Megaworld Corp. on Thursday said its income in the first half fell by a third to P5.88 billion, from last year’s P8.86 billion, as the pandemic affected its operations nationwide and slashed its sales and rental income.
Revenues fell 25 percent to P23.79 billion, from last year’s P31.72 billion.
“Just as the pandemic began in the last month of the first quarter, we already anticipated a decline in our earnings in the second quarter, but what actually surprised us was the fact that the drop wasn’t as bad as we have expected it to be, and it remains manageable,” Kevin Andrew L. Tan, the company’s executive vice president, said.
“Our strategic decision of further strengthening our office leasing business way before the pandemic started is now evidently making us more resilient.”
The fall in income was felt in the second quarter when its profits were cut by more than half to P2.08 billion, from last year’s P4.75 billion. Revenues also fell at the same rate to P8.71 billion, from last year’s P16.81 billion.
Leasing revenues from its offices, which contribute 78 percent to its total rental income, was up 10 percent to P5.6 billion in the first half, from the previous year’s P5.1 billion.
Megaworld’s rental income for the first half declined by 11 percent at P7.2 billion, while hotel revenues were down 29 percent to P917.9 million from P1.3 billion.
This year, the company is set to complete construction of five new office developments in its various townships. These are in Iloilo Business Park in Iloilo City, Arcovia City in Pasig, Westside City in Parañaque, McKinley West and Uptown Bonifacio in Taguig. These will add around 213,000 square meters of completed projects in the company’s leasable office portfolio. To date, these projects are already 90 percent pre-leased on the average.
“Business process outsourcing [BPO] companies and traditional offices such as corporate headquarters of multinational companies still occupy around 90 percent of our spaces, which still continued their operations even at the height of the lockdown,” Tan said.
“We are closing some deals from many Metro Manila-based BPO companies that require an immediate expansion in our provincial townships due to eased quarantine rules there. Our current portfolio of active BPO tenant partners is still huge, and these are our first-line takers in our provincial developments.”
Megaworld is expected to end the year with 70 completed office developments covering 1.4 million square meters of leasable office inventory, excluding those that have already been sold.