Megawide returns to profit

MANILA, Philippines — Infrastructure builder Megawide Construction Corp. booked a profit of P3.58 billion in 2022, a reversal of the P342.99-million  losses it suffered in 2021.

Megawide succeeded in returning to profitability after recognizing P6.6-billion in one-time gains from the deconsolidation of a subsidiary, the GMR Megawide Cebu Airport Corp. (GMCAC).

In 2022 Megawide signed a P25-billion deal with Aboitiz InfraCapital Inc. (AIC) for the transfer of GMCAC’s ownership to AIC by 2024. A joint venture between Megawide and GMR Airports International BV, GMCAC holds the 25-year concession to build, operate and maintain MCIA.

Under the transaction, AIC will spend P9.5 billion to acquire primary and secondary shares from the joint venture to own a third of GMCAC. Afterward, the joint venture will issue to AIC P15.5 billion in exchangeable notes that will mature on Oct. 30, 2024.

When the notes mature, AIC will trade them for the remaining two-thirds stake in GMCAC.

Moving forward, Megawide plans to use the proceeds from the AIC deal to deliver big-ticket projects that it bagged from both public and private contractors.

As of 2022, the firm, owned by businessman Edgar Saavedra, manages an order book amounting to P50.8 billion, buoyed by the P17.75-billion contract to deliver the Ortigas and Shaw Boulevard segments of the Metro Manila Subway.

Megawide is also delivering additional packages for Westside City Resorts World of the Suncity Group. It is also finishing supply and build contracts of pre-cast materials for three new locations of PHirstPark Homes.

“The transaction involving the company’s airport subsidiary GMCAC proved very timely and it provided us with more flexibility to pursue our broader growth agenda. Specifically, it enabled us to ease our balance sheet by de-levering a portion of our bank debts and de-risk our assets from forecasted global economic slowdown and the Russian-Ukraine conflict,” Saavedra said.