Rising to the Challenge

By Andrew Tan

Chairman, Megaworld Corp. 

Megaworld has shown resilience and stability as an organization amid the most serious global
crisis in the 21st century. We steadily faced the difficulties of 2020, banking on our experiences
overcoming past crises. Despite the challenging year where we saw our revenues drop, we
remained profitable, and registered a net income of PhP10.6 billion. Our balance sheet
remained healthy—we were in a position where we were able to minimize the impacts of the
COVID-19 pandemic.

We practiced financial prudence by managing our balance sheet and minimizing our costs. We
reduced our capital spending by deferring some projects and streamlining our operations. In
addition, we took advantage of favorable rates in the offshore bond market. We were able to
secure a seven-year US$350 million-worth bond offering which put us in a good position to
weather the current business environment, as well as support our future land banking and
project expansion plans. Furthermore, our business segments evolved and innovated swiftly in
line with changing consumer requirements and preferences. This allowed us to generate
positive cash flows throughout the year.

With its track record of success, the Company geared up to start 2020 strong. However, the
year took an unexpected turn, starting with the Taal eruption in January, followed by the onset
of the pandemic shortly after. We saw the potential adverse impact of the pandemic, and we
decided to move quickly to prioritize our employees’ well-being. We focused on preserving jobs,
immediately shifting our non-essential staff to a work-from-home arrangement, and assigning
essential personnel to work in locations near their homes.

During a time when health and safety became critically significant, our real estate
developments, particularly our pioneering townships, once again demonstrated their
sustainability. Strict health protocols in our townships allowed us to prevent any major
outbreaks. And, because our townships are self-contained, we were able to cater to the
essential needs of our residents, tenant partners, and visitors. The Company’s efforts and
initiatives were received positively by our communities, who experienced firsthand the
sustained—if not improved—quality of life in a Megaworld township.

The year continued to affirm our strength as the country’s biggest office landlord, with
Megaworld Premier Offices proving to be a source of stability in a time of heightened
uncertainty. In addition, our Megaworld Lifestyle Malls continued to be a focal point in our
communities. The largest branches of Mary Grace, Wildflour and McDonald’s were opened in
our various townships, showcasing the confidence of our retail partners not only in our malls,
but also in the Company’s continued role as a catalyst for economic activity in the years to

The Company saw several development opportunities in 2020. We launched PhP7.8 billion
worth of residential projects outside Metro Manila to capture the strong demand for quality
projects in the provinces. We also supported the expansion activities of our tenant partners
outside Metro Manila, as the attractiveness of the hub-and-spoke model for offices came to the
fore. Meanwhile, our in-city hotels continued to operate even during the height of the
pandemic as we provided quarantine and “work from hotel” services.

Megaworld’s vision of a digital future was highlighted by the establishment of its newest
subsidiary in 2020–, Agile Digital Ventures. This subsidiary expands the scope and scale of our
digital strategy. By spearheading investments in digital innovation and technology, we will be
able to further bolster our key businesses as well as support the food and beverage, retail and
hospitality industries.

Despite the challenging year, there were uplifting wins for Megaworld. We received a total of 76
awards from several award-giving bodies that recognized not only our developments and
cultural promotion campaigns, but also our COVID-19 response programs. We were also cited
for being the leading real estate development group in the country, as well as one of the dream
companies to work for in the real estate sector.

Notwithstanding the pandemic, we continue to actualize our sustainability commitments. The
“Zero Waste Lifestyle” movement was launched this January 2021, aiming to educate our
communities on the importance of proper waste segregation and management across all our
townships. Job security remains crucial during these unprecedented times. We focused on job
preservation to assure that our employees retain their positions with no pay cuts. We also
provided much-needed support for our tenants and retail partners through rent condonation
and financial assistance programs.

Megaworld looks forward to a better 2021. With the start of the country’s vaccination program,
we believe that it is only a matter of time before consumer confidence rebounds. Additionally,
the fundamental demand for decent housing remains high. We have numerous opportunities to
explore in our growth pipeline, and we are prepared to take them on. We foresee continued
robust demand for horizontal developments and leisure and tourism estates, as people look for
havens for rest and rejuvenation. Demand for warehouses and logistics hubs should also
increase, and we believe that our townships can easily cater to this need given their strategic

We are grateful for the support of our customers, tenant partners, investors, directors,
employees, and partner communities—they have always been vital to the Company’s success
over the years.

Our strong partnerships, complemented by our sound fundamentals, put us at an advantage in
capitalizing on opportunities that will arise once the country recovers. Megaworld is optimistic
about the future, and we look forward to continuing our work on upholding our vision to make
a meaningful and transformative impact for all our stakeholders.