By James A. Loyola
Engineering and infrastructure conglomerate Megawide Construction Corporation reported a net income of P835 million as consolidated revenues grew 7 percent to ₱13.7 billion during the first nine months of 2019 from the ₱12.8 billion posted in the same period last year.
In a press briefing, the firm said all business segments contributed to the performance, led by construction, which delivered ₱10.5 billion from ₱10.3 billion in the previous year.
Airport operations registered revenues of ₱2.7 billion, up 25 percent year-on-year, while airport merchandising improved 15 percent. Meanwhile, lease commencement at the Parañaque Integrated Transport Exchange (PITX) drove the initial revenue contribution from the landport operations.
In the third quarter alone, consolidated revenues accelerated to ₱5.5 billion from ₱4.6 billion in the second quarter, as the Company sustained the revenue momentum of its portfolio since the start of the year.
Net income was lower compared to the ₱17.2 billion earned in the same period last year due to the expected increase in group-wide finance costs, associated with new loan drawdowns for existing operations and expansion purposes, as well as the slower than expected conversion of construction revenues.
However,Megawide Chairman and CEO Edgar Saavedra noted that, “the coming year will be a lot stronger due to the catch up in construction revenues, normalizing airport operations, and full commercial potential of PITX coming into play. Finance costs are also expected to taper off with loan take outs and possible refinancing at lower interest rates.”
The Company has focused strategically on securing longer gestation projects for its construction business to provide a more stable and visible revenue pipeline and manage the impact of the industry’s natural cyclicality.
“The continued recovery in construction this year will serve as a springboard for an even stronger performance next year, when we will embark on big-ticket, long-term projects that will provide better visibility and reduce the volatility for the Company’s main revenue driver and business enabler. At the same time, we are also engaging in quick turnaround projects that will augment margins,” said Saavedra.