Friday, August 15, 2008 [ philstar.com ]
Alliance Global Group Inc. (AGGI), the listed investment holding firm of tycoon Andrew Tan, reported a 38-percent growth in consolidated net income in the first half this year, mainly driven by the continued strong performance of its property development arm Megaworld Corp.
In a financial report filed with securities regulators, AGGI said its net earnings reached P1.7 billion during the six-month period to June this year from P1.23 billion a year earlier as revenues expanded 11 percent to P14.04 billion.
The company said net earnings would have been higher were it not for the slowdown in its consumer-oriented businesses like food and beverage and quick-service restaurants (QSR).
Consolidated revenues amounted to P14.04 billion, up 11 percent from P12.6 billion last year. Out of the total, 47 percent came from the group’s real estate operations, followed by QSR (28 percent) and food and beverage (25 percent).
Megaworld’s net profit reached a record high of P1.79 billion, an increase of 23 percent from the year earlier level, due to the brisk take-up of its residential and business process outsourcing (BPO) office units. Total revenues comprising real estate sales, rental income, hotel income, interest income and other revenues rose 25 percent to P7.51 billion.
Total reservation sales for the first half of 2008 hit a record P13.43 billion, an increase of 29-percent from P10.45 billion a year earlier.
“We are within reach of another record-setting year as sales remain strong and resilient. Our continued success provides proof that we are on the right path of providing our clients with the most affordable, value-enhancing projects in the marketplace today,” said Tan.
Real estate sales contributed P5.28 billion, 30 percent higher than the previous year’s P4.05 billion.
With high occupancy rates in both the BPO office spaces and retail developments, property rental income jumped 42 percent to P645 million from P456 million a year ago.
The company’s beverage division under Emperador Distillers Inc. reported a 29 percent drop in net income on lower sales due to increased competition and inflation. Sales declined 15 percent.
On the other hand, sales of its food division, Pik-Nik, improved seven percent this year due to its penetration of new outlets/markets, with its domestic and international sales growing 11 percent and two percent, respectively, over last year. Pik-Nik even increased its prices in some areas/market towards the end of April.
AGGI’s QSR business, operated through subsidiary Golden Arches Development Corp., registered revenues of P3.98 billion, up nine percent from P3.64 billion a year ago, on the back of new store, openings. GARDC is the local franchise holder of global fastfood giant McDonald’s.
As of end-June this year, McDonald’s had a total of 278 stores nationwide compared with 264 a year ago. Out of the total, 172 are company-owned.
AGGI said while McDonalds experienced a modest increase in sales, net income will remain weak for the balance of the year due to rising costs.
AGGI has a consolidated cash position of P25.54 billion as of June 30, 2008, giving it more elbow room to expand its existing businesses and explore new opportunities to ensure long-term profitability.
It has finalized a joint venture with Star Cruises Ltd., a member of Malaysian conglomerate Genting Group, to build two large-scale projects in the Philippines with a total investment of $1.55 billion.
Tan also said he is confident Megaworld can meet its projected net income of P3.8 billion this year given strong investors’ confidence in its products.
Megaworld is simultaneously developing four BPO hubs, namely, Eastwood City in Quezon City; McKinley Hill in Fort Bonifacio, Taguig City; Newport City in Pasay City; and Cityplace in Binondo, Manila.
The company’s current inventory of about 229,000 square meters of BPO office space is expected to increase to 330,000 sqm. by end-2009. With its focus on expanding its rental income portfolio, Megaworld has grown its rental income, which includes rent coming from various retail developments, at an annual compounded rate of 40 percent since 2003.
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