MEGAWORLD Corp. said earnings grew at a double-digit pace in 2017, citing general growth across its residential, office, leisure, and hospitality segments.
“(It was a) very good year. Double digit growth to say the least,” Megaworld Senior Vice-President Kevin Andrew L. Tan told reporters last week when asked how the company performed in 2017.
Megaworld has yet to disclose its 2017 financial results.
The property firm of tycoon Andrew L. Tan is the country’s largest lessor of office spaces, ending the first nine months of last year with a total of 888,500 square meters (sq.m.). It had set a target to breach the one million sq.m. mark for its office space inventory by the end of 2017.
This segment was what drove the company’s net income 11% higher in the January to September period, allowing it to post an attributable profit of P9.98 billion. Rental income for the period climbed by 19% to P8.82 billion, contributing to its P37.1-billion consolidated revenues for the period.
Megaworld is currently beefing up its network of shopping malls to increase its contribution to recurring revenues by 2020. Mr. Tan said they will have a total of 28 malls at the end of this period, which will account for half of its P20-billion target for recurring revenues in 2020.
“At the very least one or two malls in every township. We have 23 townships so that’s at least 23 malls, plus a few more that’s stand alone,” said Mr. Tan, who also heads the company’s Lifestyle Malls division.
With a total of 15 malls already operational, the Megaworld executive said the segment currently accounts for around 40% of recurring income.
“The mall business, there’s a lot of players. It’s a very crowded industry so the challenge is really to create a point of differentiation… We look at our mall business as part of a business strategy, which is the township model,” Mr. Tan said.
Megaworld is the property arm of Alliance Global Group, Inc., which also has core interests in liquor, gaming, and quick service restaurants.
The company currently has 23 townships located across the Philippines. This includes the 640-hectare Eastland Heights in Antipolo, Rizal and the 35.6-hectare Capital Town in Pampanga where Megaworld will spend P30 billion in the next 10 years.
Shares in Megaworld were down by 10 centavos or 2% to finish at P4.90 apiece at the Philippine Stock Exchange last Friday. — Arra B. Francia