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Alliance Global Group, Inc. (AGI), the investment holding company of billionaire Dr. Andrew Tan, chalked up a robust 16% increase in first quarter net income to P6.5 billion from P5.6 billion the year before. This was achieved as consolidated revenues rose by 19% to P41.0 billion from P34.4 billion over the same period.
Contributing strongly to the group’s remarkable results are its township development unit Megaworld Corporation, gaming and leisure operations under Travellers International Hotel Group, Inc., liquor subsidiary Emperador Inc. and quick service restaurants (QSR) business under Golden Arches Development Corporation (GADC).
“Our much-improved performance is a testament to our strong brand equity across all our business segments. We will continue to offer our premium products and excellent services to the market as we remain optimistic of the opportunities that lie ahead,” says AGI Chief Executive Officer Kevin L. Tan.
Attributable income stood at P4.4 billion, 21% higher than P3.6 billion a year before.
“We are mindful of the challenges in the external environment, but we will strive to work harder to sustain such good results,” adds Tan.
Megaworld, the country’s largest developer of integrated urban townships and market leader in the office segment, reported attributable net income of P3.8 billion in the first quarter, reflecting a 16% expansion from P3.3 billion the year before. Consolidated revenues went up by 15% to P14.9 billion, buoyed in part by the sustained 16% growthin rental income to P3.9 billion coming from its office spaces and the Megaworld Lifestyle Malls which continued to enjoy high occupancy rates.
Reservations sales in the first quarter reached P48 bllion from P42.7 billion the year before, helped by project launches worth P24 billion for the same period. We expect this to underpin the forward growth in real estate revenues which stood at P9.5 billion in the quarter, reflecting an improvement of 11% year-on-year.
Megaworld’s EBITDA grew by 19%, lifted further by the rising share of its higher-margin rentals which now account for 28% of total. Overall EBITDA margins improved to 44% from 42%.
Travellers International, owner and operator of Resorts World Manila (RWM), recorded a sharp 69% increase in EBITDA of P1.4 billion in the first quarter, as gross revenues from its gaming and non-gaming operations climbed 55% to P8.5 billion. Attributable net income reached P244 million.
Gross gaming revenues (GGR) rose 54% year-on-year and 10% quarter-on-quarter to P6.9 billion, boosted by the sharp 80% increase in volumes which cushioned the decline in blended hold rate to 4.9% (from 5.7%). Travellers’ VIP segment continued to enjoy a sequential improvement in GGR, which doubled on quarter-on-quarter and year-on-year basis as it ramps up the operations of its Grand Wing, which was soft launched last year.
Also worth noting is the 63% growth in the group’s hotel revenues to P1.8 billion from P1.1 billion. This is largely attributed to increases in the combined hotel room capacities of Travellers and Megaworld with the recent launches of Hilton Manila Hotel, Sheraton Manila Hotel, Twin Lakes Hotel and Spa, and Lucky Chinatown Hotel. The Group’s hospitality business now has a total room count of 5,175 keys.
Emperador, the world’s biggest brandy producer and owner of the world’s fifth largest Scotch whisky manufacturer, recorded consolidated revenues of P11 billion in the first quarter, up 13% from P9.7 billion the year before. Gross profit grew 10% to P3.7 billion with increasing contribution from its premium Scotch whisky and Spanish brandy products. Attributable net income stood at P1.7 billion, up 10% from last year’s P1.6 billion.
The whisky segment, under Whyte and Mackay, continues to enjoy strong sales driven by its single malt brands The Dalmore, Jura, Tamnavulin and Fettercairn, in addition to its blended whisky brands Whyte&Mackay and Shackleton.
Under the brandy segment, Fundador and Tres Cepas are now among the fastest-selling foreign brandies in the country. These brandy de Jerez products continue to define Emperador’s ongoing premiumisation strategy in the Philippine spirits market.
GADC, which holds the exclusive franchise to operate restaurants in the Philippines under the “McDonald’s” brand, reported a 13% year-on-year increase in sales revenues to P7.5 billion, supported by a healthy same-store sales growth of 4.8% and its ongoing new store additions. Attributable net income amounted to P383 million, up 16% from P329 million the year before.
GADC’s total number of stores have reached 633 by the end of the first quarter period, reflecting an additional one store per week from the 620 stores in end-2018. Currently, McDonald’s has 62 NXTGEN stores all over the country, with innovative features such as the self-ordering kiosks, modernized menu boards and card payment acceptance. GADC plans to roll out more NXTGEN stores this year, elevating customer experience to a whole new level of convenience that is truly world class.
“We always need to keep our products and services relevant amidst the changing times. That way, we promote our brand equity to keep our products and services at top of mind of our various publics,” Tan explains.