Posted on June 19, 2015 07:32:00 PM [ BusinessWorld Online ]
By Krista Angela M. Montealegre, Senior Reporter
MEGAWORLD CORP. sees sustained double-digit growth in earnings annually, its chairman said on Friday, as its township developments go on a tear.
“[W]e expect to achieve a double-digit growth net income growth every year on the back of a bigger and stronger township portfolio,” Megaworld Chairman and President Andrew L. Tan said during the company’s stockholders meeting in Quezon City on Friday.
Excluding non-recurring items, Megaworld’s core earnings grew 14% to P9.4 billion last year from P8.27 billion. Its performance reflects an 18% annual growth since 2009 when its net profit was at P4 billion, Mr. Tan said.
By the end of the year, the property firm will have 20 townships across the country with the rollout of five more townships this year.
So far, two new townships have been launched -- Northill Gateway and The Upper East, both in Negros Occidental. Two of the townships that are slated for launch are in Luzon, while the other one is in Mindanao.
Megaworld is bringing an average of 100,000 square meters of new office space every year to the market until 2019, higher than the average of 60,000 to 80,000 square meters the company launched annually in the last five years.
“Over the next 3-5 years, we are on track to bring half a billion square meters of office supply. The projects we are launching have been received very well prior to completion in the last years,” Megaworld Senior Vice President Jericho P. Go said.
Bulk of the new office space launches will be in Metro Manila and will be taken up by business process outsourcing companies, Mr. Go said.
On the residential side, reservation sales are projected to reach P90-95 billion this year, as much as 11.77% higher compared to the P85 billion in 2014, Megaworld Executive Director Kingson U. Sian said.
“We don’t feel there’s an oversupply at least not in the areas where we are operating,” Mr. Sian said.
“Our business model is it will be the preferred choice. We’re not just selling a condo selling an office space, we’re providing a lifestyle opportunity,” he said.
Megaworld is raising its rental income target this year to P9 billion from the P8 billion announced earlier, Mr. Sian said. However, the real estate firm kept its 2016 goal at P10 billion.
Megaworld is opening seven new malls and commercial centers, two office buildings and two new hotels this year that will add around 300,000 square meters of gross floor area in its overall rental portfolio.
Megaworld is setting aside P65 billion this year to finance the development of its residential, office and retail projects as well as some land banking initiatives. This forms part of its five-year capital expenditure program through 2019 of P285.8 billion.
Its shares were unchanged at P4.99 apiece on Friday.