From a consolidated net income of P602.68 million in the first half of 2019, MacroAsia Corporation has swung to a consolidated net loss of P518.13 million in the first six months of this year.
“The first half loss reflects a reversal in profitability, the first time in so many years since 2013, as the group felt the impact of the COVID-19 pandemic in its aviation-related businesses,” the aviation support service provider said in a regulatory disclosure.
Service revenues declined 41.4% to P1.619 billion in the first half of 2020 from P2.762 billion in the same period in 2019.
Revenues from in-flight catering, which contributed 45% or P723.95 million of the total revenues, decreased 45% compared to P1.327 billion in the first six months of 2019. Meals sold totaled 3.22 million, down 43% from the 5.62 million meals sold year-on-year.
The food segment was constrained by quarantine measures and the drop in airline passenger traffic brought about by COVID-19 international travel restrictions, explained the company.
In March 2019, the segment’s capacity had even increased with the start of both MacroAsia SATS Inflight Services, which runs Philippine Airlines’ inflight kitchen, and MacroAsia SATS Food Industries, which has commercial operations outside the airport.
Meanwhile, revenues from ground-handling and aviation services, which accounted for 45% of the total, fell 41% to P725.99 million in 2020 from P1.241 billion in 2019. Flights handled declined 47% to 49,383 flights from 92,824 previously.
Contributing 9% to total revenue, water operations booked revenue of P139.76 million, a decrease of 17% from P168.38 million in the first half of last year, the loss attributable to the decline in commercial water sales in Boracay. While water businesses in other areas outside of Boracay grew significantly, it was not enough to offset the drop in billed volume in Boracay.
Administrative revenues from economic zone leases in the first half of 2020 did not change significantly from last year’s as rates charged were relatively stable.
Exploratory drilling revenue was P4.156 million, which is 74% higher than the P2.393 million earned in the first half of 2019.
The aviation training school, First Aviation Academy, which started commercial operation in May 2019 and onboarded three batches of trainees, halted classes in the second quarter of 2020, resulting in the temporary suspension of revenue generation during the period.
Total direct costs in the first half of 2020 amounted to P1.46 billion, a decline of 30% from P2.071 billion last year as cost-containment measures were put in place by the ground-handling and catering subsidiaries.
The share in net income/loss of the group’s associates—Lufthansa Technik Philippines, Inc., Cebu Pacific Catering Services, Inc. (CPCS), and Japan Airport Service Corp. (JASCO)—amounted to P213.86 million, reflecting a decrease of 142% from the 2019 profit.
One of the main contributors to the net loss for the first half of 2020 is the share in net loss from Lufthansa for maintenance, repairs and overhaul services due to significant reduction in its line maintenance business, as most commercial flights stood grounded in the country from March 16 onwards, MacroAsia said.
While Lufthansa’s base maintenance business volume stood resilient, quarantine measures restricted the availability of technical staff to work on the planes.
In Cebu, CPCS net earnings decreased 77%, while JASCO contributed a loss of P35.50 million as Narita Airport in Japan also saw flight closures and quarantine restrictions.
MacroAsia engages in aviation-support businesses at 27 airport locations in the Philippines and provides in-flight catering services, ground handling services for passenger and cargo aircraft, and helicopter charter flight services. It also operates and develops the sole economic zone within the Ninoy Aquino International Airport.
