MANILA, Philippines – Property giant Megaworld Corporation will be slashing capital expenditures (capex) for 2020 by 40%, as it saw its earnings drop by 9% amid the coronavirus pandemic.

Megaworld said in a regulatory filing on Monday, June 29, that its capex for the year will just be P36 billion from the original target of P60 billion.

Its net income attributable to parent company dropped to P3.5 billion in the 1st quarter of the year from the P3.8 billion during the same period last year.

“During the past 31 years, we have witnessed and surpassed several crises that rocked our nation. Our company’s resilience has been tested over and over again. Our experience in overcoming the 1997 and 2008 financial crises; our strong financial position; and our continuing quest for creativity and innovation, put us in a favorable position to adapt to these new realities and take advantage of the opportunities that will arise once recovery starts,” said Kevin Tan, Megaworld chief strategy officer.

While the company’s bottom line dropped, its revenues from rental businesses grew by 8% to P4.2 billion during the 1st quarter.

Rental revenues were driven by office leases, as mall rentals weakened due to the pandemic.

Hotel revenues inched up by 1% to P9.6 billion, amid the Taal Volcano eruption and coronavirus-related lockdowns.

Consolidated revenues slightly went up by 1% to P15.1 billion, with 64% of this coming from the company’s residential business, while 28% came from rentals and 4% were from hotel operations.

“Our real estate sales still helped mitigate the impact of the challenges we faced during the quarter. Our office portfolio, which remains very attractive to locators because they are mostly PEZA (Philippine Economic Zone Authority)-accredited, provided a buffer against the expected weakness of our mall and hotel operations,” Tan said.

“We keep an eye on effective strategies that will cushion the impact of these challenges for the rest of the year.” (READ: No-touch faucets, rapid tests: Big business adjusts to coronavirus) – Rappler.com