MANILA, Philippines, November 14, 2019—Alliance Global Group, Inc. (AGI), the investment holding company of tycoon Dr. Andrew Tan, reported a net income of P19.3 billion in the first nine months of the year, registering a growth of 4% from the P18.7-billion level the year before.
Excluding non-recurring gains, core profit grew 9% to P19.1-billion from P17.6-billion the previous year.
Consolidated revenues increased remarkably by 17% to P127.0-billion from P108.8-billion during the same period last year, reflecting an accelerated growth pace from the first half.
Attributable net income stood at P12.8-billion, up 7% from last year’s P12.0-billion. Excluding non-recurring gains, core attributable profit grew 11% to P12.7-billion from P11.4-billion the previous year.
“We continue to work hard to deliver the strong performance across all our business segments,” says Kevin L. Tan, chief executive officer, AGI.
“We undertake product innovations, capacity expansions and even pursue digital transformations in order to further strengthen our diversified portfolio amidst this fast-changing market. We believe these deliberate strategies will soon bear fruit, allowing our Group to show accelerated growth in future earnings,” Tan adds.
For the third quarter alone, consolidated revenues soared 19% to P44.2-billion, amid strong contributions from all its key business units. 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).
Net income for the quarter climbed by 10% to P6.8-billion, with attributable profit higher at 12% to P4.7 billion than the previous year.
“We have operating leverage. We will continue to strive to achieve efficiencies so that when sales improve, this could translate to an even stronger Group performance,” explains Tan.
Megaworld, the country’s largest township developer, recorded attributable profit of P12.8-billion in the first nine months of the year, a 14% improvement from its year ago level of P11.2-billion. Consolidated revenues grew 17% to P48.1 billion as its core operating segments sustained their respective strong growth trajectories.
The combined leasing contributions from Megaworld Premier Offices and Megaworld Lifestyle Malls continued to show accelerated growth of 19% in rental revenues to P12.4-billion (26% of topline), coming on the back of adjustments in rents and increases in gross leasable space.
Development revenues also grew at annual clip of 11% to P30.7-billion, or 64% of group topline, coming largely from its projects in Uptown Bonifacio, McKinley West, and Westside City townships. During the same period, reservations sales reached P114-billion, underpinned by P58-billion worth of project launches.
Travellers International, owner and operator of Resorts World Manila (RWM), recorded a sharp 49% increase in consolidated net revenues to P16.4-billion from P10.9-billion. Gross gaming revenues shot up by 52% to P20.9-billion, boosted by the sustained recovery in the VIP segment, healthy growth in the mass business, improved hold rates and increased foot traffic to the RWM complex.
EBITDA for the nine-month period reached P4.1-billion, up 27% year-on-year, while attributable net income stood at P786-million.
AGI’s hotel business also continued to soar, with revenues growing at a stellar rate of 59% to P5.4-billion from P3.4-billion amid increases in hotel room capacities. The nine-month period saw incremental contributions from its recently-launched Hilton Manila Hotel and Sheraton Manila Hotel under Travellers International, as well as Twin Lakes Hotel, Hotel Lucky Chinatown, and Belmont Hotel Boracay under Megaworld Hotels. The newest addition to its growing hospitality business is the 547-room Savoy Hotel Mactan Newtown in Megaworld’s 30-hectare Mactan Newtown township in Lapu-Lapu City, Cebu. This brought the Group’s total hotel room count to over 6,100 keys to date.
Emperador, the world’s biggest brandy producer and owner of the world’s fifth largest Scotch whisky manufacturer, posted a healthy 11% improvement in consolidated revenues to P33.8-billion in the first nine months of the year from P30.6-billion the year before. Gross profit grew at the same 11% clip to P12.1-billion, keeping its gross profit margin stable at 37%. Attributable net income stood at P5.3-billion, up 3% from last year’s P5.1-billion.
The brandy segment registered a robust 13% growth in revenues to P24.1-billion, driven mainly by its popular premium brands Fundador and Tres Cepas, its flagship Emperador Brandy, and recently-expanded gin brand, The Bar. The whisky segment under Whyte and Mackay registered P9.3-billion in revenues, up 5% year-on-year, supported by its single malt brands led by The Dalmore and Jura, and its blended whisky Whyte&Mackay. This segment’s contribution would have been higher if not for the weak exchange rate of the British Pound (GBP) into Philippine Pesos (PhP).
GADC, which holds the exclusive franchise to operate restaurants in the Philippines under the “McDonald’s” brand, showed exciting results with attributable net income up by 18% to P1.2-billion. This came on the back of a sharp 14% jump in revenues to P23.- billion, helped in part by its strong same-store sales growth of 6% during the nine-month period versus 3.8% the year before.
GADC also continued to pursue its store expansion program, bringing its total store count to 652 by end-September, increasing from 620 stores in end-2018. Already, 106 of these McDonald’s stores are in the NXTGEN format.
AGI, meanwhile, also implemented another round of its share repurchase program of up to P2.5-billion, which will run for 12 months starting September 2019. Since the start of the new buyback program, about 84 million AGI shares have been bought back, amounting to around P950-million.