MANILA – Megaworld, the country’s leading developer of integrated urban townships, posted a 34-percent drop in its net income during the first half of 2020 to PHP5.9 billion from PHP8.9 billion during the same period last year.
In a statement Thursday, the company said its consolidated revenues for the first six months declined by 25 percent year-on-year to PHP23.8 billion from PHP31.7 billion last year.
It recorded PHP2.1 billion net profit during the second quarter this year, a 56-percent decline from PHP4.8 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,” said Kevin Tan, chief strategy officer at Megaworld.
Leasing revenues from Megaworld Premier Offices, the company’s office leasing arm, was up 10 percent during the first six months from PHP5.1 billion last year to PHP5.6 billion during the same period this year.
Contribution of Megaworld Premier Offices now stands at 78 percent 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, adding around 213,000 square meters of completed projects in the company’s leasable office portfolio.
“Business process outsourcing (BPO) companies and traditional offices such as corporate headquarters of multinational companies still occupy around 90 percent 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 added.
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 percent at PHP7.2 billion, while hotel revenues were down 29 percent to PHP917.9 million from PHP1.3 billion.
Even as the lockdown limited selling activities for residential projects, Megaworld’s reservation sales during the first half of the year reached PHP38 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 PHP14.3 billion, reflecting a 29-percent decline from PHP20.2 billion during the same period last year, as the company implemented ‘more flexibility’ payment terms during the quarantine period.
To date, Megaworld has 26 masterplanned integrated urban townships, integrated lifestyle communities, and lifestyle estates across the country. (PR)