Megawide Construction Corp. said the construction business is expected to rebound strongly in 2020 as order book reached P52.2 billion as of September 2019.
Megawide chairman and chief executive Edgar Saavedra said the company secured P14.6 billion worth of new construction projects in the first nine months to boost total order book to P52.2 billion. The amount represents at least three years of construction revenues, he said.
Saavedra said for future projects, the company would focus strategically on securing longer gestation projects for the construction business to provide a more stable and visible revenue pipeline and manage the impact of the industry’s natural cyclicality.
“The continued recovery in construction this year will serve as a springboard for an even stronger performance next year, when we will embark on big-ticket, long-term projects that will provide better visibility and reduce the volatility for the company’s main revenue driver and business enabler. At the same time, we are also engaging in quick turnaround projects that will augment margins,” said Saavedra.
“We see this as a natural progression for our construction business as we lay the foundation for future years’ growth,” he said.
Saavedra said the company was interested in bidding for rail projects and sewer treatment plants for the water concessionaires of Metro Manila.
The consortium of Megawide, Hyundai Engineering & Construction Co. Ltd. and Dong-Ah Geological Engineering Company Ltd. recently submitted the best bid for Package 1 of the Malolos-Clark Railway Project.
“We also see our transport-oriented assets thriving in 2020, with airport operations reaping the benefits of our strategic marketing and route development initiatives and the continuous improvements in Cebu’s infrastructure and landport commercial operations reaching full capacity,” Saavedra said.
Megawide said attributable net income was halved to P649.72 million in the first nine months on higher finance costs. Revenues went up 7 percent to P13.69 billion.
Megawide assistant vice-president for investor relations Rolando Bondoy said the company might miss its year-end target for net income growth.
“Looking at the nine months performance versus the yearend compared to last year, we might fall short of our full year target,” Bondoy said.
Megawide earlier said net income would likely be flat this year at P1.89 billion because of the full-year deprecation of the Mactan-Cebu International Airport and higher interest expense recognition.