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edited April 2019 in Banking and Finance
Formerly MEGAWORLD (MEG) - Trader's Lounge Bluechips & Big Caps Section

Company Website : http://www.megaworldcorp.com

Chairman's Message
Megaworld Annual Report 2011

The year 2011 saw a modest expansion in the local economy as the country’s gross domestic product grew by 3.7%, compared to 7.6% growth in the previous year. The economy’s rather lethargic movement in 2011 was attributed to a relatively weak export sector as well as cautious government spending. Despite the country’s sluggishness in 2011, however, the resulting growth rate still fell within the government’s official projection of around 3.6% to 4% for the year.

One of the few bright spots in the country’s economy in 2011 was the Philippine real estate industry which experienced another landmark year. In fact, 2011 proved to be a much stronger year for the local property industry than the previous on, buoyed largely by the increased demand for business process outsourcing (BPO) office space and the continued vibrancy of the middle-income residential property market.

The spike in foreign investments in real estate during the year manifested an exponential increase in investor confidence resulting from a marked growth in private infrastructure initiatives. Indeed, extensive property development activities in 2011 continued to transform metropolitan areas into growing world class cities. Moreover, real estate development continued in nearby towns and cities such as Cavite, Laguna, and Batangas, slowly but surely shaping up to be supplementary economic growth areas.

In 2011, Megaworld outdid itself and turned in another sterling performance, riding the crest of an increased demand for your Company’s BPO office spaces and the continued strong sales performance of its integrated townships. During the year, consolidated net income amounted to P8.16 billion, a gain of 60.37% from the previous year’s net income of P5.09 billion.

Consolidated total revenues composed of real estate sales, rental income, hotel income, and other revenues grew by a substantial 39.35% from P20.54 billion the previous year to P28.63 billion, on the back of strong property sales and increased leasing income and nonrecurring gain from the sale of shares. Rental income contributed 13.37% to the consolidated revenue figure and amounted to P3.83 billion for 2011, 42.02% higher than the P2.70 billion in revenues the previous year. The growth in rental income, in turn, is attributed to the escalation and completion of additional leasing properties and increase in demand for BPO office space.

As the Philippines surges ahead in the global job outsourcing industry, more and more foreign investors set up shop in the country. These investors hope to take advantage of friendly foreign investment policies and low labor costs to establish voice and non-voice outsourcing operations here in the country.

We foresaw this development and started constructing office buildings optimized for BPO operations as early as a few years ago, even before the local BPO boom. I am proud to say that we are now reaping the fruits of this move of ours. Because of this, Megaworld has risen to become the leading BPO office space provider in the country with a total BPO office space inventory of 400,000 square meters as of end-2011, largest in the country.

To complement the success of our BPO office space development projects, our fully integrated mega-communities continue to attract buyers, owing to the success of our pioneering “live-work-play-learn-shop” development concept. We have always made sure that our integrated townships provide basically everything that residents need within the community. This has allowed our communities to stand out above the rest in terms of comfort, convenience and plenitude which, in turn, made them highly attractive to our market and caused them to perform excellently in sales.

Right now, Megaworld continues to proudly carry the distinction of being the largest middle-income residential property developer in the country. To ensure that we keep this distinction, we have launched, in 2011 alone, nine new residential projects, including 10-story Belmont Luxury Hotel in Newport City and the 8 Newtown Boulevard in Cebu City. We expect these new projects to be completed in two to four years.

The 8 Newtown Boulevard residential project is situated in a piece of prime property in Cebu that is part of our 25-hectare land bank in that province. All-in-all, Megaworld has set in place a land bank with a total of around 230 hectares in key growth areas, including 55 hectares of prime land in Iloilo, 25 hectares in Cebu, within Fort Bonifacio, it has 7.1 hectares of the former NAPOLCOM land near the international schools. And 8.5 hectares at the North Central Business District in North Bonifacio. These have a total land area of 2.29 million square meters, of which around one million square meters will be developed into residential areas and around 886,000 square meters will be allocated for office spaces. The remaining land will be used for retail and leisure development projects.

