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By Denise A. Valdez, Senior reporter
MEGAWIDE Construction Corp. is optimistic about building more transportation terminals and is willing to work with mall operators as it continues to rack up heavy foot traffic despite the coronavirus pandemic.
While traditional malls are suffering from fewer visitors due to the health crisis, Megawide said its land transportation terminals or “land ports” are performing relatively better in the current scenario.
Like airports, another business Megawide participates in, land ports are facilities that are primarily tailored to transportation needs, but leveled by integrating a formal ticketing system and commercial and retail establishments.
Megawide currently operates a land port, the Parañaque Integrated Terminal Exchange (PITX), which serves Calabarzon residents going to and from Metro Manila.
Since some parts of the country remain under stay-at-home protocols, between 56,000 and 57,000 passengers pass through PITX every day. This is just a 7% drop from the 60,000 daily passengers the facility used to register the pre-pandemic.
This could be a bright spot for retail and commercial operators who have seen a 30-50% drop in pedestrian traffic from shopping centers, according to third-quarter data from real estate consultancy Colliers International Philippines.
“What we are creating is really an infrastructure development … We can attract the traffic and work with the other developers, such as the operators of shopping centers,” said the president and CEO of Megawide, Edgar B. Saavedra, in a session virtual informative on Friday.
“Megawide’s core business, especially with this transportation-oriented development, is to manage traffic … But it needs other developments such as shopping malls, commercial, and sometimes residential developments and office developments, to support transportation facilities.” he added.
Megawide noted that unlike ordinary shopping centers, where bus bays and transportation terminals support commercial facilities, Megawide’s approach to business is the other way around.
“Even before (the pandemic) happened, we already had a lot of confidence in PITX’s business model, because unlike a traditional mall where there are a lot of people on weekends, at PITX it is on regular days,” said the Director of Megawide, Manuel Louie B. Ferrer said.
Megawide is currently planning a gradual expansion of PITX for 5,000 million pesos, which will be supported in part by the P4,360 million it obtained from a preferred stock offering last week.
The company is also looking to build more land ports across the country after half a dozen local government units (LGUs) have approached it for a similar project in their cities.
“In the Philippines, most of our cities do not have adequate transportation facilities, such as terminals. Traffic management is not designed properly. So a couple of LGUs approached us, ”Saavedra said.
In the nine months ended September, land port operations contributed P552 million to Megawide’s revenue, up 167% from a year ago, as its full operations began in the second half of 2019.
Megawide gets most of its revenue from construction contracts, which fell 30% to P7.41 billion in the nine months.
However, Mr. Saavedra said that the company’s order book is better than the pre-pandemic, as it is now between P45 billion and P46 billion compared to P44 billion in the first quarter. This does not yet include the P28 billion Malolos-Clark Rail Project that the company pocketed in September.
“A competitive advantage of Megawide, in addition to being particularly integrated, is that we also have internal capacity… We can build infrastructure, we can build vertical water treatment plants, we can build horizontal ones. All these technical projects, we can also carry them out, ”said Jez G. Dela Cruz, Head of Corporate Finance at Megawide.
Megawide shares on the stock market closed at P9.47 each on Friday, 21 cents or 2.27% less than in the last session.
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