Megaworld Corporation (MEG) Earnings Call Transcript & Summary

Good afternoon, everyone. Welcome to the First Half Financial and Operating Results Briefing of Megaworld Corporation for the Year 2024. I am [ Benny Austria ], and I will be your host for this session. Before anything else, I would like to welcome our distinguished panelists who are here to provide insight into the group's performance and answer your questions. Joining us today are: Mr. Roland Tiongson, the First Vice President for Megaworld Premier Offices.

Hello.

Ms. Cleofe Albiso, the Managing Director for Megaworld Hotels and Resorts. We also have here Mr. Graham Coates, First Vice President, Megaworld Lifestyle Malls. And Mr. Andy Dela Cruz, Investor Relations Officer from Megaworld, who will be our presenter for today. Before we proceed to the presentation, a quick reminder to our participants, questions will be pertained after the presentation. We have 2 options available. [Operator Instructions] Without further ado, I will now turn the floor over to Mr. Andy for the presentation.

Thank you, Benny. Hi, everyone. Good afternoon. Thank you for joining us for Megaworld's First half 2024 Results Briefing. So let me begin this presentation with an update on Megaworld's financial performance during the period. For our first half performance, Megaworld's revenue grew 22% to PHP 39.1 billion as we saw strong growth from our real estate sales, mall rental income and hotel revenues. Our office segment also delivered stable performance for the period. Our margins were kept stable during the first half and even improved on the GPM level on our effective pricing and cost management measures. EBITDA, as a result, grew by 21%, while net income for the first half of the year increased by 9%. Our bottom line growth was capped by ForEx losses amounting to PHP 853 million in the first half. Now, zooming in on our second quarter numbers, our revenues rose sharply by 28% to PHP 20.2 billion. Costs and OpEx picked up on higher hotel spend in line with the ramping up of our operations for our hotel group. Net income grew by a similar 9% year-on-year, capped again by ForEx losses amounting to PHP 677 million during the second quarter alone. Now, for comparison, we saw ForEx losses of PHP 297 million in the second quarter of 2023. And in the first half of 2023, we booked a ForEx gain of PHP 364 million. Now, excluding these ForEx adjustments, Megaworld's net income for the second quarter of 2024 would have grown by 18%, while net income for the first half of the year would have grown by 25%. Our revenues of PHP 39.1 billion during the first half is as follows: real estate sales still account for majority at 64% of total revenues; office accounts for 16%; malls at 8% and hotels at 6%. On a per segment basis, real estate sales grew by 30% in the first half to PHP 24.8 billion on an accelerated pace of project completions and faster unit sales. Office rental increased by 1% to PHP 6.3 billion on continued rental escalations, renewal of expiring contracts and new leases signed during the first half of the year. During the second quarter, office revenues remained largely flat with a 0.6% growth year-on-year and a 0.1% growth quarter-on-quarter despite the headwinds faced by the industry. Mall rentals rose by 19% in the first half to PHP 3.0 billion on higher occupancy rates and tenant sales. Hotel operations continued to post the strongest growth among our group at 38% to PHP 2.4 billion as domestic tourism and MICE activities continue to pick up during the first half. We continue to sustain our healthy balance sheet. We ended the period with gross debt of around PHP 106 billion. Of our gross debt, 81% would be bank loans, while 36% of the interest rate is fixed. Our dollar exposure is at 40% or about $550 million of our gross debt. Now, our net debt-to-equity remains at a very healthy 30.7%, largely unchanged from the previous quarter at 30.6%. Meanwhile, CapEx spend for the period amounted to PHP 25.2 billion, and it's mostly used for project development CapEx needs. Next, let's discuss operating updates from our company and our key business segments. To start things off, being a township developer, we are very happy to announce that we have achieved great [Technical Difficulty] milestones so far this year. Megaworld now has 33 townships under its portfolio, spanning over 5,300 hectares all over the country. During the second quarter of the year, we launched our 32nd township, Lialto Beach and Golf Estates in Lian, Batangas. This 150 hectare township is a unique township with its own beach coast and a full 18-hole golf course. Also, just this week, this Monday, we announced our 33rd township, the 25-hectare integrated active wellness township San Benito Private Estate, which the company will develop in partnership with a group that owns and operates the world-famous and multi-awarded medical wellness resort, The Farm at San Benito. Residents in this township will get access to The Farm at San Benito as part of the many benefits of owning a property here in this township. Now, moving on to our real estate segment. This slide highlights our gross profit margins for real estate development, which continued to improve in the past 5 years despite rising construction costs. This first half of 2024, Megaworld reached a GPM of 50% for real estate projects, almost 500 basis points higher than the pre-pandemic figure and 100 basis points higher year-on-year. As a result, our gross profit grew at a faster pace of 33% year-on-year. This highlights our effective pricing and cost strategies, and we expect to sustain our profitability through the year. This slide is a breakdown of our real estate sales. Around 79% remains to be from our upper middle to high-end projects, which is catered by our Megaworld and Global Estate Resorts, Inc. brands. Our economic to mid-income category, which is catered to -- by our