By Denise A. Valdez, Senior Reporter
MEGAWIDE Construction Corp. is bullish on building more transportation terminals and is open to working with mall operators as it continues to garner high foot traffic despite the coronavirus pandemic.
While traditional malls are suffering from fewer goers because of the health crisis, Megawide said its land transportation terminals or “landports” are performing relatively better in the current scenario.
Similar to airports — another business that Megawide is engaged in — landports are facilities that mainly cater to transportation needs, but are levelled up through the integration of a formal ticketing system and commercial and retail establishments.
Megawide currently operates one landport, the Paranaque Integrated Terminal Exchange (PITX), which caters to Calabarzon residents going to and from Metro Manila.
As parts of the country remain under stay-at-home protocols, about 56,000 to 57,000 passengers pass through PITX every day. This is only about a 7% dip from the 60,000 daily passengers the facility used to record pre-pandemic.
This could be a bright spot for retail and commercial operators that have suffered a 30% to 50% drop in mall foot traffic, based on third quarter data from property consultancy firm Colliers International Philippines.
“What we’re creating is really an infrastructure development… We can bring in the traffic and work with the other developers such as mall operators,” Megawide Chairman and CEO Edgar B. Saavedra said in a virtual briefing on Friday
“The core business of Megawide, especially with this transport oriented development, is you manage the traffic… But you need other developments such as malls, commercials, and sometimes residential developments and office developments, to support the transport facilities,” he added.
Megawide noted that unlike ordinary malls where bus bays and transport terminals come as support to the commercial facility, Megawide’s approach to the business is the other way around.
“Even before (the pandemic) happened, we were very confident already about the business model of PITX, because unlike a traditional mall where there’s a lot of people during weekends, in PITX it’s on regular days,” Megawide Director Manuel Louie B. Ferrer said.
Megawide is currently planning a P5-billion phased expansion of PITX, which will be partly supported by the P4.36 billion it raised from a preferred shares offering last week.
The company is also looking to build more landports across the country after having been approached by about half a dozen local government units (LGUs) for a similar project in their cities.
“You know in the Philippines, most of our cities don’t have proper transportation facilities like terminals. Traffic management is not properly designed. So we’ve been approached by a couple of LGUs,” Mr. Saavedra said.
In the nine months ended September, landport operations contributed P552 million to Megawide’s revenues, 167% higher from a year ago as its full operations started in the latter half of 2019.
Megawide gets the bulk of its revenues from construction contracts, which fell 30% to P7.41 billion in the nine months.
However, Mr. Saavedra said the company’s order book is better than pre-pandemic, as it now stands at P45 billion to P46 billion against the first quarter’s P44 billion. This does not include yet the P28-billion Malolos-Clark Railway Project that the company bagged in September.
“One competitive advantage of Megawide, apart from us being particularly integrated, is we also have in-house capability… We can do infrastructure, we can do vertical, we can do horizontal, water treatment plants. All these technical projects, we can also pursue,” Megawide Head of Corporate Finance Jez G. Dela Cruz said.
Shares in Megawide at the stock exchange closed at P9.47 each on Friday, down 21 centavos or 2.27% from the last session.