Property developer Megaworld Corp. said it reduced its 2020 capital spending by 40 percent as net income fell in the first quarter because of the coronavirus disease 2019 pandemic.
The country’s largest developer of integrated urban townships trimmed its capital expenditures for the year from P60 billion to P36 billion.
“During the past 31 years, we have witnessed and surpassed several crises that rocked our nation,” Megaworld chief strategy officer Kevin Tan said.
“Our company’s resilience has been tested over and over again. Our experience in overcoming the 1997 and 2008 financial crises; our strong financial position; and our continuing quest for creativity and innovation, put us in a favorable position to adapt to these new realities and take advantage of the opportunities that will arise once recovery starts,” he said.
Megaworld’s net income declined by 8 percent in the first quarter to P3.8 billion from P4.1 billion in the same period last year. Consolidated revenues rose 1 percent to P15.1 billion from P14.9 billion a year ago.
Around 64 percent of the company’s total revenues came from the company’s residential business, while 28 percent were from rentals and 4 percent from hotel operations. The rest came from the company’s non-core revenues.
Megaworld said it was ramping up its e-commerce facilities to fast track the recovery of commercial and hotel businesses which were greatly affected by the pandemic.
The company is set to roll out digital platforms in the coming weeks that are aimed at “enhancing customer experience” under the so-called “new reality”.
“Our e-commerce platforms will give our customers the convenience and comfort that they need as we take their safety and well-being to a whole new level. We will also do the same for our mall customers, which will also greatly help our retail tenants,” said Tan.
Revenues from Megaworld’s rental businesses, particularly from Megaworld Premier Offices and Megaworld Lifestyle Malls, grew 8 percent to P4.2 billion in the first quarter.
Rental revenues were driven by office leases as mall rentals weakened during the quarter on concerns over the pandemic.
Hotel revenues went down 4 percent to P551 million from P574 million as check-ins, particularly from international guests, dropped from a year earlier.
Residential sales increased by 1 percent to P9.6 billion.