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STRONG
sales of middle-income residential and office
developments drove Megaworld Corp.’s first-quarter net
profit although half of the earnings came from its
low-end product subsidiary.
In its
disclosure to the Philippine Stock Exchange, Megaworld
said revenues increased by 29 percent to P1.01 billion
from P786 million in the same period last year. Part of
the net profit was delivered by subsidiary, Empire East
Land Holdings Inc., which was fully consolidated into
the accounts of Megaworld starting this year. Megaworld
increased its stake in Empire East early this year from
45.2 percent to almost 60 percent. The listed subsidiary
registered a net income of P58.5 million in the first
quarter of the year.
But
analysts said the inclusion of Empire East’s results
could lower the margins of the mother firm as the
subsidiary offered lower-end residential products. This
is further compounded by concerns on rising costs of
construction materials, particularly steel, glass and
cement.
Majority-owned by tycoon Andrew Tan, the listed company
said Tuesday revenues for the three-month period grew 63
percent to P4.67 billion versus P2.86 billion a year
ago. The key drivers for this growth came from
real-estate sales, which surged 79 percent to P3.31
billion from P1.85 billion.
“Our
market-oriented strategy and single-minded approach to
excel in all our business segments have provided the
company with a strong platform to sustain our growth,”
said Tan, in his statement.
Last
February, Megaworld, which is known for its “live, work,
play and learn” concept, prelaunched three new
residential condominium projects—One Central in Makati
City, Parkside Villas within Newport City in Pasay, and
Morgan Executive Suites at McKinley Hill in Taguig
City—with an aggregate sales value of over P9 billion.
Megaworld has also lined up a number of exciting
projects to be introduced to the market in the second
quarter.
“We
believe that the property market still has a lot of room
to grow and we continue to be responsive to the demands
of our buyers,” Tan said.
Megaworld’s rental income in the first quarter grew 59
percent to P333.53 million from P209.20 million last
year. The company was able to sustain the growth of its
rental income base through a combination of high
occupancy rates in both its BPO office spaces and retail
developments and an aggressive buildup of its portfolio
of investment properties.
The
company expects to complete about 104,000 square meters
of BPO space this year and about 40,000 square meters of
retail space with preleasing reaching 60 percent and 80
percent, respectively. These developments are expected
to boost rental income further starting next year.
This
year, Megaworld is set to complete several BPO office
buildings, namely: E-Commerce Plaza at Eastwood City,
Two and Three World Square at McKinley Hill, One Campus
Place at McKinley Hill and Newport Corporate Plaza at
Newport City.
On the
retail side, the company is expected to complete its
Eastwood City Mall by end of 2008.
“This
aggressive buildup of rental income properties
underscores our long-term commitment to the communities
we are developing. This is one key reason why we
continue to enjoy strong take-up of our office and
retail developments,” added Tan.
While
the company is aware of the challenges, it remains
upbeat on keeping its growth momentum.
“We
expect to end 2008 with about P3.8 billion in net
profit, thus marking another year of record profit,”
said Tan. |
