Alliance Global Q1 net income attributable surge 52% on easing restrictions
Alliance Global [AGI 10.32 0.39%] [link], Andrew Tan’s conglomerate, posted Q1 net income to its owners of P3.9 billion, up 52% from the P2.6 billion it posted in Q1/21, but down 21% from the P4.9 billion it reported last quarter in Q4/21.
AGI said that it was able to deliver this result, despite the re-imposition of movement restrictions related to the Omicron variant, thanks to its “ diversified revenue streams, strong brand equity and optimized cost management.”
Revenues grew across all of AGI’s major business segments, led by Resorts World Manila (+29% y/y) and Megaworld [MEG 2.73 1.44%] (+28% y/y).
The most notable laggard was Emperador [EMP 18.48 0.22%], which only saw a 2.4% increase in revenues.
MB BOTTOM-LINE
I appreciate the depth and breadth of AGI’s quarterly reporting.
This group does not hide the ball from its investors, despite its complicated financials spread across wildly different industries (property development, gaming, liquor, and fast food).
It’s clear, based on the drop from Q4’s profitability, that AGI’s profitability is actually still quite sensitive to COVID-related movement restrictions.
Compared to the heavier lockdowns of Q1 last year, this year’s lighter Omicron restrictions allowed AGI to easily out-perform that artificially-low bar established in Q1/21, but lighter restrictions are still restrictions, and we can see how that plays out in the dip in earnings between Q4 (no Omicron) and Q1 (with Omicron).
The real x-factor for AGI will be how the incoming administration will handle lockdowns and movement restrictions.
Duterte proved to be quite willing to use these restrictions to achieve his policy goals, but the jury is still out (obviously) on how a Marcos Jr. administration will use this tool should there be any new variants that pop up and cause problems in the coming year. It’s just something to keep an eye on.
Generally, this report shows that AGI is very well-positioned for a recovery.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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