MacroAsia posts 7.8% profit hike in January-September

Amid the global financial crisis that has taken a heavy toll on major businesses, MacroAsia Corp., the listed aviation-related services firm of the Lucio Tan Group of Companies, reported a 7.84-percent rise in net profit in the first nine months of the year, largely due to the strong performance of affiliate Lufthansa Technik Philippines Inc. (LTP).

In a financial report filed with securities regulators, MacroAsia said consolidated net income reached P248.81 million from January to September 2008, higher compared with the previous level of P230.71 million.

“The increase is mainly attributable to the increase in the company’s share in the net income of its associates which grew by P65.5 million (or 30 percent) year-on-year, significantly because of the increase in the revenues of LTP, particularly coming from aircraft overhaul services to foreign airline customers,” MacroAsia said.

The company said the growth offset the decrease in catering revenues by 12 percent due to lower meal volume and the appreciation of the peso.

LTP is is a joint venture between MacroAsia (49 percent) and Lufthansa Technik AG of Germany (51 percent). It is currently providing aircraft maintenance, repair and overhaul services from its facility at the Ninoy Aquino International Airport to PAL, Lufthansa Airlines, Singapore Airlines, Cathay Pacific Airways and other international airlines that fly to Manila.

It also provides technical ground handling services to Air Niugini, China Airlines, Egypt Air, Eva Air, KLM Royal Dutch, Korean Air, Malaysia Airlines, Silk Air and Cathay Pacific Airways.

MacroAsia however, reported a four percent drop in service revenues to P756.51 million from P784.65 million as charter flight revenues, fell 42 percent due mainly to the fact that last year was an election year and the company’s helicopter fleet had to undergo scheduled repairs and maintenance this year.

Revenues from ground handling services on the other hand, jumped 30 percent from last year’s level of P113.7 million as more airline clients were serviced this year.

Due to the rise in oil prices and government-mandated increase in direct labor cost, direct costs went up 10 percent while general and administrative expenses rose 11 percent principally due to higher salaries and wages, utilities and mining overhead expenses.

MacroAsia had some relief from foreign transactions this year as it booked a foreign exchange gain of P13.9 million as against foreign exchange losses of P6.6 million in 2007.

From P7.7 million last year, interest expense slid 48 percent due to lower loan balances and lower interest rates prevailing during the year.

As of end-September 2008, MacroAsia’s total assets improved three percent compared to its 2007 level due principally to considerable increases in cash and cash equivalents and receivables against a much lower increase in total liabilities.