AGI profit down 39% to P4 B in Q1

MANILA, Philippines — Andrew Tan-led Alliance Global Group, Inc. (AGI) saw a huge 39 percent decline in first quarter profits to P4-billion due to the negative impact of  the Taal Volcano eruption in January and the coronavirus disease 2019 or COVID-19 pandemic.

Consolidated revenue likewise fell by seven percent to P38-billion in the first quarter.

Net income to owners stood at P3 billion, down 32 percent from a year ago level of P4.4-billion.

AGI chief executive officer Kevin Tan said the start of 2020 saw twin challenges for the company.

“These are changing the way we live and do business today,” Tan said.

AGI’s businesses are in real estate developments through property giant Megaworld Corp.; leisure, entertainment and hospitality through Travellers International Hotel Group Inc., spirits manufacturing through Emperador Inc., quick service restaurants through Golden Arches Development Corp. (GADC), popularly known as McDonald’s Philippines, and infrastructure developments through Infracorp.

However, Tan said that despite most businesses being affected by the health crisis, the situation reinforced the company’s belief that the business model is sound and sustainable.

“For instance, we view our decision to focus on township developments as the way of the future. Even our foray into the international market for our spirits business has allowed us to diversify our risks, even as this pandemic has global dimensions,” Tan said.

The company’s early digital transformation initiatives have also helped it adapt quickly to the fast-changing environment.

“As such, we see a silver lining to this crisis. Our new learnings and our ability to adapt to emerging trends should make our organization better equipped and even stronger beyond this crisis,” he said.

Megaworld posted a nine percent decline in attributable net income to P3.5-billion from P3.8-billion a year before, while Travellers International, owner and operator of Resorts World Manila (RWM), suffered a net loss of P1-billion in the first quarter, reversing its modest P244-million net income the year before.

Emperador likewise recorded a 16 percent year-on-year decline in attributable profit to P1.5-billion in the first quarter as GADC saw its attributable net income plunge by 72 percent to P108-million in the first quarter from P383-million the year before.