Megawide sees earnings more than doubling on property boom

MANILA, Philippines - Buoyed by a booming property market, Megawide Construction Corp. said it expects its net earnings to reach as much as P800 million this year, or more than double what it earned in 2010.

Megawide chief investment strategist Oliver Tan said the company was initially targeting a net profit of P560 million by the end of the year but revised it upward to as much as P800 million due to the increase in the completion rate of major projects.

Tan said the company remains bullish on the property sector and expects to sustain its growth trajectory owing to a huge domestic order backlog.

To maximize its growth potential, Megawide is in discussions with two new prospective clients, which officials declined to name pending completion of negotiations.

Company officials hinted that one of these companies is publicly listed and among the country’s leading property firms.

They were quick to point out, however, that SM Development Corp., the residential construction arm of the Sy family’s SM Investments Corp., would remain as Megawide’s top client.

Megawide accounts for 70 percent of SMDC’s projects.

Aside from SMDC, Megawide’s clients include Belle Corp., Antel Group, Suyen Corp. (owner of Bench), Prince Jun Development Group, Bellevue Hotel Group, Keppelland Realty, Malate Bayview Development Group, Goldland Properties and Dynamic Realty.

Tan said the company would also bid for several high-rise residential and office buildings in Metro Manila, which it hopes to bag within the year. These anticipated new contracts will further boost Megawide’s income.

In addition, Tan said Megawide would also team up with a consortium to participate in biddings for selected infrastructure projects.

Megawide, 20 percent owned by retail tycoon Henry Sy, raised P2.3 billion from an initial public offering last year, proceeds of which will be used to build a P1-billion concrete manufacturing plant in Taytay, Rizal; acquire new machineries and equipment; and finance general working capital requirements.

Slated for completion in 2013, the Taytay plant will be the country’s biggest one-stop-shop pre-cast concrete facility that will serve the undertapped low to mid-rise housing market.

In the past three years, Megawide had booked P22.9 billion worth of construction contracts covering approximately 1.298 million square meters floor area, consisting of 22 high-rise and 15 medium-rise condominium projects in Metro Manila.