Megaworld declares 20% stock dividend, sees 30% profit hike

Upscale property firm Megaworld Corp. has declared a 20-percent stock dividend to its shareholders.

In a disclosure to the Philippine Stock Exchange, Megaworld said it will issue a total of 1.775 billion common shares to come from a P7-billion increase in its authorized capital stock.

The record date for the stock dividend will be fixed upon approval of the company’s increase in authorized capital stock.

Megaworld expects a 25-to 30-percent rise in its 2004 net income, driven by higher sales from its middle-income projects and rentals of office space by outsourcing companies. Net income is seen to reach between P717 million and P746 million compared with P574.2 million in 2003.

New projects such as Newport City at the Villamor Air Base is expected to spur sales and contribute to higher rental income after pre-selling starts by the middle of the year.

Megaworld developed Eastwood City, a 16-hectare commercial and business enclave east of the capital that houses a cyberpark where many call centers and information technology firms are located.

The company will spend about P4 billion this year to further develop Eastwood and to start construction at Newport. The company also plans to develop other large-scale projects such as Forbes Town Center and Mckinley Hill in Fort Bonifacio.

Mckinley Hill will comprise a residential subdivision, low-rise condominiums and a commercial center. The project is a 50-50 joint venture with the Alliance Global Group Inc.

Megaworld has already started construction of luxury garden residences that make up the first phase of the P15-billion Forbes Town Center.

The company hopes to complete all residential condominium developments between 2005 and 2008. Funding will come from internally-generated cash although Megaworld said it could tap borrowings in the latter part of the year.

Slated for completion this year up to 2008 are the Eastwood Excelsior, One Orchard Road, the Grand Eastwood Palazzo and the Eastwood Parkview. The Eastwood Excelsior is a twin-tower residential condominium building while Parkview is a Miami-style twin tower residential-mall development.

Megaworld has a total nationwide landbank of one million square meters, good for seven to 10 years of development, excluding potential joint ventures.

The company is also optimistic on the increasingly bright prospects of the business process outsourcing or BPO industry. A new cyberbuilding in Eastwood City is currently in the pipeline and the company is looking to build more office space for BPO firms in other strategic locations.

Through the combined efforts of the Department of Trade and Industry and key BPO players, the Philippines is poised to capture a bigger share of the global outsourcing market, particularly call center services. BPO is the country’s fastest-growing sector and studies show that it will be a multi-billion dollar industry in the next few years.

Apart from property development, Megaworld is also into hotel operations through Prestige Hotels & Resorts Inc., a subsidiary which operates the Richmonde Hotel in Ortigas Center.