Analyst Briefing 1Q 2019 - Megaworld Corporation€¦ · Davao Park District One Lakeshore Drive...
Transcript of Analyst Briefing 1Q 2019 - Megaworld Corporation€¦ · Davao Park District One Lakeshore Drive...
Analyst Briefing1Q 2019
In PHP billions 1Q 2018 1Q 2019 %changeRevenues1 13.0 14.7 13.6%Real Estate Sales 8.5 9.5 11.1%Rental 3.4 3.9 16.5%Hotel 0.4 0.6 56.1%Other Revenues1 0.7 0.7 6.6%
Cost & Expenses 9.5 10.8 13.9%Residential 4.6 5.1 11.0%Hotel 0.2 0.3 62.1%Operating Expenses 2.4 2.9 22.6%Interest & Other Charges 1.2 1.0 -17.4%Tax Expense 1.1 1.4 34.0%
Operating Income1 5.0 5.8 16.4%Pre-tax Income1 4.5 5.3 17.6%Net Income1 3.5 3.9 12.6%
Attributable to Parent1 3.3 3.6 10.6%Minority Interest 0.2 0.3 48.9%
Operating Margin 38.3% 39.3% +100Net Income Margin 26.9% 26.7% -20
PERFORMANCE UPDATE
2
• Double-digit growth for all segments
• Rental growth in line with 2020 target
• Cost growth growing behind of topline growth
• D&A ↑17%, P525mn vs P612mn
1Excluding P189mn non-recurring gain
• Stable margins on EBIT and earnings
• Residential segment continues strong growth
• Unrealized FOREX losses ↓ 98%
• Steep growth trajectory for hotels
• Tax expense growth from new accounting treatment
In PHP billions 1Q 2018 1Q 2019 %change
Real Estate Sales 8.5 9.5 11.1%
Rental 3.4 3.9 16.5%
Hotel 0.4 0.6 56.1%
Non-Core1 0.7 0.7 6.6%
Total Revenues 13.0 14.7 15.0%
CONSOLIDATED REVENUE BREAKDOWN
• ESNEA ↑ 48%, IOI ↑33%
3
• Rental income growth pushes contribution
to 27% of revenues
• RES anchors revenues at 64% of total
64%66%68%69%73%72%71%70%72%75%
82%
27%25%24%23%19%
17%17%16%14%13%
11%
4%3%3%3%2%2%1%2%1%1%
1%5%6%5%6%6%
9%11%12%12%11%5%
1Q 20192018201720162015201420132012201120102009
Residental Revenues Rental Income Hotel Operations Non-core
• Fast-growing hotel segment
• Double-digit growth for all segments
1Excluding P189mn non-recurring gain
1Q 2019 PROJECT LAUNCHES
4
South Beach Place Westside CityP 7.9 billion | 7% sold
Sunny Coast Residential Resort Westside CityP 5.3 billion | 35% sold
The Albany - YorkshireMcKinley WestP 3.0 billion | 48% sold 5
1Q 2019 PROJECT LAUNCHES
Countrywoods Cluster 2 Twin LakesP 920 milllion | 54% sold
Two Regis The Upper EastP 1.6 billion23% sold
1Q 2018 PROJECT LAUNCHES
6
# Megaworld Corporation Township P 23.1 bn
1 South Beach Place Westside City P 7.9 bn
2Sunny Coast Residential
ResortWestside City P 5.3 bn
3 Two Regis Upper East P 1.6 bn
4 One Corporate Maple Grove P 1.5 bn
5 The Albany Yorkshire Mckinley West P 3.0 bn
6 Saint Mark Residences Mckinley Hill P 3.8 bn
Global-Estate Resorts, Inc. P 920 mn
7 Countrywoods Cluster 2 Twin Lakes P 920 mn
TOTAL P 24.0 bnOne Corporate PlaceMaple GroveP 1.5 billion | 29% sold
11.323.5
37.653.0
17.639.9
54.670.5
33.551.6
70.691.1
35.55.6
12.6
17.7
23.6
5.6
12.6
17.7
23.6
7.3
16.1
23.6
30.0
8.0
2.9
5.8
8.2
10.9
2.9
5.8
8.2
10.9
1.9
8.4
11.6
14.3
4.6
1Q 2016 1H 2016 9M 2016 2016 1Q 2017 1H 2017 9M 2017 2017 1Q 2018 1H 2018 9M 2018 2018 1Q 2019
MEG ELI & SPI GERI
SALES RESERVATIONS
7
• Group - ↑13%
• MEG - ↑6%
• ELI & SPI - ↑10%
• GERI - ↑139%
11.3 12.2 14.1 15.4 17.622.3
14.7 15.9
33.5
18.1 19.0 20.5
35.55.6 7.0 5.1 5.9
5.6
7.0
5.1 5.9
7.3
8.8 7.5 6.4
8.0
2.92.8 2.4
2.82.9
2.8
2.42.8
1.9
6.53.2 2.8
4.6
1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019
MEG ELI & SPI GERI
19.9
41.9
63.5
87.6
26.1
58.3
80.5
105.0
42.7
76.1
105.8
135.5
48.0
