at 78% of the company’s total rental income, which mitigated the impact of partial operations of Megaworld Lifestyle Malls due to the pandemic.
This year, the company is set to complete construction of five new office developments in its various townships, particularly in Iloilo Business Park in Iloilo City, Arcovia City in Pasig City, Westside City in Parañaque City, McKinley West and Uptown Bonifacio in Taguig City, adding around 213,000 square meters of completed projects in the company’s leasable office portfolio. To date, these projects are already 90% pre-leased on the average.
“Business process outsourcing (BPO) companies and traditional offices such as corporate headquarters of multinational companies still occupy around 90% of our spaces, which still continued their operations even at the height of the lockdown. We are closing some deals from many Metro Manila-based BPO companies that require an immediate expansion in our provincial townships due to eased quarantine rules there. Our current portfolio of active BPO tenant partners is still huge, and these are our first-line takers in our provincial developments,” Tan points out.
Megaworld is expected to end the year with 70 completed office developments covering 1.4 million square meters of leasable office inventory, excluding those that have already been sold.
Megaworld’s rental income for the first half of 2020 declined by only 11% at P7.2-billion, while hotel revenues were down 29% to P917.9-million from P1.3-billion. Megaworld Hotels, which currently operates 10 hotel properties with around 3,500 rooms under its homegrown brands of Richmonde, Belmont, Savoy, Hotel Lucky Chinatown, and Twin Lakes Hotels, continued serving pre-booked guests from BPO companies as well as balikbayans during the lockdown.
Even as the lockdown limited selling activities for residential projects, Megaworld’s reservation sales during the first half of the year reached P38-billion, which peaked during the second quarter when most parts of the country was placed under ‘enhanced community quarantine.’
Real estate sales during the first six months reached P14.3-billion, reflecting a 29% decline from P20.2-billion during the same period last year, as the company implemented ‘more flexibility’ in payment terms during the quarantine period.
To date, Megaworld has 26 masterplanned integrated urban townships, integrated lifestyle communities, and lifestyle estates across the country, namely: Eastwood City in Libis, Quezon City, (18.5 hectares); Newport City in Pasay City (25 hectares); McKinley Hill (50 hectares), McKinley West (34.5 hectares), Uptown Bonifacio (15.4 hectares) and Forbes Town (5 hectares), all in Fort Bonifacio, Taguig City; Lucky Chinatown in Binondo, Manila (3 hectares); The Mactan Newtown in Lapu-Lapu City, Cebu (30 hectares); Iloilo Business Park in Mandurriao, Iloilo City (72 hectares); Sta. Barbara Heights in Sta. Barbara, Iloilo (173 hectares); Boracay Newcoast in Boracay Island (150 hectares); Twin Lakes in Alfonso, Batangas near Tagaytay (1,300 hectares); ArcoVia City in Pasig City (12.3 hectares); Southwoods City in the boundaries of Cavite and Laguna (561 hectares); Davao Park District in Lanang, Davao City (11 hectares); Alabang West in Las Piñas City (62 hectares); Eastland Heights in Antipolo, Rizal (640 hectares); Suntrust Ecotown in Tanza, Cavite (350 hectares); Maple Grove in General Trias, Cavite (140 hectares); The Hamptons Caliraya in Lumban-Cavinti, Laguna (300 hectares); The Upper East (34 hectares) and Northill Gateway (50 hectares) both in Negros Occidental; Capital Town Pampanga beside the Pampanga Provincial Capitol in the City of San Fernando (35.6-hectares); Westside City in the Entertainment City in Paranaque City (31 hectares); Empire East Highland City in Antipolo, Rizal (24 hectares), Arden Botanical Estate in the boundaries of Trece Martires and Tanza, Cavite (251 hectares).
Online content posted on August 13, 2020