MANILA, Philippines – The coronavirus pandemic and Taal Volcano eruption sank the profits of Andrew Tan’s Alliance Global Group (AGI) in the 1st quarter of 2020 by 39%, but the holding company still sees opportunities in the coming months.
In a disclosure to the Philippine Stock Exchange on Tuesday, June 30, AGI reported a net income of P4 billion for the January-March period, lower than the P6.5 billion earned in the same quarter a year ago.
Revenues fell 7% to P38 billion from last year’s P41 billion, with all of AGI’s subsidiaries suffering declines.
Its property arm, Megaworld Corporation, recorded a 9% decline in net income to P3.5 billion.
Megaworld’s top line, however, was flat at P15.1 billion, with only rental income posting growth in the 1st quarter.
Travellers International, owner and operator of Resorts World Manila, suffered a net loss of P1 billion in the 1st quarter, reversing its P244-million profits a year ago.
Travellers International’s gross revenues declined by 19% to P6.9 billion, as gross gaming revenues fell to P5.6 billion due to the temporary halt in casino operations.
Emperador, AGI’s Scotch whisky manufacturer, recorded a 16% drop in profits to P1.5 billion during the 1st quarter. Revenues fell 3% to P10.7 billion.
Golden Arches Development Corporation (GADC), which holds the franchise of McDonald’s Philippines, saw its net income plummet by 72% to just P108 million in the 1st quarter. This is significantly lower than the P383 million it earned in the same period last year.
GADC’s revenues fell 9% to P6.8 billion, as store operations were disrupted both by the volcanic eruption and the coronavirus pandemic. (READ: McDonald’s releases P500M to support its employees)
McDonald’s Philippines president and chief executive officer Kenneth Yang said in a virtual press briefing on Tuesday that GADC now plans to open around 25 new stores this year, lower than the initial target of 50. The company currently has 668 restaurants nationwide, with around 90% of them open.
Despite headwinds, AGI chief executive officer Kevin Tan said their business model remains “sound and sustainable.”
“We view our decision to focus on township developments as the way of the future. Even our foray into the international market for our spirits business has allowed us to diversify our risks, even as this pandemic has global dimensions,” Tan said.
Tan added that the group’s digital transformation initiatives helped them adapt to the crisis.
“We see a silver lining to this crisis. Our new learnings and our ability to adapt to emerging trends should make our organization better equipped and even stronger beyond this crisis,” he said. – Rappler.com