MEGAWIDE Construction Corp. saw its earnings drop by a fifth in 2018 due to the slowdown in the construction industry.
In a disclosure to the stock exchange on Wednesday, the diversified engineering and infrastructure conglomerate said net income stood at P1.8 billion last year, 20% lower than the P2.25 billion it reported in 2017. The company noted how its bottomline was affected by the cyclicality in the construction business, but received a boost from its growing airport operations.
Consolidated revenues also fell 21% to P15.11 billion, versus the P19.16 billion it realized in 2017.
The construction segment accounted for bulk of Megawide’s revenues at 78% or P11.81 billion, marking a 29% decline year on year. The company attributed this slower performance to projects in different stages in the order book, some of which are either winding down or in the early phases of construction.
Net income from the construction business likewise declined by 30% to P763 million, accounting for only 42% of the company’s total net income.
Despite this, Megawide noted that the new contracts it secured in 2018 reached P29.5 billion, almost three times what it had in 2017. Order backlog reached P50.9 billion by the end of the year.
“We remain highly optimistic in our construction business, especially with such a robust order book which gives us visibility for the next two to three years,” Megawide Chairman and Chief Executive Officer Edgar B. Saavedra said in a statement.
Airport operations, meanwhile, grew 30% to P2.996 billion, contributing 20% to Megawide’s total revenues. It now accounts for bulk of the company’s net income at 52% or P940 million, although also lower by 16% year on year.
The company opened the Mactan Cebu International Airport (MCIA) Terminal 2 last year, which helped boost the gateway’s total passenger volume by 15% to 11.5 million passengers. International and domestic passengers grew 23% and 12%, respectively.
Megawide cited the addition of 12 new international routes and two new domestic routes operating out of MCIA during the period. It now serves 30 domestic and 20 international destinations with six local and 19 international airline partners.
“We continue to see the growth in both international and local travel as an opportunity to promote Cebu not only as a destination but as a hub to other destinations in Visayas and Mindanao,” Mr. Saavedra said.
“We intend to make the most of these prospects by embarking on new developments within the MCIA concession area to attract more traffic and complement our existing facilities.”
The company also noted that it expects the Parañaque Integrated Transport Exchange to start contributing to revenues this year, after opening in November last year. The terminal south of Metro Manila has increased its passenger count to at least 40,000 daily, from a daily foot traffic of less than 10,000 in December.
Shares in Megawide fell 6.43% or P1.45 to close at P21.10 each at the stock exchange on Wednesday. — Arra B. Francia