Alliance Global income down 50%; more diversified portfolio eyed

ALLIANCE Global Group, Inc. (AGI) said it generated P8.8 billion in net income to owners in 2020, around 50% lower than the P17.72 billion seen a year ago as the pandemic hit most of the conglomerate’s businesses.

“The pandemic really taught us so many lessons as a group and we see this as a perfect opportunity to strengthen our resolve to have a more diversified portfolio that could provide a balanced stream of earnings in a post-pandemic scenario,” AGI Chief Executive Officer Kevin L. Tan said in a statement on Monday.

The holding company also saw a 62% decline in net income to P10.3 billion from P27.1 billion a year ago.

Meanwhile, consolidated revenues amounted to P129 billion, 28% lower than its 2019 topline of P180 billion.

AGI noted that its core subsidiaries posted double-digit growth in the fourth quarter after the government eased lockdown restrictions for the holidays.

“Liquor sales of Emperador grew 42% during the fourth quarter compared to the previous quarter; sales of McDonald’s Philippines also jumped 36% quarter on quarter; gaming revenues of Resorts World Manila also grew 33%; and real estate sales of Megaworld was up 22% in the last quarter compared to the third quarter,” the company said without disclosing figures.

AGI property firm Megaworld Corp.’s net income declined by 45% to P9.9 billion last year, while the company’s consolidated revenues fell by 35% to P43.5 billion despite the boom in its office leasing business.

Megaworld reported in a separate disclosure on Monday that it was able to achieve a 100% occupancy rate in office spaces located within its 72-hectare Iloilo Business Park despite the pandemic, leading to rental revenues worth P10.4 billion in 2020.

The majority of its office spaces cater to business process outsourcing firms.

“This is now the brightest spot in our office leasing business, and we are very happy that our Iloilo township has been an attractive location to many multinational companies,” Megaworld Premier Offices First Vice-President Roland Tiongson said in a statement.

At the end of April, Megaworld had 100,000 square meters of total leasable office portfolio from its nine completed office towers, namely: One Techno Place, Two Techno Place, Three Techno Place, One Global Center, Festive Walk 1B, Richmonde Tower, One Fintech Place, and Two Fintech Place.

Megaworld is currently working on its 10th office development within the business park — 12-storey Enterprise One. 

Brandy and whisky producer Emperador, Inc. generated P8 billion in net attributable profit last year, 18% higher than P6.7 billion from a year ago. Its EBITDA (earnings before interest, taxes, depreciation, and amortization) amounted to P11.6 billion for the year.

Meanwhile, Emperador’s consolidated revenues improved by two percent to P52.8 billion due to the strong international sales.

“Emperador performed exceptionally in its global liquor operations, particularly for its brandy and whisky products in Europe, Asia, North America, Latin America, and Africa, offsetting and overtaking the low domestic sales of liquor due to the liquor bans imposed during the quarantine,” AGI said.

Travellers International Hotel Group, Inc. finished the year with P425 million recorded in EBITDA despite the limited operations in Resorts World Manila due to pandemic restrictions.

Net gaming revenues for Travellers International amounted to P9.4 billion, while non-gaming revenues totaled P2.8 billion.

Golden Arches Development Corp. (GADC), which holds the exclusive franchise to operate the McDonald’s brand in the Philippines, generated P19.8 billion in sales despite the pandemic’s effects on store operations and customer traffic.

GADC also posted an EBITDA worth P32.2 billion, while its EBIT (earnings before interest and taxes) amounted to P316 million.

McDonald’s closed the year with 655 stores, down from 669 stores. Some 30 branches were closed down due to lease expirations and financial sustainability concerns, while 16 new stores were opened despite the pandemic.

AGI accelerated its digitalization strategy through investments in Megaworld subsidiary Agile Digital Ventures, Inc., while its business segments also focused on digital platforms to accompany operations.

“Innovation, especially on digital technology, will remain to be at the core of our various companies’ business operations. We will continue to use technology to give our group an added advantage as we embrace the new reality,” Mr. Tan said.

On Monday, stocks of AGI at the local bourse went up by 0.19% to close at P10.38 apiece. — Keren Concepcion G. Valmonte

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