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Corporate Write-up |
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The Chairman's Message written by JB Lazarte
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And now,
auspicious signs have made a comeback—the proverbial silver lining on the
country’s economic horizon. Among other indicators, international economic rating
agency Standard & Poor’s highly respected opinion that the Philippine economy has
risen from negative to stable is more than enough signal to remind us of the region’s
enormous market potential. On its part, Megaworld has remained active
in its continuing goal of increasing value for our various stakeholders, through good or
bad times. With this deep respect for continued organic growth and steadfast performance,
your company made big financial leaps during the 2001 fiscal year. Megaworld’s streamlined accounting
policy excluded the sales that did not reach the 25 percent collection requirement as of
December 31, 2001. Thus, despite almost selling out all the projects launched during the
past year, your company’s registered net income showed a 34 percent decrease, to P408
million from the previous year’s P617 million. However, Megaworld enjoyed a 72
percent increase in customers’ deposits, ballooning to P1.26 billion from P730
million in 2000, which serves as a more accurate reflection of your company’s
performance for the past year. As of end-2001, the value of our total
assets showed a 4.73 percent increase, to P23.8 billion from P22.7 billion in 2000. The
same is true for your company’s total equity, which stood at a high P15.2 billion
from the previous year’s P14.8 billion—a tenfold growth from P1.5 billion in
1994. One of our most promising sources of
revenue, also made a high mark—a dramatic 199 percent increase, to P130.5 million
from the 2000 level of P43.7 million, the bulk of which came from our anchor projects in
Eastwood City, such as the IBM Plaza, Citibank Square and City Walk. Megaworld has also maximized growth in many
aspects of its operations, such as further fine tuning our collection system. To
facilitate a more effective process of account servicing and monitoring, your
company’s Account Management Division has been split into two separate groups, each
tasked to concentrate on a specific set of clients. This strategic split-up ensures that
your company’s income-generating machine is well-oiled, securing a steady stream of
the company’s lifeblood, its finances. A String of Record Breakers During the year in review, Megaworld primed
its already formidable market dominance with a wealth of record-breaking accomplishments.
We continued to bank on the very lucrative market of young professionals and upscale
expatriates working in the Makati CBD with the launch of two elegant residential towers in
the highly dynamic Greenbelt area, the Greenbelt Radissons and Greenbelt Parkplace. Both
luxury residences spoil our clients with exquisite choices for living—unmistakable
virtues of every Megaworld project. And with your company’s reputation for quality
and flawless delivery, it was no wonder that the two projects were sold out in a matter of
a few weeks. Empire East, our energetic arm for the
middle market, also made great strides at ground level with new alliances forged and
exciting projects unveiled. Empire East and the government of the city of Manila
formalized an agreement in February 2002 for the development of U.N. Gardens, a
six-building, medium-rise residential project in Paco, Manila. Empire East targets to
complete U.N. Gardens in two years, which is estimated to cost P194 million. In the
high-growth sector of Pasig City, we have also begun preselling the first cluster of the
groundbreaking enclave Cambridge Town. While in the southern suburbs, unit owners are
happily moving in to the first completed homes at Laguna BelAir III. Your company also enjoyed a strong take up
of its projects and growing recurring revenues from its IT park, Eastwood City. Throughout
the past year, we have continued to expand Eastwood City’s leasable office spaces
with the developments of Technoplaza One (completed in December 2001), Eastwood Corporate
Plaza (topped off by June 2002), the International Centre for Information Technology
Education and the Eastwood Graduate School, as well as full completion of the three towers
of the luxury residence Olympic Heights. In June 2001, we launched One Orchard Road, an
extraordinarily vibrant residence that reflects the energy of its target clients of young
professionals. Shunning the morbidly prevalent crisis mentality, we even launched yet
another highly opulent Eastwood City residence in February 2002, The Grand Eastwood
Palazzo. With a relentless marketing campaign coupled
with its inherent commercial potential, the second half of 2001 saw the firm establishment
of the City Walk as the city’s trendiest entertainment and dining destination. With
an irresistible array of 30 restaurants and bars that boasts the most delectable
international and local cuisine, made more enticing with the choice of dining alfresco
under a festive ambience, the City Walk inevitably markets itself through the frenetic
word-of-mouth of its patrons. By the first quarter of 2002, a grand plan has been drawn up
for its expansion, dubbed the City Walk 2. Strategic Advantage Never resting on our laurels, Megaworld has
made solid alliances to secure substantial strategic advantage to enhance its already
dominant position in the industry of property development. During our visit to Singapore
in August 2001, we successfully inked an agreement with the Housing and Development
Board’s subsidiary Cesma to develop low-income housing in the Calabarzon region of
the Philippines—a deal so massive it entails the creation of 40,000 homes at the
estimated cost of P10 billion. Your company has also recently entered into
an agreement with the Rufino-Dupasquier Group’s Bonifacio West Development
Corporation to develop a 5-hectare site in the Bonifacio Global City. The project, named
Forbes Town Center, will include up to 50 residential towers as well as commercial
buildings, which together will require an investment of P16 billion. The project’s
first residential phase, called Forbeswood Heights, was launched on April 18, 2002 Colony Capital, one of America’s
foremost investors in real estate-related assets with a global strategic investment of
almost US$8 billion, together with Megaworld have agreed to set up an asset management
company that will invest in some of the non-performing loans and real estate assets of
local banks. With Colony Capital’s reputation as a leading asset management firm
worldwide and your company’s expertise in developing and selling world-class real
estate projects, this latest tie-up presents another exciting joint venture. Gearing for the Big Take-off While a period of global economic
uncertainty hardly seemed the best time to venture out into new investments, Megaworld
firmly believed in the untapped potential of the crisis—how it would actually serve
as our fulcrum to attain and secure the best segment of the market. Now with favorable
signs of an imminent improvement in the economic landscape, an increasingly upbeat
Megaworld is determined to move forward and increase shareholder value by
creating—instead of merely waiting for—opportunities. Megaworld’s international presence
continued to spread out with new marketing offices in USA, Singapore, Brunei and
Indonesia, as well as strengthening our established networks in high-yield countries such
as Japan and Australia. Your company has also stepped up the
development of its flagship project Eastwood City. Once completed, Eastwood City will take
flight as one of the company’s major sources of revenue, with an estimated annual
revenue stream of P600 million—as well as making its City Walk the country’s
trendiest and coolest total dining and entertainment center. As signs of economic rebound begin
materializing, Megaworld anticipates the white-knuckle future with exhilaration, fully
confident of our well-entrenched market position. Inspired by your unwavering trust and
buttressed by sound financial base, Megaworld’s new, dynamic ventures demonstrate in
stark relief your company’s capacity to take an active role in the industry that it
leads, ensuring a very rewarding future for all our stakeholders.
Copyright (c) 2004 by Joe Bert G. Lazarte
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