MANILA, Philippines — Infrastructure conglomerate Megawide Construction Corp. expects its real estate venture to bear fruit starting next year.
Megawide forayed into the real estate development scene with the P5.2 billion acquisition of PH1 World Developers Inc. last year.
“We expect the real estate business, our subsidiary, to start contributing next year. However, the substantial earnings will be felt by 2026. This is due to the fact that two of the ongoing constructions will be completed by 2026,” Megawide chairman and CEO Edgar Saavedra said during the company’s annual stockholders’ meeting.
Focused on the affordable housing segment to address the gaps in the Philippine housing market, PH1 is preparing for a potential initial public offering, which could happen as early as next year.
Last May, PH1 broke ground for a residential condominium project in Pasig as well as for a mid-rise condominium development in Imus, Cavite.
“For PH1, we need to complete the projects on time and on specification to quickly convert the P3.2 billion reservation sales into revenues. We will complement this with strategic project launches, preferably via asset light models to sustain revenue generation and increase market share while managing the balance sheets,” Saavedra said.
For Megawide’s construction business, Saavedra expects sustained improvements in the succeeding quarters after the segment’s strong showing in the first quarter.
During the first quarter, construction remained the biggest contributor to the company’s consolidated revenues at P4.9 billion, up 16 percent from the previous year.
The segment benefitted from increasing accomplishments of existing projects, particularly the Malolos Clark Railway Project, the Suncity West Side City Resorts Complex and Urban Deca developments.
“In the construction segment, we aim to deliver steady completion and stable revenues from our new and ongoing projects such as West Side City Resorts Malolos Clark Railway and Metro Manila Subway System,” Saavedra said.
Saavedra said Megawide wants to maintain an annual order book equivalent to two to three years worth of revenues, or between P40 billion and P45 billion, depending on the size and duration of projects.
In addition, Saavedra expressed Megawide’s interest in submitting bids for more infrastructure projects to be offered by the government.
“We have one submitted bid to the subway system projects, which is the CP (contract package) 105 submitted last four or five months ago. So we are expecting, based on the schedule, the bid to be opened by the third quarter. Hopefully, if we will be able to make it, this is an additional package for infrastructure for the company,” he said.
The CP 105 of the Metro Manila Subway Project connects Kalayaan in Makati with Bonifacio Global City in Taguig.
“For the long-term, we also expect for other infrastructure projects that will be bidded out. Other than the subway, even the Cavite-Bataan bridge will also be bidded out. Even the fourth bridge of Mactan. So all of these projects depending on the schedule of the government, if they will be bidding these out within the year, the group will be participating on this bid,” Saavedra said.
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