MANILA -- Diversified engineering and infrastructure conglomerate, Megawide Construction Corporation on Friday reported a 51.44-percent decline in net income during the first nine months of 2019 but was optimistic of strong earnings growth next year amid continued recovery in construction.
Megawide generated a net income of PHP835.16 million from January to September from PHP1.72 billion in the same period last year due to the expected increase in group-wide finance costs associated with new loans drawdowns for existing operations and expansion purposes, as well as the slower-than-expected conversion of construction revenues.
But consolidated revenues grew by 7 percent in nine months from PHP12.8 billion to PHP13.7 billion, with the construction segment contributing bulk at PHP10.5 billion.
In the third quarter alone, consolidated revenues accelerated to PHP5.5 billion from PHP4.6 billion.
“Admittedly our construction performance has been increasing but it's at the low-end of our forecast for the year. The upside is that it will give us more momentum for our construction business moving forward,” Megawide assistant vice president investor relations Rolando Bondoy said in a press briefing.
Edgar Saavedra, Megawide chairman and chief executive officer, is optimistic about a stronger rebound for construction business especially amid the government’s Build, Build, Build infrastructure program next year.
“Actually it (program) is a good opportunity for us kasi parang (because it seems a) rebirth ito of the Philippines. For the last three, four decades, walang (there were no) major infrastructure… So it’s only now that we are trying to catch up,” he said.
The company said new contracts continued to flow in as PHP14.6 billion worth of new projects have been secured.
Saavedra sees 2020 a stronger year due to catch up in construction revenues, normalizing airport operations, and full commercial potential of Parañaque Integrated Terminal Exchange (PITX).
“Construction ang pinakamalaking sipa (will be the biggest driver),” he added.“Finance costs are also expected to taper off with loan take-outs and possible refinancing at lower interest rates.”
Megawide is the private partner of the Philippine government for infrastructure projects such as the Mactan-Cebu International Airport (MCIA) and the PITX.
Saavedra said the company’s topline can easily grow by 35 percent to 50 percent next year.
“We also see our transport-oriented assets thriving in 2020, with airport operations reaping the benefits of our strategic marketing and route development initiatives and the continuous improvements in Cebu’s infrastructure, and land port commercial operations reaching full capacity,” he added. (PNA)
