Megaworld Corp. owner Kevin Tan said the company is in good financial health to weather the current downturn, noting its low debt load.
“Megaworld still has the lowest financial gearing among the major listed property companies. We ended 2019 with a net debt-to-equity ratio of 26%, even lower than its 2018 level of 31% as gross debts stood unchanged during the year.
This should give us more elbow room to lever up once the situation improves, likely by next year,” said Tan, chief strategy officer of Megaworld.
The ratio highlights the amount of debt a company is using to run its business and the financial leverage that is available to a company.
In 2019, Megaworld chalked up a net profit of P17.9 billion, representing a 22% increase from the year ago on robust revenues.
Consolidated revenues grew 17% to P67.3 billion on record lease income which rose 18% to P16.8 billion.
“Undoubtedly, our strongest rental business still comes from our leases of prime office spaces across the Philippines. This excludes the office spaces that we have already sold and are currently selling. The good news is that we still continue to see growth in the business process outsourcing (BPO) and information technology (IT) sectors, which comprise majority of our office rentals to date.
Also, I would like to point out the growth in the demand for office spaces outside of Metro Manila, in which we are in the best position to provide to space seekers because of our adequate office inventory in the provinces including those that are still in our pipeline,” said Tan.
Megaworld is continuously building more office towers, primarily to cater to the growing BPO sector, in Iloilo, Bacolod, Davao, Cebu, Cavite, Laguna, and Pampanga.
In Metro Manila, the company is building additional office developments in its various townships such as McKinley West and Uptown Bonifacio in Taguig, and Arcovia City in Pasig City.