After being bludgeoned by the COVID-19 pandemic in 2020, Megawide Construction Corp. returned to profitability in the first quarter of this year as belt-tightening measures made up for slower revenues generated by the construction and infrastructure businesses.
Megawide booked an attributable net profit of P2.9 million in the first three months, much smaller than the P200.94-million net profit in the same period last year. Yet this marked a turnaround after three consecutive quarters of net losses that started in the second quarter of 2020, when local quarantine restrictions were first imposed.
It ended last year with a net loss of P398.15 million versus a prepandemic net profit of P859.49 million in 2019.
In the first quarter this year, revenues declined by 25 percent year-on-year to P3.72 billion as various businesses continued to grapple with the pandemic. However, direct costs decreased by 17 percent year-on-year to P3.09 billion while other operating expenses declined by 8 percent year-on-year to P385 million.
Overall, Megawide kept itself afloat by undertaking “aggressive cost rationalization and overhead management, resulting in lower operating expenses.” In terms of profit contribution, the turnaround was primarily driven by the construction segment, which delivered a net income of P168 million, 21 percent more than the same period in 2020. This segment generated revenues of P3.42 billion—accounting for 92 percent of total—but this declined by 10 percent year-on-year in the first quarter.
Megawide reported that its construction business had steadily increased capacity and accelerated project completion since the economy reopened in June last year. The company aims to capitalize on advanced precast technology and vertically integrated platform in construction, seen as a major catalyst for the country’s economic rebound. On the other hand, the airport business struggled with 10 percent of prepandemic air traffic volume although it remains optimistic of a turnaround.
