Megaworld posts 58% profit hike

Upscale real estate developer Megaworld Corp. has reported a 58-percent jump in its first half net profit to P864 million from only P545 million in the same period last year on higher sales across all product lines.

Based on the financial report filed with securities regulators, Megaworld registered revenues of P3.3 billion, up 22 percent from P2.7 billion. Of the total, real state sales-related revenues rose 19 percent to P2.5 billion, accounting for 75 percent.

Rental income reached P323 million or an increase of 20 percent from the previous level. The figure represents 10 percent of total revenues.

Megaworld said efficient cost management coupled with higher prices of condominium units lifted gross margins from real estate sales by 39 percent in 2006.

Reservation sales went up to P5.4 billion, almost equal the total volume that Megaworld generated for the whole year of 2005.

Megaworld executive director Kingson Sian said: "Megaworld’s impressive revenue performance in the first semester of the year is an indicator of an increasingly buoyant property market. More importantly, it underscores Megaworld’s well-entrenched position as one of the largest and most successful developers in the country."

Sian said the company expects to meet its growth targets going forward, especially with the launching of two new major projects in July 2006: Manhattan Garden City in Araneta Center and Cityplace in Manila’s Chinatown.

Manhattan Garden City, located in the heart of Cubao, is a 9,000-unit residential condominium project linked directly to Gateway Mall and two light-rail transit lines, LRT-2 and MRT-3, making it the first major mass-transit-oriented residential development in the country.

Cityplace, on the other hand, is a mixed-use development with 2,000 residential units, a retail center, BPO offices and a hotel. Cityplace is significant as it is the first major urban renewal project in Manila covering an entire 2.5-hectare block in the center of Chinatown.

Sian believes that as the market continues to pick up, Megaworld will maintain its position as the largest residential condominium developer and business process outsourcing office landlord in the country.

"Megaworld is well positioned to benefit from the increasing market demand with no less than six mega-projects in key high-growth sub-markets throughout Metro Manila. These are Eastwood City in Quezon City, Forbestown Center in Bonifacio Global City, McKinley Hill in Taguig City, Newport City in Pasay City, Manhattan Garden City in Cubao and Cityplace in Manila. These projects will serve as Megaworld’s major income earners and growth drivers in the next 10 years," Sian said.

Gilbert Lopez of Macquarie Securities said Megaworld should be able to sustain its momentum as a major property developer. "Over the past 10 years, we have seen the company make major strides as a property developer in terms of size and product offerings. Megaworld is currently developing 33 residential projects simultaneously within its six township developments," Lopez said.

Megaworld successfully raised $105 million from a primary share issue taken up principally by investors from Asia, Europe and the US. It raised another $100 million through the launch of its five-year straight bond, attracting strong interest from both local and foreign investors. Both these fund-raising activities marked a significant achievement for Megaworld as these were the first successful equity and debt offerings of a listed property company in the Philippines since 1997.