Megaworld profit nearly doubles to P1.5B in Jan-Sept

Backed by the robust performance of all its residential and office building projects, Megaworld Corp. nearly doubled its net profit in the first nine months this year to P1.5 billion on a 62-percent increase in revenues to P6.4 billion.

Company officials said Megaworld’s gains were mainly driven by strong real estate sales of residential condominium projects in its large-scale developments such as McKinley Hill and Forbes Town Center in Fort Bonifacio, in Taguig and Eastwood City in Quezon City.

"Megaworld has been growing at a remarkably rapid pace, and we want it to sustain the same rapid pace of growth year after year for as long as we can," said Megaworld chairman and president Andrew Tan.

For next year, Tan said the company’s net profit may increase by no less than 50 percent should it complete its planned stock rights issue within the first quarter of 2007. "We look at it as an imperative measure that will empower us to take advantage of the increasingly favorable conditions and opportunities in the Philippine property market," Tan said.

The planned offering, which was approved by the company’s board, will involve 7.37 billion common shares to be sold at a 10 to 50 percent discount on Megaworld’s closing price on the date to be set after the Philippine Stock Exchange approves the listing application.

Shareholders as a record date yet to be set by the company may subscribe to one rights for every two common shares they hold. The record date will not be less than 15 trading days after the approval of the application.

The rights shares will come partly from the firm’s unissued authorized capital stock and its P10-billion increase in capitalization.

Megaworld’s share price has risen by 98.33 percent since the start of the year, reflecting the strong investor confidence in the company’s stock.

Tan said proceeds from the offering will be used to fund the development of the hotel, retail and office components of Cityplace in Manila’s Chinatown; the continued expansion of its business process outsourcing office space in Eastwood, Libis; landbanking activities; and for additional working capital requirements.

Tan views the stock rights offer as an "opportune undertaking that will help Megaworld to maintain a leadership position in two robust segments of the property market: residential condominium and business process outsourcing."

He cited the home financing market as an exciting sector "about to take off" that makes home ownership affordable for many first-time buyers. Megaworld has entered into an agreement with Security Bank for a home financing facility to be made available to its clients at terms of up to 25 years. "The facility will make home ownership affordable for many first-time buyers and is expected to generate more sales for the company," Megaworld said.