Megawide sees flat growth in earnings

MANILA, Philippines — Listed engineering and infrastructure developer Megawide is looking at a flat consolidated net income of P1.89 billion this year.

In a press briefing Tuesday, Megawide officials said while the company expects a rebound in the construction business, the landport operations are seen to start contributing to growth only marginally this year.

Megawide chairman Edgar Saavedra said the construction business is seen rebounding from the cyclical downturn in 2018, coming from a peak in 2017.

“The airport segment is also expected to sustain its momentum, while landport operations are seen to start its contribution,” he said.

Saavedra said the company is on track to hit revenues of P3.56 billion. This is 10 percent higher than the previous year.

Megawide’s first quarter net income was down 49 percent to P239 million.

“We are expecting an upturn in 2019 especially in the construction business with the completion of new projects toward the second half of 2019. Megawide has also secured a healthy pipeline of new projects in the first quarter of 2019, amounting to P6.2 billion to sustain a healthy order book of projects moving forward.

Despite the optimistic outlook for 2019, however, Megaworld remains conservative in terms of net income,  noting that its Parañaque Integrated Terminal Exchange has yet to contribute to the total pie.

“Initial contributions from landport operations are also expected this year although still marginal but will become more significant  next year,” Saavedra said.

PITX has served approximately seven million passengers in the Greater Manila area through a total vehicular movement of 400,000 since its launch in November last year to the first quarter.

Moving forward, Saavedra said this new segment would even out the natural cyclicity in the construction business and help build a stronger and more stable portfolio for Megawide in the years to come.

Last year, Megawide reported a net income of P1.9 billion on revenues of P16 billion. Construction remained its core business, accounting for 79 percent while airport operations contributed 19 percent and  airport merchandising (two percent).