Megawide on track to hit income target despite slower revenues

Rappler.com
Megawide on track to hit income target despite slower revenues
Megawide's net income for the 1st half of the year slowed down to P927 million from P985.36 million in the same period a year ago

MANILA, Philippines – Megawide Construction Corporation remains optimistic it can hit its target P2-billion net income in 2017 despite slower construction revenues in the first half of the year.

Megawide told the Philippine Stock Exchange that its net income for the 1st half of the year slowed down to P927 million, from P985.36 million registered in the same period a year ago.

“On a consolidated basis that includes the earnings contribution from Megawide’s airport operations business, the company should breach the P2 billion mark for full year net income,” Megawide president Edgar Saavedra said in a disclosure to the PSE.

Megawide said the construction order book backlog stands at P33.7 billion as of June 2017, providing earnings visibility for the next two years.

New contracts include the Edades Suites of Rockwell Land Corporation, BGC 5th Avenue Apartments of Fort Bonifacio Development Corporation, and the Delta Project and Next Gen Zen 3 Zenith Foods Plant Expansion under Zenith Foods Corporation.

PPP, Cebu airport

Megawide’s airport operations business remains strong with a double digit increase in passenger throughput and air traffic volume. (READ: Megawide consortium to propose cable cars to ease Cebu traffic)

As a result, airport revenues rose 15% to P550.9 million in the 1st half of 2017, compared to P480.87 million in the same period in 2016.

The airport operations business now accounts to 48% of the total business of the group. 

Saavedra said airport passenger traffic increased by 14% for the first 6 months of 2017, compared to the same period last year – 6% increase in domestic passenger traffic, and a 36% increase in international passenger traffic.

Air traffic volume already increased by 17% for domestic flights and 37% for international flights.

The construction of Mactan Cebu International Airport‘s new passenger Terminal 2 is in full swing and is expected to be completed on schedule in June 2018.

This will raise the airport’s capacity to 12.5 million passengers annually.

In 2017, the company said it was able to bring in 22 major international and domestic airlines serving 33 domestic and 16 international destinations. 

Apart from Cebu airport’s Terminal 2, Megawide is also scheduled to deliver in 2018 the Southwest Integrated Transport System (SWITS) Terminal, the country’s first intermodal hub. The SWITS facility is located in Paranaque City. 

These two PPP projects expect a boost in predictable recurring income over the medium to long term, based on their concession contracts. – Rappler.com

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