Megawide quadruples spending budget for 2015

MANILA, Philippines – Megawide Construction Corporation has more than tripled its capital spending budget in 2015 as it invests heavily in its airport business.

The company is looking at its full-year net income to be somewhere‎ between P1.3 billion ($28.81 million) and P1.5 billion ($33.25 million), 25% of which will come from the airport operation, Megawide chief financial officer (CFO) Oliver Tan said on the sidelines of Megawide’s annual stockholders’ meeting on Tuesday, June 30.

Megawide, which bagged its 5th public-private partnership (PPP) project in February, registered P887.16-million ($19.66 million) net income in 2014.

“We are looking at full-year top line revenue of P13 billion ($288.15 million) – that’s on a consolidated basis – of which 10% will be coming from the airport operation, and the 90% is still from our traditional construction,” Tan said.

Megawide recorded a P10.22 billion ($226.53 million) revenue in 2014, according to its filing with the Philippine Stock Exchange.

Almost quadrupled spending

Tan said Megawide’s capital spending budget will reach around P2 billion ($44.33 million) in 2015.

The proceeds will be mainly used to finance subsidiary GMR-Megawide Cebu Airport Corporation, its joint venture with Indian airport operator GMR Infrastructure Limited. GMR-Megawide bagged the P17.52-billion ($388.38 million) Mactan-Cebu International Airport Passenger Terminal Building project under the PPP scheme. (READ: Groundbreaking for Mactan-Cebu’s ‘resort airport’ on June 29)

This is almost 4 times last year’s capital spending of about P700 million ($15.51 million).

“We have roughly P8 billion ($177.31 million) in cash that is earmarked or ready to be deployed for various identified PPP projects,” Tan said.

“Any potential fundraising will highly depend on the number of PPP projects that we will be winning‎. But we don’t foresee any potential fundraising this year,” he added.

Eyes 4 more PPP deals

Megawide had won 5 of 10 awarded PPP deals since the Aquino administration launched its flagship project in 2010.

These projects are the first phase of the PPP for School Infrastructure Project (PSIP), PSIP’s second phase, modernization of the Philippine Orthopedic Center, Southwest Terminal of the Integrated Transport System, and the country’s first airport PPP project.

Megawide corporate information officer Manuel Louie Ferrer said the firm is interested in more PPP projects.

These include the South Terminal of the Integrated Transport System (ITS) project, Regional Prison Facilities, the New Centennial Water Source (NCWS) Kaliwa Dam Project, and P108.19 billion ($2.40 billion) worth of deals to develop, operate, and maintain of 5 regional airports.

Tan said that during the first quarter of 2015, Megawide’s earning had some “softness” mainly because of the seasonality of projects.

“There are more projects in the tail end and mobilization stage than projects in the structural and substructural work,” Tan explained. “But we believe that the new projects that we’ve booked last year [will] start to ramp up, most likely in the 3rd quarter of this year.” – Rappler.com

$1 = P45.12