Empire East Suntrust and other brands account for the remaining or 21% [Technical Difficulty] 18% of real estate sales. By location, Metro Manila accounted for 56% of real estate sales and the remaining would be in provincial areas. By classifications, bookings of vertical developments accounted for 80% of sales while horizontal developments account for the remaining 20%. Now, the strong demand for real estate projects were sustained this half. We booked PHP 68.5 billion in reservation sales during the first half of 2024, and we are on track to hit our PHP 145 billion target for the year. We saw strong demand for residential projects in Taguig, Cavite, Bulacan, Palawan, and Cebu townships. Demand for residential projects continue to be largely local, but foreign sales now account for 26% of our reservation sales coming from just 25% in the previous year. The number of sales offices of our international team continued to deliver on their growth by tapping overseas Filipino professionals and workers, while our local sales team continue to tap end users looking for their next homes. By location, projects in provincial areas accounted for 89% of our presales figure while Metro Manila accounted for 61%. Vertical developments remain to be the largest chunk as well and remains at 81% of our reservation sales figure. Now, our unsold inventory stands at about PHP 142 billion as of end June, which based on this period's trajectory is about 12 months' worth of inventory. Our current unbooked reservation sales stands at PHP 145 billion. Now, this quarter, we actually launched 5 projects totaling PHP 18 billion. This brings our first half launches to PHP 22.2 billion, on our way to reach our target PHP 40 billion worth of launches this year. By location, around 60% of the value of our launches in the first half was in Metro Manila, while provincial areas accounted for the remaining 40%. Majority of our projects launched also cater to the upper mid- to high-end segment at 70%, while most of them were also vertical developments at 93% of our launch value. Now, among our notable launches, this half, in this second quarter is One Portwood Residences at Newport City in Pasay City. This was launched just last June 2024 and is selling at an average selling price of PHP 323,000 per square meter. This project is expected to deliver PHP 4.6 billion worth of sales and to be turned over by 2029. This project is currently 14% sold as of July, just after a month worth of sale. The next project we wanted to highlight is by Suntrust Properties, our subsidiary. This is the Sonrisa Gardens at Baytown Palawan in Puerto Princesa. This was launched early second quarter and is selling at an average selling price of PHP 162,000 per square meter. This project is expected to deliver PHP 6.4 billion worth of sales and to be turned over by 2029 to 2030. This project is currently 50% sold and it's about 3 of 7 towers that we are going to launch in the next period. Also, we launched CostaVida Residential Resort in Mactan Newtown, Cebu just this June, CostaVida Residential Resort for that matter, is a development catered to active adults who are 50 years old and above, who are socially and physically active and independent. The rooms are much larger cuts starting at over 40 square meters as all rooms are wheelchair-friendly. And this project is expected to deliver PHP 2.7 billion worth of sales with an ASP of PHP 338,000 per square meter. This project is around 10% sold as we have just launched this in June, and we have yet to fully market the units and the project locally. Next, let's now move on to discuss the performance of our office segment. Our office revenues continued to remain stable even with the headwinds faced by the industry to reach PHP 6.3 billion in the first half of 2024. Our overall occupancy rate stands at 87% as of end June 2024, stable compared to the previous quarter. Our weighted average lease expiry stands at a healthy 3.15 years, which is above the midpoint of our average 5-year lease contracts for our tenants. Now, our tenants are also composed of high-quality tenants, 75% of our occupied space is accounted for by BPO tenants, while 21% are traditional office tenants. POGOs only account for 2% of our tenants currently. Now, Megaworld Premier Offices also recorded 261,000 square meters of transaction in the first half of 2024. This is about a 60% increase compared to last year's 160,000 square meters of transaction. Of the 260,000 square meter of transaction, new leases account for 55,000 square meters of the figure, while the remaining are renewals. And comparing that to the market, we captured up to 10% of the market share for the industry's new lease transactions. As most of our expiring contracts during the second half were in the second quarter, our renewal rate for the first half -- for this half's expiries is at 95% back to our usual pre-pandemic renewal rate of above 90%. Now, compared to the industry's 82% to 83% occupancy rate, MPO remains above the industry, thanks to the quality and prime location of our assets, as well as the relationship with our tenants. Next, I will now discuss operating updates of Megaworld Lifestyle Malls. For our mall segment, mall revenues in the period saw a 19% jump to PHP 3.0 billion on improving spend, foot traffic and operational occupancy. This slide highlights the recovery of our mall segment compared to 2019 levels, and signifies our full recovery compared to 2019. Our occupancy rate remains at an all-time high of 93%, 200 basis points higher than the first half of last year. Mall metrics also continued to improve with total tenant sales improving in the first half by 10% year-on-year. Foot traffic also improved by 19%. Ticket size or average daily spend is also 33% higher already compared to 2019 levels. All of these, combined with higher operational occupancy of 89% allowed our malls division to post a strong