- Megaworld reports P19.3 billion net income for 2019.
- Net income increase is 22% higher if compared on the preceding year which was only P15.8 billion
- All core business unit of the conglomerate posted double-digit growth
Growth is double digit on all core business units of the Andrew Tan-led property giant Megaworld Corporation for 2019.
The conglomerate registered a net income of P19.3-billion in 2019, or up by 22% if compared to the P15.8-billion that it earned the previous year. The report excluded non-recurring gains of P691-million yet net income grew by 18% or a new record high of P18.6-billion.
In addition, net income attributable to parent company stood at P17.9-billion, also up 18% from P15.2-billion the year before.
According to Megaworld, consolidated revenues grew at a robust pace of 17% or from P57.4-billion in 2018 to P67.3-billion in 2019.
The healthy growth was underpinned by the strong performances of all of its key businesses from rental to office leasing. For instance rental business posted an 18% record growth last year or from P14.3-billion in 2018 to to P16.8-billion in 2019.
Office leasing also soared high. Its office leasing arm, Megaworld Premier Offices, recorded 20% growth on rentals – from P8.7-billion the previous year to P10.5-billion last year. The company completed around 192,300 square meters of new leasable office spaces for last year alone bringing its leasable office spaces inventory to 1.3-million square meters.
“Undoubtedly, our strongest rental business still comes from our leases of prime office spaces across the Philippines. This excludes the office spaces that we have already sold and are currently selling,” said Kevin Tan, chief strategy officer of the Megaworld.
“The good news is that we still continue to see growth in the business process outsourcing (BPO) and information technology (IT) sectors,” added Tan, “which comprised a majority of our office rentals to date.”
Tan also pinpointed the demand growth for office spaces outside of Metro Manila, in which Megaworld occupy the best position among space seekers because of its adequate office inventory in the provinces, including those that are still on its pipeline.
Megaworld is continuously building more office towers, primarily to cater to the growing BPO sector, in Pampanga, Cavite, Laguna, Davao, Cebu, Bacolod, and Iloilo.
In Metro Manila, the company is also building additional office developments in its various townships such as McKinley West and Uptown Bonifacio in Taguig, and Arcovia City in Pasig City.
“This remains to be a very strong sector and very sustainable, and even with the emergence of Artificial Intelligence (AI), we will also see the emergence of new companies that would require spaces,” adds Tan.
Megaworld Lifestyle Malls, on the other hand, also grew income by 14% to P6.3-billion from P5.5-billion in 2018. Around 20,600 square meters of leasable spaces were added to the company’s retail space portfolio, bringing the total leasable space to 453,000 square meters.
The company’s real estate sales in 2019 grew 12%, ending the year at P42.6-billion from P38.0-billion during the previous year. Last year, Megaworld also registered a record level sales reservation amounting to P149-billion. It also launched around P85-billion worth of new projects, mostly residential, and two new office projects for sale: the One Corporate Place in Maple Grove, Cavite; and the International Corporate Plaza in Iloilo Business Park, Iloilo City.
Also last year, Megaworld launched its 26th township, the Arden Botanical Estate located at the boundary of Trece Martires City and Tanza in Cavite, spanning across 251 hectares of raw land. It also launched the 24-hectare Empire East Highland City in Cainta, Rizal along with its subsidiary, Empire-East Land Holdings, Inc.
Meanwhile, the company’s hotel business under the Megaworld Hotels brand also registered phenomenal growth as hotel revenues soared 67% to P2.5-billion compared to previous year’s P1.5-billion. This after the company opened three new hotel properties: 93-room Hotel Lucky Chinatown in Binondo, Manila; 442-room Belmont Hotel Boracay in Boracay Newcoast, Aklan, and the 547-room Savoy Hotel Mactan in Mactan Newtown, Cebu.
“Megaworld still has the lowest financial gearing among the major listed property companies. We ended 2019 with a net debt-to-equity ratio of 26%, even lower than its 2018 level of 31% as gross debts stood unchanged during the year. This should give us more elbow room to lever up once the situation improves, likely by next year,” adds Tan.
During the last 30 years, the company was successful in master-planning integrated urban townships, integrated lifestyle communities and lifestyle estates across the country.