Andrew Tan’s conglomerate sets aside P85-B
for capital spending this year
Alliance
Global Group, Inc. (AGI), the investment holding company of tycoon Dr. 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. The Group adopted
the accounting changes under Philippine Financial Reporting Standards (PFRS) 15
for its 2018 financial statements, which resulted to previous year’s
performance being restated for comparability.
Consolidated revenues in 2018 ended the
year at P160.7-billion, reflecting a sharp 14% increase from its year ago 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 are contributing strongly to the Group’s growth. We look forward to sustaining this momentum in
the coming years,” says Kevin L. Tan, chief executive officer, AGI.
The Alliance Global Group is composed of
its 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.
“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% of this year’s budget will fund the
healthy expansion projects of Megaworld and Travellers,” reveals Tan.
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%
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,” adds Tan.
Consolidated revenues grew at a robust rate
of 15% to P57.4-billion from P50.1-billion (restated) a year ago, driven by the
21% expansion in rental income and 11% increase in real estate sales.
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| Festive Walk Mall in Iloilo Business Park (Photo by Iloilo Business Park) |
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%
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% to P20-billion.
This was bolstered by a sharp 55% 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% year-on-year
to P4.7-billion, with hotel occupancy rates hitting an average of 79%. 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% clip from its year ago level
of P42.7-billion. EBITDA grew by 8% to
P10.3-billion while attributable net income rose by 5% 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 successes 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 4.0%.
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. ###
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