performance in the first half. Moving forward, we look to further increase our operational occupancy rate and thereby also improving our mall rental income. Our Eastwood City township is also home to the Philippines Mall of the Year, awarded by Retail Asia Awards, thanks to its innovative design and diverse array of leisure and entertainment options. It is the country's first accredited tourism entertainment complex. Now, during the first half of 2024, Megaworld Lifestyle Malls opened some 17,400 square meters of new stores across our portfolio. This includes SuperPark in Venice Grand Canal Mall for a total of over 1,000 square meters and MUJI in Uptown Mall Bonifacio at over 2,800 square meters. Moving on to our Megaworld Hotels & Resorts segment. Our hotel group posted PHP 2.4 billion in revenues, the fastest growth in all our various business segments. This was largely due to a higher overall occupancy of 76% in the first half, expanding by 18 percentage points compared to the previous year's 58%. Our average daily rate also improved to PHP 2,800 or that is a range of around PHP 1,500 to PHP 4,500 average daily rate for our various hotel brands and locations. Our hotel EBITDA margin is at 15%. Higher costs such as manpower as we rapidly expanded our operations to cater to the increase in MICE and tourism demand. And as we ramped up the operations for our Grand Westside Hotel, which just opened in June caused our margins to remain largely stable. Just this June, as mentioned, President Marcos also inaugurated the 1,530 room Grand Westside Hotel located at Westside City in Paranaque City. Grand Westside Hotel is the biggest hotel in the Philippines, and we will provide -- and will provide the much-needed rooms for tourists and the rising demand of our MICE events in the area. And to quote the President, "Our work together can help empower the Filipino in ways that will allow them to contribute to our society and to enjoy themselves while doing that. With the seal of quality stamped wherever the name Megaworld appears, be it condominiums, malls, or office buildings, I'm confident in the lasting and powerful outcome of your work and these collaborations." So indeed, we at Megaworld are very thankful for the appreciation and the words of the President. Now, moving on with the presentation. We -- let's discuss now the various targets and goals we have in place for this year. We maintain our PHP 55 billion CapEx budget this 2024, 80% of which is for our project development, while the remaining will be for land acquisitions. As of the first half, we have spent about 46% of our total CapEx budget, and we are on track to reach this budget. Now, we are targeting actually to reach 35 townships under our portfolio by the end of this year. This also aligns as we celebrate Megaworld's 35th anniversary this year. And these townships will provide the continued growth for Megaworld in the next 10 to 20 years. We are aiming to launch 1 township in the third quarter of this year and another one by the fourth quarter of this year to bring us to 35 townships. These townships that will be added will be in Luzon and in the [ West Wing ] region. For our real estate segment, we maintain our PHP 145 billion reservation sales target this year. We are confident and we are on track to hit this target as we are currently at 47% of the figure. We are also on track to reach our launch target of PHP 40 billion worth of projects this 2024. For our office pipeline, we plan to grow our portfolio by 148,000 square meters or by 10% by 2026. These will be in 5 different contracts of Megaworld, all of which are outside Metro Manila already. For this year, we plan to turn over Enterprise One and #1 Upper East, which will add around 48,000 square meters of GLA. For our malls, we expect to increase our portfolio gross leasable area by 29% or 150,000 square meters until 2026. The larger portion of our mall pipeline will be for next year and in 2026, which include Boracay Newcoast Beachwalk Capital Mall in Capital Town Pampanga and Highland Mall and Park in Highland City, Cainta, Rizal. Now, we continue to grow our hotel room keys by 3,965 room keys or about 80% higher compared to our current number of room keys. Grand Westside Hotel, our largest hotel with 1,500 room keys is planned to continue expanding its operational room keys capacity moving forward as we have soft launched around 300 room keys last June. Aside from this, we are also looking to open Chancellor Hotel Boracay this year, which will around -- which will add around 500 room keys. Finally, I would like to end with the following key takeaways from this call. For our real estate segments, bookings continue to increase sequentially, and we see this to continue improving throughout the year. We see strong demand in both our provincial projects and in Metro Manila projects, and we expect this to continue towards the second half of the year. For offices, our high tenant retention and ongoing rental escalations allowed us to still continue growing amidst a market with many headwinds. We expect to continue renewing our expiring contracts and see oncoming demand from the still growing BPO industry. For our Lifestyle Malls, we saw a surge in rental income driven by higher tenant sales, foot traffic and higher operational occupancy. We expect to sustain this trajectory of our mall rental income for the year. Finally, for our hotel segment, hotel revenues continue to grow beyond pre-pandemic levels as we see a large pickup from local tourists and MICE activities. We expect hotel revenues to continue its growth in step with the expected improvement in international tourist arrivals, as well as the additional room keys that we are expected to open this year and moving forward. That wraps up the presentation on Megaworld's first half 2024 results. Thank you. I will now pass on the floor to Benny, who will open the floor for questions.

