• MacroAsia Corp. recorded a consolidated net loss of P1.8 billion in 2020, a reversal from P1.2-billion net income posted in 2019 due to effects of the COVID-19 pandemic on air travel and tourism
• 2020 revenues sank 63% P2.3 billion from the previous year’s P6.2 billion
• Revenues from ground-handling and aviation services decreased 63% as flights serviced also dropped 63%
• Total direct costs in 2020 was 51% lower as cost-containment measures were adopted
MacroAsia Corp., the Philippines’ largest aviation support company, recorded a consolidated net loss of P1.8 billion in 2020, reflecting the debilitating effect of the COVID-19 pandemic on air travel and tourism and reversing the P1.194 billion net income posted in 2019.
The net loss included provisions amounting to P902.5 million, related to impairment provisions like expected credit losses and other provisions to comply with financial reporting standards.
Revenues in 2020 went down 63% to P2.258 billion from P6.168 billion in 2019.
Revenues from ground-handling and aviation services accounted for 46% of total revenue, while in-flight catering contributed 42%, MacroAsia said in a regulatory disclosure.
Revenues from the catering segment dropped 67% to P950.9 million from P2.906 billion in 2019. The decline in revenue was aligned with the drop in meal count by 67% from 13.8 million to 4.5 million due to the decline in demand for air travel.
Revenues from ground-handling and aviation services decreased 63% to P1.04 billion from P2.82 billion in 2019. MacroAsia said flights serviced went down 63% to 72,089 flights in 2020 from 197,079 flights in 2019.
Revenues from the company’s water distribution business contributed 10% to the total, and saw a 36% decrease to P221.42 million last year from P347.60 million in 2019. MacroAsia attributed the decline to the downturn of commercial water sales in Boracay as the island was impacted by the closure of tourism activities as well as the termination of the bulk water supply contract of Summa Water Resources, Inc. in Marilao, Bulacan.
On the other hand, water businesses in other areas grew significantly, but not enough to offset the significant drop in billed volume in Boracay and Marilao, MacroAsia noted.
Administrative revenues likewise decreased due to short-term discounts given to an economic zone locator during the period.
Moreover, no revenues are being derived from chartered flights since August 2016. Currently, MacroAsia Air Taxi Services, Inc. (MAATS) is generating income only from fixed-based operations services.
Exploratory drilling revenue represents MacroAsia Mining Corp.’s (MMC) earnings from drilling contracts in Carrascal, Surigao. The contracts were completed in the first quarter of 2021, and MMC has not undertaken subsequent drilling contracts. But it expects a new project, which is awaiting the final approval of the Department of Environment and Natural Resources.
MacroAsia’s aviation training school, First Aviation Academy (FAA), which started commercial operation in May 2019 and onboarded three batches of trainees (current 33 trainees), had its classes halted in the second quarter of 2020 due to COVID-19 restrictions, resulting in the temporary suspension of revenue generation during the period.
Total direct costs in 2020 amounted to P2.36 billion, 51% lower than for 2019’s as a result of cost-containment measures put in place to align with the business volume downturn.
Consolidated operating expenses likewise decreased by P106.86 million from last year’s P1.039 billion, mainly due to cost saving measures implemented for cash preservation. However, the group incurred a one-time significant cost for the rightsizing of the operating aviation-related subsidiaries through voluntary retirement and retrenchment, reflecting an increase in employee benefits.
Also as a result of the COVID-19 pandemic, MacroAsia said there was an observable credit deterioration in the receivables, mostly from airline clients, resulting in the need to accrue provisions for impairment of these financial instruments.
MacroAsia said its aviation-related business units continue to be impacted by the global downturn in air travel due to the COVID-19 pandemic. However, it noted that being an archipelago, air travel in the Philippines “is expected to recover faster, compared to countries without a domestic travel market.”
The group has also focused on growing its non-airline related business (water distribution and non-airline food business).
MacroAsia currently has seven subsidiaries, namely, MacroAsia Catering Services, Inc., MacroAsia Airport Services Corp., MacroAsia Properties Development Corp., FAA, MAATS, MacroAsia Mining Corp., and Allied Water Services, Inc.; and three associated companies—Lufthansa Technik Philippines, Inc., Cebu Pacific Catering Services, Inc., and Japan Airport Service Co., Ltd.
