Financials
Results of Operations
(Based on Financial Statements adopted in accordance with the Philippine Financial Reporting Standards)
Review of September 30, 2023 versus September 30, 2022
Megaworld, the country's largest developer of integrated urban townships, posted a net income of Php 13.50 billion in the third quarter of 2023, up by 39.39% from Php 9.69 billion in the same period last year, boosted by double-digit revenue growth across all of its business segments. Net income attributable to the parent company stood at Php 12.02 billion.
The Group's consolidated revenues grew by 14.43% to Php 48.60 billion in the third quarter of 2023 from Php 42.47 billion in the same period last year.
Development. TThe bulk of Megaworld's consolidated revenues were derived from various product portfolios, with a significant 59.77% of total revenues arising from the sale of condominium units and commercial lots. Notably, real estate sales exhibited robust growth, with a year-on-year increase of 10.93%, reaching a total of Php 29.05 billion in the third quarter compared to the previous year's figure of Php 26.19 billion. This surge was largely attributed to increased construction activities throughout the year. A significant portion of the Group's registered sales was attributed to several key projects, including: Park Mckinley West, Grand Westside Hotel, One Eastwood Avenue Tower 2, San Antonio Residence, The Albany-Yorkshire, Uptown Ritz and Uptown Arts Residences, The Florence, 18 Avenue De Triomphe, Mactan Belmont Luxury Hotel, Eastwood Global Plaza Luxury Residence, Park Mckinley West-Tower C, Bayshore Residential Resort 2 Phase 2, Savoy Hotel Mactan Newtown, Uptown Parksuites Towers 1 & 2, Sunny Coast Residential Resort, Vion Tower, Belmont Hotel Iloilo, Gentry Manor, Golf Hill Gardens, Manhattan Plaza Tower 2, One Uptown Residence and Arden Botanical Village.
Leasing. The Group's rental businesses, consisting of office and lifestyle mall leasing, yielded an increase of 16.80%, reaching Php 13.29 billion in the third quarter of 2023 from the previous year's Php 11.38 billion, thereby contributing 27.35% of the total consolidated revenues.
Hotel Operations. The Group's revenues attributable to hotel operations posted a milestone growth of 50.60%, soared to Php 2.65 billion in the third quarter of 2023 compared to Php 1.76 billion from the same period last year.
Total costs and expenses amounted to Php 35.10 billion, an increase of 7.06% from Php 32.79 billion in the same period last year. Interest and other charges - net decreased by 28.26%, amounting to Php 4.32 billion this year from Php 6.02 billion in third quarter of 2022. Tax expense in 2023 amounting to Php 2.71 billion resulted in an increase of 14.57% from 2022 reported amount of Php 2.37 billion.
There were no seasonal aspects that had a material effect on the financial condition or financial performance of the Group. Neither were there any trends, events or uncertainties that have had or that are reasonably expected to have a material impact on net sales or revenues or income from continuing operations. The Group is not aware of events that will cause material change in the relationship between costs and revenues.
There are no significant elements of income or loss that did not arise from the Group's continuing operations.
Financial Condition
The Group maintains a prudent financial policy as it engages in a more competitive and challenging environment. The Group's Statements of Financial Position reflects stable financial growth. Total resources as at September 30, 2023 amounted to Php 433.36 billion, posting an increase of 5.90% compared to Php 409.21 billion as at December 31, 2022.
The Group shows steady liquid position as at September 30, 2023 as reflected in its current assets at Php 237.95 billion as against its current obligations at Php 77.42 billion. Current assets posted an increase of 6.08% from December 31, 2022 balance of Php 224.32 billion. Current obligations reflected an increase of 2.88% from December 31, 2022 balance of Php 75.25 billion.
Cash and cash equivalents decreased by 0.69% from Php 27.75 billion in 2022 to Php 27.56 billion as at September 30, 2023. Current and non-current trade and other receivables - net increased by 6.55%, amounting to Php 60.67 billion as at September 30, 2023 compared to Php 56.94 billion as at December 31, 2022. Contract assets increased by 25.70%, amounting to Php 24.66 billion as at September 30, 2023 compared to Php 19.62 billion as at December 31, 2022. Inventories increased by 6.50% from Php 123.45 billion in 2022 to Php 131.48 billion as at September 30, 2023. This includes raw land for residential development and property development cost reclassified due to adoption of PFRS 15 and PIC Q&As 2018-11, 2018-15 and 2018-12. Investment properties - net increased by 4.61% amounting to Php 134 billion in September 30, 2023 from Php 128.10 billion in December 31, 2022. This includes raw land and property development cost f or office and commercial development reclassified due to adoption of PIC Q&As 2018-11, 2018-15 and 2018-12.
Trade and other payables amounted to Php 25.31 billion and Php 24.16 billion as at September 30, 2023 and December 31, 2022, respectively, reflecting an increase of 4.78%. Contract liabilities decreased by 1.32%, amounting to Php 8.14 billion as at September 30, 2023 compared to Php 8.25 billion as at December 31, 2022. Total current and non-current customers' deposits as at September 30, 2023 amounted to Php 12.50 billion compared to Php 10.68 billion as at December 31, 2022 with 17.08% increase.
The interest-bearing loans and borrowings current and non-current amounted to Php 67.31 billion and Php 49.66 billion for September 30, 2023 and December 31, 2022, respectively, reflecting an increase of 35.54%. Bonds payable decreased by 30.21%, amounting to Php 31.57 billion as at September 30, 2023 compared to Php 45.24 billion as at December 31, 2022.
Total other liabilities amounted to Php 15.72 billion from Php 15.41 billion as at September 30, 2023 and December 31, 2022, respectively, translating to an increase of 2.01%.
Total Equity (including non-controlling interests) increased by 6.83% from Php 241.02 billion as at December 31, 2022 to Php 257.48 billion as at September 30, 2023.
The top five (5) key performance indicators of the Group are shown below:
| September 30, 2023 | December 31, 2022 | |
|---|---|---|
| Current Ratio *1 | 3.07:1.00 | 2.98:1.00 |
| Debt to Equity Ratio *2 | 0.38:1.00 | 0.39:1.00 |
| Net Debt to Equity Ratio *3 | 0.28:1.00 | 0.28:1.00 |
| September 30, 2023 | September 30, 2022 | |
|---|---|---|
| Return on Assets *4 | 3.20% | 2.39% |
| Return on Equity *5 | 5.54% | 4.15% |
*1 - Current Assets / Current Liabilities
*2 - Total Debt/ Equity (Total debt includes interest bearing loans and borrowings and bonds pqyable)
*3 - Net Debt/ Equity (Net debt is total debt less cash and cash equivalents)
*4 - Net Profit / Average Total Assets
*5 - Net Profit/ Average Equity (Computed usingfigures attributable onfy to parent compaf!Y shareholders)
With its strong financial position, the Group will continue investing in and pursuing expansion activities as it focuses on identifying new markets, maintaining established markets, and tapping business opportunities.
Material Changes in the Year 2023 Financial Statements (Increase/ decrease of 5% or more versus December 31, 2022) Statements of Financial Position
6.55% increase in trade and other receivables - net
Pertains mainly to receivables from sales and rental during the period
25.70% increase in contract assets
Represents excess of progress of work over the right to an amount of consideration
6.50% increase in inventories
Mainly includes residential condominium units for sale, raw land for residential development and property development cost
15.59% increase in prepayments and other assets-net Due to higher other current assets
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