Alliance Global Group Inc. grew first-quarter attributable profit by 5 percent to P5.2 billion as Andrew Tan’s conglomerate leaned on property, tourism and liquor businesses to offset weakness in high-end gaming.
The results also reflected the absence of one-off gains and the deconsolidation of Golden Arches Development Corp., owner of McDonald’s fast food outlets nationwide.
Consolidated revenues edged up 1 percent to P42.2 billion while normalized net income rose 6 percent to P7.8 billion.
Management’s view
“AGI had an optimistic start; first-quarter results reflected healthy residential sales, strong leasing revenues, sustained improvement in the hospitality business, and the nascent recovery in spirits sales,” AGI president and CEO Kevin Tan said in a statement on Thursday.
“These businesses continued to perform well even against a demanding macroeconomic and geopolitical backdrop,” he added.
AGI shares last traded at P8.65 apiece and have shed about 4 percent since the start of the year.
Megaworld drives earnings
Megaworld continued to deliver the biggest share of profits after attributable earnings rose 4 percent to P5.3 billion, supported by stronger hotels, malls and office leasing operations.
Hotel revenues climbed 8 percent to P1.5 billion while mall revenues rose 9 percent as occupancy improved to 95 percent and consumer traffic inside its townships strengthened.
Real estate sales also improved 15 percent quarter-on-quarter to P13.3 billion as construction progress accelerated, particularly in Metro Manila projects.
Tourism cushions gaming weakness
Travellers International, operator of Newport World Resorts, saw first-quarter net revenues fall 9 percent to P7 billion as weakness in VIP gaming continued to pressure performance.
Net gaming revenues dropped 15 percent to P5 billion, although the resilient mass-market segment helped cushion the decline.
Non-gaming revenues rose 10 percent to P2 billion, supported by stronger hotel occupancy, food and beverage sales, retail spending and entertainment operations inside the integrated resort complex.
To defend profitability, the company tightened spending aggressively, cutting promotional expenses by 23 percent and operating costs by 6 percent.
Cost discipline holds line
Emperador added support after attributable earnings rose 4 percent to P1.9 billion, helped by improving whisky sales, stronger brandy demand and tighter cost controls despite a soft liquor market.
“Our first quarter performance is supported by ongoing cost discipline, embedded in our operations,” Tan said.
“This allowed our Group to gain operating leverage, while we continue to implement our aggressive business strategies. Overall, we have maintained our financial prudence, which helps us stay on course even in this challenging environment,” he added.
—Edited by Miguel R. Camus
