MEGAWIDE Construction Corp. on Monday said it will be buying back P2 billion worth of shares from the stock exchange in the next two years.
In a disclosure to the stock exchange, the diversified engineering conglomerate said its board of directors approved the share buyback program as it believes the shares have been “grossly undervalued.”
“Amid the volatility in the stock market, the Company’s management and board believe it is an opportune time to repurchase its own shares, which have been grossly undervalued following the overall market weakness,” Megawide Chairman and Chief Executive Officer Edgar B. Saavedra was quoted as saying.
He noted the share buyback program is a “sign of confidence in the company’s long-term growth prospects and a means to enhance shareholder value.”
Shares in Megawide closed at P15.94 each on Monday, 2.84% or 44 centavos higher from the previous session. The company’s stocks recorded a 52-week high of P25 apiece, and a 52-week low of P15.30 each.
The Megawide board also approved the declaration of cash dividends, equivalent to 20% of the company’s net income in 2017, totalling P247 million or P0.12 each.
The cash dividends will be payable to shareholders on record as of Oct. 15, 2018, and payable on Nov. 12, 2018.
Meanwhile, the company is set to open the Parañaque Integrated Terminal Exchange (PITX) in the fourth quarter of 2018.
“This will be the country’s first landport, which will have numerous transport connections serving passengers from the southwest of Metro Manila while helping to address the worsening problem of traffic congestion,” Mr. Saavedra said.
He said the company will undertake new private sector engineering, procurement and construction (EPC) contracts in the fourth quarter.
“We have a strong balance sheet and robust cash generation to support these programs while sustaining its immediate and future capital expenditure plans,” Mr. Saavedra said.