19.926.1
42.748.0
22.0 21.7 24.0
32.2
22.2 24.5
33.429.7 29.7
Cumulative
Quarterly
in PHP billions
in PHP billions
4.6 4.55.7
6.7
8.6
11.4
13.2 13.6
16.117.536.9%
34.4%36.1% 36.8%
40.5%
44.3%46.0% 44.9%
47.1% 46.0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Gross Profit Gross Profit Margin
STABLE OVERALL RESIDENTIAL MARGINS
In PHP billions 1Q 2018 1Q 2019 %Change
Real Estate Sales 8.5 9.5 11.1%
-Cost of Real Estate Sales 4.6 5.1 11.0%
Total Gross Profit 3.9 4.4 11.2%
Gross Profit Margin 46.0% 46.1% +10 bps8
in PHP billions
• High residential margin stable at current levels
• Double-digit growth
DIVERSIFIED REAL ESTATE SALES MIX
9
In PHP billions 1Q 2018 1Q 2019 %ChangeEstablished Areas 7.0 6.2 -11.1%Taguig 2.1 1.9 -12.0%Makati 1.3 0.7 -46.4%Laguna 0.4 0.7 73.9%Batangas 0.1 0.4 212.3%Iloilo 0.2 0.3 57.8%Cebu 0.3 0.2 -19.2%Others 2.5 1.9 -22.3%
Emerging Areas 1.6 3.3 109.8%Paranaque 0.9 2.3 169.4%Cavite 0.2 0.4 106.7%Bacolod 0.1 0.0 -66.8%Davao 0.1 0.1 8.3%Others 0.3 0.4 25.9%
Subsidiaries 8.5 9.5 11.1%Parent 5.7 6.4 11.9%GERI 1.2 1.2 4.9%ELI 1.1 1.1 5.0%SPI 0.5 0.7 27.8%
• 65% from establish areas providing stable base
• 35% from emerging areas providing boost in RES
• Including new townships such as Capital Town, Eastland Heights, and The Upper East
• Robust growth from Westside City and Maple Grove
• Strong growth on parent anchoring 68% of total RES
• MM ex-Westside City contributes 50% of total RES
• Robust growth in Luzon townships
1.1 1.1 1.1 1.2 1.3 1.3 1.4 1.5 1.5
1.8 1.8 1.8 1.8 2.1 2.1 2.2 2.3 2.4
1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 20190.2 0.2 0.2 0.6 0.7 0.9 0.2 0.32.7 2.9 3.6 4.0 4.6 5.5
1.3 1.5
3.3 4.15.1
6.07.3
8.7
2.1 2.4
2013 2014 2015 2016 2017 2018 1Q 2018 1Q 2019 2020
136 166 170 170 237 272 304 433368 432 509 621
737 8511,013
1,119
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
12.5
YoY
Rental portfolio (‘000 sqm)
7.3
1,123
9.0
20
791
2,022
Office Lifestyle Malls & Others Intersegment & Others
Office Lifestyle Malls & Others
CAGR 20%
10.6
974
17%6.2
GROWING RENTAL INCOME DRIVEN BY OFFICE & LIFESTYLE MALL LEASING
10
2.9 2.9 3.0 3.0 3.4 3.43.8
QoQ
in PHP billions in PHP billions
Office Lifestyle Malls & Others
1,3171,552
1,785
3.715.2
504 598 679
3.6 4.2
3.9
2019
Acrovia City One Paseo 23,100
Davao Park District Clocktower 1,300
Iloilo Business Park One Fintech Place 16,300
McKinley West One LeGrand Tower 48,300
Uptown Bonifacio World Commerce Place 103,500
Total GLA 192,500 sqm
2020Capital Town Pasudeco Tower 1 10,000
Iloilo Business Park Two Fintech Place 17,100
Uptown Bonifacio Worldwide Plaza 67,300
Westside City One Fintech Tower 21,600
Total GLA 116,000 sqm
2021Capital Town Pasudeco Tower 2 9,900
Capital Town Casa de Emperador 7,700
Iloilo Business Park IBP BPO 10 18,000
Iloilo Business Park IBP BPO 11 18,000
Mactan Newtown TMN BPO 6 10,000
The Upper East TUE BPO 1 10,000
The Upper East TUE BPO 2 10,000
Westside City Two Fintech Tower 28,000
Total GLA 111,600 sqm
OFFICE PIPELINE
11
One LeGrand Tower (2019) World Commerce Place (2019)
Two Fintech Place (2020) One Fintech Tower (2020)
COMMERCIAL PIPELINE2019
Alabang West Alabang West Retail 1
Arcovia City One Paseo
Arcovia City The View Deck
Boracay Newcoast Boracay Belmont
Davao Park District Clock Tower
Davao Park District Davao Finance Center
Eastwood City Eastwood Global Plaza
Eastwood City One Eastwood Tower 2
