MEGAWIDE Construction Corp. said its net income may grow between 12 percent and 14 percent for the year. However, revenues may only reach to a single-digit level as the firm grows its business and keep cost efficiencies high.
Megawide CFO Oliver Tan said the company already reached half of its target as of June. Its revenues, however, may only grow as much as 5 percent by the end of the year, from the current 5-percent slowdown as of the first half of the year compared with 2016.
Last year Megawide posted a profit of P1.9 billion, up 30 percent from the previous year. Revenues grew P17.7 billion, up 14 percent from the prior year.
“The margins are pretty stable, maintaining a 15-percent gross profit margin and 6-percent to 7-percent net-profit margins,” Tan said.
Megawide President Edgar Saavedra said if the company can close more infrastructure-related projects, like airport terminals, it can improve margins further by another 2 percent.
Saavedra said Megawide remains committed to its vision of becoming the country’s leading construction conglomerate.
“Our steady growth and upward trajectory reaffirm our core value of engineering excellence,” Saavedra said. “As we continue to venture into other businesses and pursue projects with a substantial socioeconomic impact, we remain committed to maintaining our solid financial position in the industry.”
He added Megawide is bullish on the continued expansion of its core construction business while eyeing many infrastructure opportunities, eyeing projects under the Duterte administration’s “Build, Build, Build” program and from private-sector initiatives.
“Engineering and construction are vital components in any infrastructure project,” Saavedra said. “We are in exploratory talks with specialty contractors for possible partnerships.”
Megawide is pushing for its unsolicited P209-billion proposal for the 50-year development of the Mactan-Cebu International Airport (MCIA), including plans for a second independent, parallel runway, under unit GMR-Megawide Cebu Airport Corp. (GMCAC).
The unit’s president, Louie Ferrer, said the existing runway in MCIA is good to handle up to 50 million passengers per year, though such number depends on how large the airport terminal can accommodate.
The MCIA’s Terminal 1 is only built for about 4.5 million passengers, but last year it already handled close to 9 million, while the figure will grow to 10 million this year.
Ferrer said such growth in the numbers will push them to accelerate the plan to build the next phase of the project, such as building the terminal 2.
“When GMCAC assumed MCIA a few years ago, the company was looking at an annual growth of 5 percent,” he said. “But the past three years already saw a 14-percent growth per year.”
Megawide is also looking to participate in the engineering, procurement and construction bid for Clark Airport later this year, followed by the operation and maintenance tender in the first quarter of 2018.
“Our experience in developing MCIA lends a distinct advantage because we can participate either as contractor or operator,” Saavedra said, adding that the company is also bidding for the regional airports of Davao, Bohol, Bacolod and Laguindingan.
During a regular meeting on Monday, Megawide’s board approved the amendment of the firm’s Articles of Incorporation to include engaging in allied construction businesses and engaging in acquiring shares in corporations under the secondary purpose.