Megawide eyes new infrastructure segments

MANILA, Philippines — Megawide Construction Corp. plans to enter into new segments that will provide a strong, stable, and growing revenue stream in the long run.

Plans include a foray into horizontal infrastructure by participating in the government’s rail infrastructure projects to complement its order book from the private sector.

The company will issue up to P4 billion worth of bonds to finance general corporate purposes.

Philippine Rating Services Corp. (PhilRatings) has assigned an issue credit rating of PRS Aa with stable outlook to Megawide Construction Corp.’s bond issue.

Obligations rated PRS Aa are of high quality and are subject to very low credit risk. The obligor’s capacity to meet its financial commitment on the obligation is very strong.

A stable outlook, on the other hand, indicates that the rating is likely to be maintained or to remain unchanged in the next 12 months, PhilRatings said.

In assigning the ratings, the debt watcher took into consideration Megawide’s “solid experience in the construction industry, along with vertically integrated operations, that is seen to complement the government’s infrastructure projects through public-private partnership (PPP) and Build Build Build (BBB) programs as well as its notable expansion projects in recent years.”

It also noted Megawide’s relatively high debt level on a consolidated basis due to the capital-intensive nature of the project companies’ operations, “although leverage remains manageable on the parent level. “

The assigned rating also took into account the recovering economy amid declining COVID-19 cases and increasing vaccination rate.

Since 2008, Megawide completed over 85 projects, with a total contract value amounting to P142 billion as of the third quarter of 2021.

In the first quarter of the year, the company registered P4.16 billion in consolidated revenues, 12 percent higher than the same period last year.

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The article was originally published in PhilStar Global and written by Iris Gonzales.