MANILA, Philippines – Megaworld Corporation saw its net income grow by 12% to P11.63 billion in 2016, after it was able to cash in on the rising rental demand in the Philippines.
The developer, owned by billionaire Andrew Tan, beefed up its portfolio of leasing projects within its townships.
"Megaworld achieved another milestone last year as we breached the P10-billion mark for our rental revenues. We have achieved our targets across the board as we have steadily grown and expanded our core businesses," Megaworld treasurer Francis Canuto told the Philippine Stock Exchange (PSE) on Wednesday, April 5.
Megaworld said in the disclosure that its consolidated revenues climbed 4% to P46.74 billion compared to the P44.81 billion it recorded in 2015. This was after its rental revenues went up by 15% to an all-time high of P10.01 billion in 2016 from P8.73 billion in 2015.
The company, however, did not provide in the disclosure its figures for real estate sales, which is also a major component. (READ: Alliance Global's 2020 goal: Be the largest PH hotel developer)
"Township development remains to be a key strength of our company and we have focused on strengthening the various components of our townships on top of our residential businesses, such as offices, malls, and commercial developments as well as hotels," Canuto said.
Megaworld said its "successful cost management programs" only led to a modest 2% growth in costs and expenses at P35.1 billion in 2016, from P34.4 billion in 2015.
Prudent spending for operation expenses led to only 5% growth, a remarkable improvement from 7% year-on-year growth in 2015, said the treasurer of the listed firm. (READ: Megaworld to build more malls, office buildings in PH)
"Last year, we became successful in introducing another concept in real estate development which we call the 'integrated lifestyle community.' This year, we hope to add more developments under this category as we activate some of our remaining raw lands across the country that have good potential for leisure and tourism," Canuto added.
Late last year, Megaworld introduced Eastland Heights, its first integrated lifestyle community, expanding 640 hectares on the mountains of Antipolo, Rizal. Earlier in 2016, the company also launched its 21st township called Maple Grove in General Trias, Cavite, spanning 140 hectares.
The company is also behind successful integrated urban townships across the country, including Eastwood City in Libis, Quezon City (18.5 hectares) and Newport City in Pasay City (25 hectares), among others.
Just last month, Megaworld raised a total of P12 billion from the issuance of fixed rate bonds, which will be used to fund 4 township projects.
Megaworld has earmarked P60 billion in capital expenditures for 2017, mainly to accelerate developments within its existing integrated township projects and to acquire more properties.
Up to 80% of the budget will be used to build new residential condominiums, office towers, commercial centers, and hotels, while the remaining 20% will be allocated for land acquisition and investment properties. – Rappler.com