Thank you so much, Andy, for that very comprehensive presentation. [Operator Instructions] So as we await questions that will be coming through the Q&A tab and the raise hand function, let's begin addressing some of the questions that were sent to us via email ahead of this session. So we will first read out the questions, starting with our hotel segments. So the first question, considering the recent opening of the Grand Westside Hotel, can you share initial performance metrics and customer feedback? What makes this hotel unique versus other hotels in your portfolio?

Thank you, Benny. We're -- obviously, we're very excited with the opening of our recent property, the Grand Westside Hotel, raised by no less than our President. It's been just a month in operations, and we have posed about 30% in occupancy. We're glad to have been able to attract a lot of business coming from the industry itself. A lot of hotel and tourism organizations have booked meetings in Grand West. We did have some spikes of occupancy for layover flights with our partner airlines, as well as other companies that are within the area. We are very glad to share that this opening of the Grand Westside, especially when it completes its full inventory will really improve the capacity of, not just this area, but total sector in terms of MICE capability because there's not like it with 1,530 room keys of inventory. We are also very strategically located. You see there are a lot of MICE venues around the location. So concerts, not just events, not just conferences, will definitely be a good complement to what we have here at Grand West.

Yes. Great. Thank you, Ms. Cleo. Another question for the hotel segment. You've mentioned in the past briefing that MICE activities or venues significantly drive the occupancy rate. So how do you plan to improve the occupancy of the hotels that have limited or no MICE facilities?

It's multi-pronged strategies that we've put in place. We're also very excited that across the Boracay areas, we have the Boracay Newcoast Convention Center. And we're looking forward to the Mactan Expo Center that's going to open next year. That will enable our 2 hotels in Mactan, the Belmont Hotel Mactan, as well as the Savoy Hotel Mactan to be able to cater to MICE. And in areas where we don't have the locations, we're also surrounded by amenities in our townships that also have options for meetings. So examples are in Iloilo, where we have our Richmonde Hotel Iloilo, as well as our soon-to-open Belmont Hotel Iloilo, we are located within the Iloilo Business Park, and it also has the Iloilo Convention Center. We look at strategies of distribution presence across global platforms, good tie ops and network and engagements with online travel agencies to make sure that we're able to yield. We're able to have a dynamic pricing strategy, as well as be able to have some good leverage in the seasonality of the sector.

Thank you so much, Ms. Cleo. So we'll now go for the question of [ Yvonne ].

Can you hear me?

Yes, Yvonne loud and clear.

So my first question is on presales. Presales at PHP 68.5 billion, that would make 2Q around PHP 32 billion. Just want to make sure the numbers correct first. Is that right for 2Q?

That is right, Yvonne, PHP 32 billion for 2Q.

Yes, so that would be about a 12% drop year-on-year for 2Q. And for 1Q, it was about 8% drop year-on-year. Could you share with us what led to presales falling further in the second quarter?

