Megaworld Q3 net income rises 1.6% to P5.32B on higher rental and hotel revenues

Megaworld Corp. reported a 1.6% increase in attributable net income to P5.32 billion for the third quarter, driven by higher leasing and hotel revenues. Consolidated net income rose 8.1% to P6.31 billion, while consolidated revenues climbed 4.7% to P22.32 billion.

Megaworld Corp. reported a 1.6% increase in attributable net income to P5.32 billion for the third quarter ended September, from P5.23 billion a year earlier, supported by higher leasing and hotel revenues. In a quarterly financial disclosure to the Philippine Stock Exchange on Tuesday, the Andrew Tan-led property developer said its consolidated net income for the July-to-September period rose 8.1% to P6.31 billion from P5.84 billion in the same period last year. Consolidated revenues increased 4.7% to P22.32 billion from P21.33 billion.

Rental income climbed 9.5% to P6.03 billion from P5.51 billion, while hotel revenues grew 14.3% to P1.50 billion from P1.32 billion. Real estate sales increased 1.8% to P13.37 billion from P13.13 billion. Meanwhile, operating expenses rose 14.5% to P6.14 billion from P5.36 billion, while interest and other charges increased 15.9% to P2.04 billion from P1.76 billion. Tax expenses declined 34.7% to P723.7 million from P1.11 billion.

For the nine months ended September, Megaworld's attributable net income rose 2.1% to P16.26 billion from P15.93 billion a year earlier, supported by growth in recurring income and residential sales. Consolidated net income increased 6% to P19.01 billion from P17.93 billion, while consolidated revenues rose 3.3% to P66.53 billion from P64.41 billion. Hotel revenues grew 12.3% to P4.64 billion, supported by new hotel openings, domestic tourism, and increased meetings, incentives, conventions, and exhibitions activities. Mall rental revenues increased 8.5% to P5.54 billion, supported by higher tenant sales, occupancy, and foot traffic.

Megaworld said its mall portfolio recorded a 95% occupancy rate, while average daily tenant sales increased 10%. The company's malls also recorded nearly 36,000 square metres of new store openings during the nine-month period, covering food, fashion, and other retail businesses. Office rental revenues rose 6.5% to P11.87 billion, supported by rental rate increases, tenant renewals, and new leases in existing and newly completed developments. Megaworld said it had secured renewals for about 90% of office leases scheduled to expire in 2026 as of September. Among its new office tenants, BNP Paribas selected Uptown Eastgate in Uptown Bonifacio as the location of a delivery centre serving its global corporate and institutional banking business.

Real estate sales, the company's largest revenue contributor, edged up 0.9% to P40.59 billion from P40.24 billion a year earlier. Megaworld said residential pre-sales increased 9% to P96.6 billion in the first nine months, equivalent to 77.3% of its P125-billion full-year target. Provincial developments accounted for nearly half of total pre-sales during the period. “Our nine-month results demonstrate the strength of Megaworld's township model and the importance of prudent financial management in delivering growth amid property market and macroeconomic headwinds,” Megaworld President and Chief Executive Officer Lourdes T. Gutierrez-Alfonso said. “Financial discipline remains central to our strategy, balancing investments in our townships with the need to preserve liquidity and maintain a sound balance sheet. This approach gives us the flexibility to navigate near-term challenges while pursuing opportunities that create long-term value for our shareholders,” she added.

Megaworld is targeting a combined three million square metres of office and retail gross leasable area by 2030, comprising two million square metres of office space and one million square metres of retail space. At the local bourse on Tuesday, Megaworld shares fell four centavos, or 1.75%, to close at P2.25 apiece.