AGI posts 6-month profit of P12.5B

ALLIANCE Global Group, Inc. (AGI), the investment holding company of billionaire Dr. Andrew Tan, registered first half 2019 net income of P12.5-billion, just almost the same level of P12.45-billion during the same period last year.

Consolidated revenues, however, soared 15% to P82.8-billion from P71.7-billion over the same period.  Attributable income grew 4% to P8.1-billion from last year’s P7.8-billion.

All of AGI’s major subsidiaries contributed to the robust topline growth.

These include its real estate development arm Megaworld Corporation, gaming and leisure operator Travellers International Hotel Group, Inc., liquor subsidiary Emperador Inc. and quick service restaurants (QSR) unit under Golden Arches Development Corporation (GADC).

“We believe the Group’s strong topline performance was achieved on the back of a highly favorable domestic economy which cushioned the impact of some challenges in the global market,” says Kevin L. Tan, chief executive officer, AGI.

“However, we note increasing cost pressures, some brought about by the very competitive environment, which have impacted on our margins. Despite this, we remain confident that the collective growth strategies we have put in place – largely through product and market diversification, international pursuits for our spirits business and our ongoing expansion projects – are sound and will soon bear fruit,” adds Tan.

AGI earlier announced a five-year CAPEX program from 2020-2024 amounting to P410-billion, apart from its P85-billion capital spending this year.

Megaworld, the country’s largest township developer, reported a 16% growth in attributable profit to P8.3-billion in the first half of 2019 from P7.2-billion the year before.

Consolidated revenues grew 18% to P31.7-billion coming on the back of the sharp increases in the contributions of its core operating segments.

Its residential segment delivered a healthy 11% year-on-year growth in revenues to P20.2-billion (or 63% of group topline),  underpinned by increased project completion across its various townships.   Reservations sales grew by 5% to P80-billion in the first half from P76-billion the year before, helped by project launches worth P39-billion for the same period.

Its leasing business – contributed by Megaworld Premier Offices and Megaworld Lifestyle Malls – reported a robust 20% jump in rental revenues to P8.1 billion (26% of total) amid its aggressive expansion in capacities, healthier rental adjustments and improvement in occupancy rates.

With the increasing contribution of its higher-margin rental segment, Megaworld’s EBITDA grew by 21% to P14-billion, bringing its overall EBITDA margin to 44% from 43% the year before.

Travellers International, owner and operator of Resorts World Manila (RWM), recorded a sharp 83% increase in EBITDA of P2.9-billion in the first half, as net revenues from its gaming and non-gaming operations soared by 45% to P13.6-billion. Attributable net income reached P845 million.

Gross gaming revenues rose 50% year-on-year, buoyed by the increasing contribution from the VIP segment and the continued strong improvement in volumes, which cushioned the slight decline in blended hold rate to 5.1% (from 5.3%).

Likewise, the Group’s combined hotel revenues (through Megaworld and Travellers) continued to post a robust 61% growth to P3.6-billion from P2.2-billion.  This was traced to increases in hotel room capacities with the recent launches of Hilton Manila Hotel, Sheraton Manila Hotel, Twin Lakes Hotel and Spa, and Hotel Lucky Chinatown. The Group’s hospitality business now has a total room count of 5,175 keys.

Emperador, the world’s biggest brandy producer and owner of the world’s fifth largest Scotch whisky manufacturer, reported a 10% expansion in consolidated revenues to P21.4-billion in the first half from P19.5-billion the year before.

Contributing over 70% of revenues, the brandy segment was driven mainly by its premium and most popular foreign brands Fundadorand Tres Cepas.  The whisky segment, under Whyte and Mackay, accounted for the balance and led by its single malt brands The Dalmore and Jura, as well as its fast-growing single malt brands, Tamnavulin and Fettercairn.

Amidst improving product mix, gross profit grew by 7% to P7.3-billion, bringing its gross profit margin to 35%.  Attributable net income stood at P3.3-billion, up 2% from last year’s P3.2 billion.

GADC, which holds the exclusive franchise to operate restaurants in the Philippines under the “McDonald’s” brand, registered a 14% year-on-year increase in sales revenues to P15.4-billion, supported by a healthy same-store sales growth of 5.5% and its ongoing new store additions.

GADC’s total number of stores stood at 642 by end-June, increasing from 620 stores in end-2018.  Already, 77 our McDonald’s stores are in the NXTGEN format.  Attributable net income amounted to P751-million, up 1% from P740-million the year before.