Iloilo Business Park Festive Walk Parade 1B
Iloilo Business Park One Madison Tower 1 and 2
Makati Greenbelt Hamilton 2
Makati Salcedo Skysuites
McKinley Hill Venice Grand Canal Mall Area 7
McKinley West Le Grand Park
Uptown Bonifacio Uptown Parksuites
Uptown Bonifacio Uptown Ritz
Uptown Bonifacio World Commerce Place
Westside City Bayshore 1
Total GLA 40,600 sqm 12
Clock Tower (2019)
Uptown Parksuites (2019)
COMMERCIAL PIPELINE
13
2020
Boracay Newcoast Boracay Beachfront
Boracay Newcoast Boracay Arrival
Davao Park District Art Deco
Davao Park District Colonnade
Highland City Skymall
Iloilo Business Park One Fintech Place
Iloilo Business Park Two Fintech Place
Mactan Newtown Mactan Newtown Beach
Maple Grove The Greenhouse
McKinley West One Le Grand Tower
Northill Gateway The Ruins
Westside City Sunset Boulevard & One Fintech
Total GLA 120,500 sqm
2021Boracay Newcoast Boracay Chancellor
Capital Town Sugarmill Mall
Davao Park District One Lakeshore Drive
Makati San Antonio Residences
Shaw The Pad
The Upper East Upper East Cinemax Mall
Total GLA 51,600 sqm
The Ruins (2020)
The Greenhouse (2020)
GROWING RENTAL INCOME – HIGH MARGIN BUSINESS
In PHP billions 1Q 2018 1Q 2019 %changeRevenuesRental 3.4 3.9 16.5%Intersegment Sales & Interest Income 0.2 0.3 22.9%
Rental Revenues 3.6 4.2 16.9%-Operating Expense 1.0 1.1 14.0%Rental Operating Income 2.6 3.1 18.0%+Interest Expense 0.1 0.1 -13.8%Rental EBIT 2.7 3.2 16.3%+Dep. & Amor. 0.4 0.5 21.3%Rental EBITDA 3.1 3.7 17.0%
Rental EBIT Margin 76.3% 75.9% -40 bpsRental EBITDA Margin 87.5% 87.6% +10 bps
• Strong expansion on EBIT and EBITDA
14
Current EBITDA MixRental53%
Hotel Operations2%
Current EBIT MixRental 50%
Hotel Operations1%Real Estate
49% Real Estate45%
• Rental revenues with intersegment sales up 17%
• High and stable margins
48.150.640.538.931.7
8.83.8
25.125.134.4
22.320.9
24.824.8
1Q 2019201820172016201520142013
Gross Debts Loans
$250,000,000 4.25% April 2013 2023
₽12,000,000,000 5.35% March 2017 2024
Bonds Date Issued MaturityCoupon Rate
in PHP billions
Bonds Loans
₽48,139,869,242 ~5.00% Various Various
Loans Year Issued MaturityAve. Rate
28.6 33.5
52.6
74.9
61.2
DEBT MATURITY PROFILE
15
75.7
Floating Rate20%
Fixed Rate80%
73.3
2013 2014 2015 2016 2017 2018 1Q 2019
Debt to Equity 28% 26% 39% 43% 46% 41% 38%
Net Debt to Equity Net Cash 7% 22% 31% 36% 31% 30%
in PHP billions
SOLID BALANCE SHEET
16
73.375.774.9
61.2
52.6
33.528.6
16.317.516.416.422.825.1
31.8
38%41%46%42%39%
26%28% 30%31%36%
31%
22%
7%
1Q 2019201820172016201520142013
Gross debt Cash and cash equivalents Debt to Equity Ratio Net Debt to Equity Ratio
13.0
49.344.746.250.2
5.94.22.8
4.3
1Q 2019FY 2018201720162015
2015PHP54.5B
2016PHP49.0B
2017PHP48.9B
2018PHP55.2B
2019PHP65B
5-YEAR CAPEX PLAN PHP285.8B UNTIL 2019
17
in PHP billions
54.549.0 48.9
Actual CAPEX
Land Acquisition Project Development
55.2
13.0
55%
25%
20%
Residential Investment Properties Land Acqusition
CAPEX Allocation
P36B
P16B
P13B
• Diversified township roster• 24 townships across the country• Growing contributions from outside MM
• High residential base• High blended GPM at ~46%
FY 2018 presales at P48bn (~P140bn 2019 guidance)FY 2018 launches at P24bn (~P105bn 2019 guidance)
• Growing high margin rental business• Rental EBIT margin at 75%• Rental EBITDA margin at 88%
2020 Rental Income Target: P20bn
KEY TAKEAWAYS
18