Sure, Yvonne. Well, first thing, I think -- we are still confident that we will hit our reservation sales target of PHP 145 billion by the end of the year. So that would mean that we expect our reservation sales to ramp up in the second half of the year. And I think the larger focus or the largest -- one of the reasons for our these lower reservation sales compared to last year, this quarter is the lower launches that we did this first half. So in this first half, we only launched PHP 22 billion. And the second quarter launch of PHP 18 billion, more than half of that was actually launched towards the end of second quarter already, so in June. So a lot of these projects did not experience 3 quarters' worth of sales, so mostly a timing issue for those launches. But come second half, we should be able to reap and sell more of these new launches and as well as the -- all the inventory that we have.

Okay. So to reach about PHP 145 billion for presales full year, that would mean you will have to achieve about PHP 76.5 billion in the second half. What is the company doing to -- like in order to achieve that for the second half? Do you see like demand is still growing strong? What do you think are some of the supporting factors that will help you achieve that?

Thank you, Yvonne. Definitely, demand is still growing, especially for the key areas that we are inside the Philippines. For this year, we are planning to launch 4 new townships, and we have already launched 2 new townships this year. And this should help improve our reservation sales and improve the sales of our projects towards the second half of the year. And 2 of these townships that we launched are actually just the second quarter. And then the last one was just this week. So hopefully, as we launch more projects and as we continue to drive our sales force who are actually doing a lot of work, a lot of briefings internationally and conferences and reaching out to our current and new potential customers, this should really help us grow and reach that PHP 145 billion of reservation sales. Yes. So come in second half, we are also expected to launch PHP 20-more billion in project launches, which is lower compared to last year, but we are digesting, right, the large number of launches we did last year. So second half would be maybe another PHP 20 billion worth of launches. And into 2025, we hope to accelerate these again.

Okay. Andy, just a couple of more questions for me. How are cancellation rates looking for you?

Yes. Actually, cancellation rates are not talked about anymore. They are back to pre-pandemic levels already, which is at around 5%. And then that came from the closer to 10% to -- so high single digits to 10% cancellation rates during the height of pandemic and it's now back to 5%.

Right. Would you also be able to share the number of unsold inventory in terms of number of units and also in dollar value?

So in peso value, it's about PHP 140 billion. That's about $2.5 billion in value. Number of units, we don't actually have that. We can get back to you on that after this call, but it's across several developments within the group that's for all brands under Megaworld, GERI, Suntrust and Empire East. What I can share is that, our RFO levels improved sequentially. Past quarter, it was around 1/3 of our unsold inventory. Now, it's just at 26%. So a lot of the sales we did during the second half -- during the first -- second quarter and the first half was more towards RFOs.

Right. Just one last question. So out of your unsold inventory, how many are located at the Bay Area?

We'll have to get back to you on this, Yvonne. But the Bay area, we have about 6 projects there, and most of these projects are mostly fully sold already. So it should be a very minimal part of our unsold inventory, maybe less than 5%.

So our next question will be from Danielo.

So I have 3 questions. First would be on the POGO. So how is your dialogue with your POGO tenants coming along, i.e., are they really expected to end their contract by end 2024? How will you treat advance rents or deposits? And do you have any guidance on how soon you can fill up the vacated spaces?

Danielo, thank you for your question. We're constantly in touch with them, and the way we are seeing it, they will be staying until the end of the year. And so, we think we have sufficient time to find replacements for them. I think it will take us around 6 to 9 months before we realize a new -- from today, I mean, before we realize rentals coming from the spaces that they will be vacated. But they are not yet vacated. Sorry, did I answer all of your questions?

Yes, thanks for that, Roland. And the other question is, essentially the treatment on the advanced rents or deposits. I'm just curious whether there's any concession there or essentially, how would you treat it given this change in dynamics?

We are still discussing that portion of the situation because legally, they are actually liable for -- liable to forfeit. They are supposed to forfeit their advance, their deposits, because they will not be able to finish their lease term. So that's the default, but we are still in talks regarding the financing.

Got it. Okay, that's pretty clear. Second question is still on office. Can you share the take up rates of the upcoming office buildings, specifically those scheduled for completion or opening for 2024 and 2025?

Oh, actually, we are still in the process of showing the spaces to our prospective tenants. Our -- the ones that will be finished this year is still due to be finished by the fourth quarter. So it's still pretty early to do sign ups. It's not like in Metro Manila, where it's easy to pre-lease in the provinces. They usually wait for the actual completion before they do their take ups.

