ALLIANCE Global Group Inc. (AGI), the investment holding company of tycoon Andrew L. Tan, reported a banner year in 2018 with consolidated net income amounting to P23.7-billion from its restated profit of P22.3-billion in 2017.
Consolidated revenues in 2018 ended the year at P160.7 billion, reflecting a 14-percent increase from its yearago restated level of P141.3 billion.
“This is a milestone performance for AGI and proves that our aggressive expansion strategies which we started implementing across our various business segments about five years ago have begun to bear fruit. Now, all our major business segments arecontributing strongly to the Group’s growth. We look forward to sustaining this momentum in the coming years,” says Kevin L. Tan, chief executive officer of AGI.
The group adopted the accounting changes under Philippine Financial Reporting Standards (PFRS) 15 for its 2018 financial statements, which resulted in the previous year’s performance being restated for comparability.
The group is composed of real estate arm Megaworld Corporation, global liquor subsidiary Emperador Inc., gaming and leisure operations under Travellers International Hotel Group Inc., quick service restaurants business through McDonald’s Philippines under Golden Arches Development Corporation (GADC), and infrastructure arm Infracorp Development Inc.
For 2019, the group is allotting P85 billion for capital expenditures (capex), higher than the P70-billion expenditures in 2018.
“We remain unrelenting in our expansion plans as we view with optimism the country’s economic prospects despite some temporary challenges. We are allocating around P85 billion in capex this year, a significant increase from the P70 billion in actual expenditures in 2018. About 90 percent of this year’s budget will fund the healthy expansion projects of Megaworld and Travellers,” Tan said.
Megaworld, the country’s largest developer of integrated urban townships, posted another record year in 2018 as attributable net income reached P15.2 billion, reflecting an increase of 16 percent from a restated profit of P13.1 billion in 2017.
“We are very pleased with Megaworld’s performance, and will continue to buttress its position as the country’s leader in township developments, as well as its prime mover position in providing office spaces for the growing BPO sector,” Tan added.
Consolidated revenues grew at a robust rate of 15 percent to P57.4 billion from P50.1 billion (restated) a year ago, driven by the 21 percent expansion in rental income and 11 percent increase in real estate sales.
Rentals from its office buildings and Megaworld Lifestyle Malls reached P14.3 billion, amid its continued expansion in gross leasable area to 1.5-million square meters (sqm). Recent additions in rental spaces include its office buildings 10 West Campus in McKinley West and Eastwood Global Plaza in Eastwood City, as well as its Festive Walk Mall in Iloilo Business Park.
Real estate sales rose to P38.0 billion from P34.1 billion (restated) given increased project completions in McKinley Hill, McKinley West, Uptown Bonifacio, Westside City and Twin Lakes. Likewise, during the year, Megaworld registered an unprecedented level in sales reservations of P135 billion mainly from new project launches like Bayshore Residential Resort 2, Gentry Manor and Grand Westside Hotel, all located in Westside City, as well as Uptown Arts Residences located in Uptown Bonifacio.
Travellers International, owner and operator of Resorts World Manila (RWM), recorded an attributable net income of P1.4 billion, up sharply from P290 million a year before. Gross revenues from its gaming and non-gaming operations rose by 17 percent during the period to P24.7 billion while property visitation reached an average of 28,500 per day.
Gross gaming revenues (GGR) stepped up its pace, growing by 17 percent to P20 billion. This was bolstered by a sharp 55 percent improvement in VIP GGR, due in part to the opening of the ground floor gaming area at the Grand Wing. As the facility ramps up its operations, this is expected to further drive RWM’s prime gaming business moving forward.
Non-gaming revenues also went up by 17 percent year-on-year to P4.7 billion, with hotel occupancy rates hitting an average of 79 percent. The company’s international hotel portfolio gained another premium brand last year with the launch of the 357-room Hilton Manila Hotel. The Sheraton Hotel also soft-opened in January, adding another 391 rooms within the complex.
The combined hotel portfolio of Megaworld and Travellers now totals over 5,000 room keys, making AGI the biggest owner and operator of hotels in the country. A firm believer in the attractive potentials of the Philippine tourism sector, the group expects to add another 1,000 rooms this year. The near-term objective is to bring its total hotel room capacity to 12,000 keys in three to five years.
Emperador, the world’s biggest brandy producer and owner of the world’s fifth largest Scotch whisky manufacturer, also posted record revenues of P47.1 billion in 2018, growing at a 10 percent clip from its yearago level of P42.7 billion. Ebitda grew by eight percent to P10.3 billion while attributable net income rose by five percent to P6.7 billion.
Its international whisky operations under Whyte & Mackay remained the biggest driver to topline growth as its well-known brands The Dalmore, Jura, Tamnavulin and Shackleton continued to gain good traction in various markets around the world, particularly in Asia. Its premium brandy operations under Bodegas Fundador also enjoyed success in Europe and Asia with its iconic Fundador Brandy de Jerez and Fundador Supremo.
Emperador Brandy has maintained its lead in the domestic market despite the stiff competition. Late last year, the company also introduced The Bar Premium Gin which was warmly received by the market given its unique taste enhanced by botanicals.
GADC, which holds the exclusive franchise of McDonald’s in the Philippines, reported attributable net income of P1.6 billion in 2018 on sales revenues of P28.3 billion. Same-store sales growth reached four percent.
With its continued store expansion, GADC ended the year with a total store count of 620, compared to 566 stores in 2017. It also introduced its first 17 NXTGEN stores which have self-ordering kiosks, modernized menu boards and cashless payment modes. GADC targets to add another 60 NXTGEN stores this year, further raising the bar in bringing the McDonald’s world-class experience to consumers in the Philippines. (PR)