Megaworld reports flat income growth

MANILA, Philippines - Megaworld Corp., the flagship real estate unit of tycoon Andrew Tan, reported flat income growth at P1.02 billion in the first quarter this year as consolidated revenues fell six percent amid challenging business conditions.

“Operating against such tough economic constraints, Megaworld had a relatively good quarter, leveraging on the strengths of its business model and the underlying soundness of its basic core principles,” Tan said in a statement.

Revenues reached P4.38 billion during the period under review, P3.01 billion of which came from real estate sales or nine percent lower than the previous level of P3.31 billion.

The company registered sales from Belagio, Forbeswood Park Lane 1 & 2 and Eight Forbes Town in Fort Bonifacio; Eastwood Le Grand in Eastwood City; Mc-Kinley Hill and Morgan Suites in Taguig City; Manhattan Parkview in Quezon City; and Newport City in Pasay.

Rental income accounted for 11 percent of consolidated revenues, amounting to a record high P468.86 million, up 40.58 percent from P333.53 million the previous year-period. The growth was due to escalation and the completion of additional leasing property.

Megaworld’s hotel operations contributed P53.74 million, down 13.95 percent from the year earlier figure of P62.45 million.

Cost and expenses dropped 7.6 percent from P3.64 billion to P3.36 billion, mainly due to the non-consolidation of a previously consolidated subsidiary.

Megaworld, a pioneer in projects revolving around the live-work-play-learn concept, expects its net income to grow at a slower pace this year due to the global economic crisis. Net earnings are forecast to reach P4.02 billion, or 5.8 percent higher than the 2008 figure, while revenues are projected to hit P17.58 billion, the same as last year.

The company currently has about 275,000 square meters of BPO office space and expects to complete another 60,000 square meters by yearend. Its Eastwood and McKinley Hill BPO offices posted an average 96-percent occupancy rate in the first quarter of the year.

Last year, Megaworld reported a 25.1- percent jump in net profit due to robust sales and improving leasing operations.

Megaworld is developing 17 new residential projects with total projected revenues of around P26 billion. Most of the projects are located in the company’s five major township developments across Metro Manila.