Moreover, plans are afoot to develop the huge 34.5-hectare Joint United States Military Advisory Group (Jusmag) property in Fort Bonifacio over the next 20 years. We intend to turn this property located behind Forbes Park into a mixed-use complex at an estimated cost of at least P22 billion. This piece of prime land brings to around 105 hectares our total development portfolio in Fort Bonifacio.

The year 2011 was another kind year for Megaworld, with our targets achieved and our plans accomplished. As we gear up for another year, we foresee both challenges and opportunities for us. Reports show that the residential, commercial and office segments of the local real estate industry have recently been showing significant growth both in the number of projects and in sales. If this continues on to 2012 and beyond, we should expect the Philippines to eventually become replete with bustling metropolitan areas with modern skylines and complete mega-communities.

As increasing income from a slowly stabilizing economy fuel growth in residential property sales and the continued influx of foreign investors establishing job outsourcing businesses here drives office space sales and rentals upwards, we continue to ensure that we are both ready and capable to grab opportunities and overcome challenges that will come our way and provide our market with the best projects we can offer.

Again, we thank our stockholders for their undying support all these years. We extend our appreciation as well to our management and staff for their commitment to our ideals and objectives. Without your help, we would not have been able to succeed not only in changing the Philippines landscape but improving it and bringing it up to par with global standards. More than anything else, without your support, we would not have been able to make our world grow in more ways than one.


  • DCL #3252: Megaworld use of proceeds in connection with detachable warrants (PSE - 04/19/2013)

    Total amount raised: Detachable warrants net of related expenses
    Projected Proceeds - 4,000,000,000
    Actual Proceeds - 3,744,866,711

    Disbursements: Projected Usage of Proceeds
    Development of BPO - 1,000,000,000
    Working Capital - 3,000,000,000
    Total - 4,000,000,000

    Actual Usage as of April 19, 2013
    Development of BPO - 831,975,740
    Working Capital - 1,931,994,230
    Total - 2,763,969,970
    Available funds - 980,896,741
  • Monthly Charts as of 26 April 2013
  • Monthly Charts as of 30 April 2013
  • Weekly Charts as of 2 May 2013
  • Monthly Charts as of 6 May 2013
  • DCL #3748: Megaworld use of proceeds in connection with detachable warrants (PSE - 05/07/2013)

    Total amount raised: Detachable warrants net of related expenses
    Projected Proceeds - 4,000,000,000
    Actual Proceeds - 3,747,639,211 Disbursements: Projected Usage of Proceeds
    Development of BPO - 1,000,000,000
    Working Capital - 3,000,000,000 Total - 4,000,000,000 Actual Usage as of May 7, 2013
    Development of BPO - 925,106,349
    Working Capital - 2,187,051,351 Total - 3,112,157,700 Available funds - 635,481,511
  • Monthly Charts as of 10 May 2013
  • MEG - At Its Highest
    Wednesday, May 15, 2013

    Megaworld Corporation (MEG), one of our favored stocks, steadily rose to its current level since it broke its trend January this year. The following uptrend was a turnaround from a rounding bottom chart pattern from 2011-2012. MEG successfully broke its 3.00 and 4.00 resistance levels, with the former being a key hurdle to break the rounding bottom. Looking at where it is right now, its gain may be a cause of concern as it happened too quick and too sharp.


    Valuation, considering Q1 2013 earnings growth of 15%, results to a PE of 14x, slightly higher than the previous years. But considering its profit result, a 15% growth is deemed decent since MEG usually records growth of slightly less than this. This valuation is in line with peers with the exception of ALI, SMPH, and RLC.

    So far, we noticed a resistance at 4.25 which is in line with its MACD Oscillator (both are encircled in blue). If it pushes past this level, we may see MEG test 4.80, the peak of its double top chart pattern formed in 2007. With this, we rate the stock a HOLD.
  • Monthly Charts as of 17 May 2013
  • Strong7PowerStrong7Power Member PEx Moderator
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