Construction boom lifts Megawide Q1 profits by 55%

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LISTED Megawide Construction Corp. (Megawide), on Friday said earnings for the first three months of the year grew by more than half, mainly driven by the country’s booming construction industry.

The diversified engineering company said in a disclosure to the Philippine Stock Exchange that from January to March, it realized a net income of P573 million, 55 percent higher than the P370 million posted a year ago.

Consolidated revenues in the first quarter soared 119 percent to P5.9 billion from the P2.7 billion registered in the same quarter last year.

Its construction business contributed 93 percent of the total revenues at P5.47 billion, up 133 percent versus the P2.3 billion generated in the comparable period in 2015.


“The country’s property sector continues to be strong, buoyed by the growing demand for residential and especially office spaces, primarily from the business process outsourcing [BPO] industry. We are proud to be a contractor-of-choice for prime Philippine property developers,” Oliver Tan, the company’s chief financial officer, said.

The jump in construction revenues was mainly attributed to the inflow of money generated from the new projects. Such new projects include Phase 1 of the Meridian Park of DoubleDragon, Le Grand BPO Cluster Phase 1 and 2 of Megaworld, 8990 Tower in Edsa and Tondo of 8990 Holdings Inc, Landers Warehouse Balintawak and Otis of Southeast Asia Retail, Inc. and three solar power farm projects.

“Megawide’s foray into contracts for renewable energy facilities is a testament to the company’s strategy of diversifying and enhancing our experience and expertise to be ahead of the curve,” Tan added, referring to the company’s solar farm ventures.

Construction revenues were further magnified by P2.5 billion worth of new contracts for thefirst quarter this year. The new projects include Phase 2 of Meridian Park of DoubleDragon, 10 West and St. Moritz of Megaworld, and Cyberpark Phase 2 of the Araneta Group.

The construction firm said that its move to diversify from its core business is likewise reaping positive impact, as revenues from operations of the Mactan-Cebu International
Airport (MCIA) contributed P431 million during this year’s first quarter, higher by 23 percent against the previous year’s P349 million.

Megawide, together with Bangalore-based partner GMR Infrastructure Ltd., took over operations of the Mactan-Cebu International Airport in November 2014 through the Public-Private Partnership (PPP) route.

MCIA operator and Megawide airport subsidiary GMR Megawide Cebu Airport Corporation (GMCAC) grew its revenues as a result of the 10 percent increase in passenger traffic compared with the same period in 2015.

Domestic and international flights increased by 9 percent and 13 percent, respectively, from March 2015. Construction of MCIA’s Terminal 2 is currently ongoing and the facility is expected to be operational by the end of June 2018.

“Results from GMCAC’s operations show that we are on the right track in achieving the goal we have for Megawide to be a diversified engineering and infrastructure company,” Tan said.

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