Aviation support service provider MacroAsia Corporation recorded a consolidated net income of P17.58 million for the first quarter of 2020, 92% down compared with the consolidated net income of P214.95 million in the same period last year.
Revenues for January to March 2020 reached P1.371 billion, a 30.2% increase from P1.053 billion reported in the same period last year, MacroAsia said in a regulatory disclosure.
Revenues from ground-handling and aviation services significantly rose 32% to P626.68 million from P473.58 million in the first quarter of 2019 due to continuous passenger and ramp services for the domestic and international flights of Philippine Airlines (PAL), PAL Express, and other air carriers, which increased 16% to 44,313 in 2020 from 38,257 in 2019.
Revenues from in-flight catering contributed 47% of the total revenues and have shown an upward trend to P639.85 million from last year’s P447.24 million. This is brought about by increase in the number of meals served to airline clients, from 1.900 million in 2019 to 2.972 meals in 2020.
Revenues from water operations contributed 6% of the total revenues, and decreased 1% to P83.64 million from P84.30 million during the first quarter of last year due to downturn of commercial water sales in Boracay as the island was impacted by COVID-19 tourism closure, although the water businesses in other areas grew.
Administrative revenues from economic zone leases did not vary significantly as rates charged did not vary significantly compared with last year.
Exploratory drilling revenue of P3.486 million represents MacroAsia Mining Corporation’s earnings from drilling contracts in Carrascal Surigao which was completed as of the period end.
Aviation training school First Aviation Academy (FAA) has started its commercial operation in May 2019 which onboarded batches of trainees and generated revenue from its current 33 trainees.
Share in net income/losses of associates (Lufthansa Technik Philippines, Inc., Cebu Pacific Catering Services, Inc., and Japan Airport Service Corporation) amounted to P78.01 million, down by 66%.
Other income and charges increased to P10.43 million against the P4.96 million in 2019 mainly due to forex gains as dollar exchange rates appreciates.
Total direct costs in the first quarter of 2020 amounted to P1.133 billion million, an increase of 41% from the P804.361 million in the first quarter of 2019. The increase is due to the higher labor costs of our ground-handling and catering subsidiary, driven largely by substantial increases in manpower count due to the growth in business volume following the takeover of PAL and PALex ground-handling and meal servicing starting March 16, 2019.
Aside from the difference in staff headcount during the periods being compared, wage increases also impacted on the labor costs.
Being an aviation services provider, MacroAsia said it has been impacted during the reporting period by the COVID-19 pandemic as flights were cancelled and airports were closed down to contain the spread of the virus.
Airline catering meal volumes and flight turnarounds were reduced by more than 90% of normal starting second half of March 2020 and “this situation still prevails as of this report date.”
MacroAsia said the management teams of the aviation services companies within the group have immediately instituted cash conservation and cost-control measures to cope with the ensuing crisis and business downturn.
Business recovery of the aviation service units will follow the track of the airline and tourism industries that will benefit from the easing up of quarantine and travel restrictions in the country and elsewhere.
The water utilities and concessions business unit of the group, on the other hand, registered growth in their respective business areas during the time of the community quarantine.
