AGI 1Q23 profit grows 33% to P7.1B
Alliance Global Group, Inc. (AGI) sustained its strong performance in the first quarter of 2023, recording a net profit of P7.1-billion, which reflects a sharp 33% growth from P5.4-billion the year before. This was achieved as consolidated revenues expanded by 34% to P50.3-billion from last year’s P37.5-billion as all its major business segments delivered creditable results.
Net income to owners increased by 20% to P4.7-billion from its year ago level of P3.9-billion.
“AGI is firing on all cylinders, with all our major business segments registering impressive growth in the first quarter of the year despite nagging concerns on inflation and ongoing global headwinds. Our businesses continued to take advantage of the resilient consumer demand and economic activity which provided the boost to our lifestyle malls, hotels, integrated resort operations, quick service restaurants, real estate sales and office rentals. Meanwhile, our international spirits business continued to benefit from the increasing popularity of our premium brands across the globe and the resurgence in travel retail,” says Kevin L. Tan, chief executive officer, AGI.
The Andrew Tan-led conglomerate has varied interests spanning real estate developments through property giant Megaworld Corporation; spirits manufacturing through Emperador Inc.; leisure, entertainment and hospitality through Travellers International Hotel Group, Inc.; quick service restaurants through Golden Arches Development Corporation (GADC), popularly known as McDonald’s Philippines; and infrastructure development through Infracorp.
“As a premium lifestyle conglomerate, we believe that our strength lies in our brands which we continue to improve and develop. Our agility and versatility allowed us to quickly adapt to the ever-changing demands of the market. With this, we maintain our optimistic view of our growth prospects moving forward,” continues Tan.
In the first quarter of 2023, Megaworld, the country’s leading township developer, recorded a 33% year-on-year improvement in attributable net income to P4.1-billion. This was driven by the notable improvements in all of its key business units, which brought its consolidated revenues higher by 24% to P16.2-billion. Its real estate sales grew at a robust rate of 17% to P9.4-billion on the back of higher project completion, while reservation sales surged by 71% to P39.6-billion. Rentals stood at P4.4bn, with sharper year-on-year rise in the contribution from mall revenues, which jumped by 73% amid pent up consumer spending. Meanwhile, its office segment grew by 5% as occupancy rate hovered 90%, much higher than industry experience. Hotel revenues also shot up by 62% to P813m with the rebound in tourism-related activities.
Emperador registered a robust 26% year-on-year growth in consolidated revenues to P15.6-billion, driven by the resurgence in domestic demand and improving global spirits sales, the latter also buoyed by renewed trade in travel retail. Its brandy segment chalked up a 28% year-on-year increase in revenues during the quarter, supported by improving on-trade sales and modest price adjustments. Its whisky business also continued to grow its sales sharply by 24% year-on-year due to growing popularity of its premium single malt brands in the global market, particularly in Asia and North America. This has also helped lift the group’s overall margins to 33% at the gross profit level, from 32% the year before. Attributable profit stood at P2.3-billion, a 10% improvement from year ago level.
GADC’s attributable profit in the first quarter this year rose by 62% year-on-year to P419-million as consolidated revenues expanded by 38% to P9.9-billion with the continued surge in discretionary spending. Gross profit also rose by 37%, despite pressures brought about by rising cost of inventories. GADC, led by its Chairman and Founder George Yang, is a long-term partnership with AGI and holds the exclusive franchise to operate restaurants in the Philippines under the ‘McDonald’s’ brand. The company ended the quarter with 703 McDonald’s stores nationwide.