Megaworld doubles 2014 profit to P21.6B

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The Andrew Tan-led property developer Megaworld Corp. more than doubled its net income last year, lifted by sustained growth in sales and rental income and a one-off gain during the period.

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In a statement, Megaworld said its net income surged by 139 percent to P21.6 billion last year from P9.03 billion in 2013 on the back of strong revenue growth and a P12.1-billion non-recurring gain in 2014.

Excluding the one-off gain, the company’s net income last year was P9.4 billion.

The non-recurring gain came from the acquisition and consolidation of Tan’s property units into Megaworld — including Global-Estate Resorts Inc. (GERI), Empire East Land Holdings Inc. (ELI) and Suntrust Properties Inc. (SPI) — as well as the sale of Travellers International Hotel Group Inc. to parent firm Alliance Global Group Inc. as a part of the group’s reorganization initiatives.

“Last year was a milestone for us. With Megaworld celebrating its 25th anniversary, we raked in record earnings and managed to grow our land bank to over 4,000 hectares. Our income growth last year was driven by both real estate sales and rental income,” said Andrew Tan, chairman and chief executive officer of Megaworld.

“We have a more diversified real estate sales mix that is propelled by our integrated urban township developments in Metro Manila, Cebu and Iloilo as well as tourism-related projects in Tagaytay and Boracay,” he said.

Megaworld’s consolidated revenues — excluding the non-recurring income — rose by 15 percent to P41 billion as its real estate segment generated 16 percent growth in sales to P24.6 billion while rental income increased by 17 percent to P7 billion.

“In the meantime, our rental income is growing in line with our expectations. Continued growth in our office and mall leasable space will provide the catalyst for exceeding P10-billion in rental income in 2016,” he added.

Tan noted that the consolidation of GERI, ELI and SPI under Megaworld has strengthened the property vehicle’s land bank inventory nationwide.

“We expect to maintain similar growth momentum generated in the past, achieving a double-digit net income growth every year on the back of a stronger and bigger township portfolio,” Tan said.

This year, the company plans to launch five more townships — two in Luzon, two in Visayas and one in Mindanao – raising the total to 20 from the current 15 townships. The five big-scale developments amount to 400 hectares, which would raise Megaworld’s total township development to 3,100 hectares from the previous 2,700 hectares.

Two of the five new townships were already introduced earlier this month — the 34-hectare The Upper East and the 50-hectare Northhill, which are both located in Bacolod. Megaworld has set aside a P35 billion budget for the two new Bacolod townships.

Earlier, Tan said Megaworld plans to build more than 20 malls in its 20 townships in the next five to eight years, which would amount to 600,000-700,000 square meters of gross leasing area (GLA).

The developer is currently implementing a five-year, P230-billion capital spending program that started in 2014 to build new communities and townships.

Last year, Megaworld launched five townships totaling 1,000 hectares (ha) of land. These are the 12.3-ha Woodside City in Pasig City; 561-ha Southwoods City in the boundaries of Cavite and Laguna; 11-ha Davao Park District in Lanang, Davao City; 62-ha Alabang West in Las Pinas City; and 350-ha Suntrust Ecotown in Tanza, Cavite.

The company’s notable townships include the 18.5-ha Eastwood City in Quezon City, (18.5 hectares); the 50-ha McKinley Hill, the 34.5-ha McKinley West and the 15.4-ha Uptown Bonifacio.

Megaworld holds the property businesses of magnate Andrew Tan, which consist of a 100-percent stake in SPI, 74.96-percent in GERI, and 82 percent in ELI as well as 30 other subsidiaries.

Megaworld is a unit of conglomerate Alliance Global, which also owns and operates Emperador Inc., McDonalds local franchisee Golden Arches Development Corp. and Resorts World Manila operator Travellers International Hotel Group Inc.

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