Okay. Thanks for the color, Roland. My last question would be on residential. Essentially, can you discuss payment terms offered to buyers? I'm assuming that the payment terms are slightly longer this time around compared to pre-pandemic period. Just want to get a better sense as to how long that remains to be. And how do you see it evolving for the next year or so?

Danielo, I'll take that question. No, actually, our payment terms are the same, which is, in terms of length, at least, it's 5 years on average. There are only very specific projects that will go above this, which I think was what was most focused on during the past year, given the launch of Uptown Modern, which was stretched to 7 to 8 years, because the construction of that really takes about 7 to 8 years. So we really match our payment terms with the construction period. But where we were, we were flexible. Remain flexible is on the amount of down payment that we require for the customers. This has remained through over the past year. We usually collect 60% over 5 years, but we remain flexible on that, going to 40% over 5 years, right, or 30% over 5 years, depending on the project. Still, we'd like to collect the cost to construct that building during the 5-year period during construction, and that has always been our business model anyway. So with that, I believe payment terms for us are still very similar to where it was before. If at all, we did give out some very good promotional rates, or at least promotional rates during our Megaworld anniversary during June of 2024, where we celebrated our 35th year anniversary. So there were bigger discounts given then for cash payments precisely. But these payments are still much higher compared to the launch pricing.

Andy, if you don't mind, just one follow up on that. Essentially, you have an unsold stock of around PHP 140 billion. If I'm not mistaken, that would essentially be almost 1 year's worth of presales. So my question is, how does management look at your current unsold stock? I guess, the real question is, whether you'd need some sort of discounting, which I've already heard from other players in the space, i.e., for slow moving inventory, they really just have to offer discounts to potential buyers.

Danielo, yes, no, PHP 140 billion, and management sees this as we try to maintain about a year's worth of inventory, even during the pandemic, or even pre-pandemic. So when there is a need to decrease our launches to really digest the current number of unsold inventory, then we will, such as this year, we're just launching PHP 40 billion worth of projects, right? And you're right, our -- the focus now is to taper down or lower our unsold inventory, in fact, with a very good focus on RFOs, but not largely because we are not confident or we are afraid of the high level of RFOs in our inventory. But it's largely because these RFOs have already experienced 5 years worth of annual price increases already. And when we sell these to our customers right now, and it's a whole set of market for RFO buyers, for RFO investors as well. And we tend to get to price higher, and a lot of them also pay by cash. And terms are much or at least less relaxed for RFO units. So that actually helped our margins improve for this first half to 50% compared to pre-pandemic at 45%, 46%.

Are there any more participants who would like to raise their hand? Please feel free to raise your hand so we can address your questions and concerns. Since we don't have any other participants who have raised their hands at the moment. We will now address the questions that have been submitted in the Q&A tab. So we'll have here from [ Luis Gregorio Francisco ]. Can you comment on the constant buildup in receivables? Are stretch payment terms driving this? And when can we expect cash conversion to pick up?

I'll take that. Thank you, Luis, for your question. Yes, this is on our flexibility on the amount that we collect during the 5-year period, not on the length or maturity of the pre-selling terms. But -- yes, that's right. You're right.

There is a question here for -- from [ Raymond Franco ]. I think this is for Sir Graham. What was mall tenant sales growth in the second quarter of 2024 alone? And how does this compare to 1Q 2024? Similarly, what was mall foot traffic growth in 2Q 2024 compared to 1Q 2024?

Yes, the 2 quarters have been quite similar in terms of growth, both in terms of sales and foot traffic. Since the turn of the year, we've been consistently growing by more or less the same percent. So that's why if you look at our first quarter, we've been very consistent with our sales growth of around about 11% for the year. And the foot traffic is also up by 19%. So if we look at by quarter, it's pretty similar. I would say, slightly higher in the second quarter.

Another question here from [ Raymond Franco ]. This is for the -- I think this is for hotels, with regard to Westside, would you have any information on the opening days for casinos?

No. We don't have a definitive schedule that we're getting from them. But just yesterday they were posting mass hiring already, so it should be anytime soon. The iconic bridge is set to be finished within this quarter. And you see the building in itself. Physically, the construction is really moving very fast. But as to the date, we don't have that, but we're looking forward. I think it's just going to be a year of us operating while we wait for the casino to fully open.

And the third question for [ Raymond Franco ]. Is there any plan to hedge the dollar loan exposure? I think this is for Sir Andy.

I'll take that question. Thank you, Raymond. For our dollar loan exposure, the move is to pay down when rates get better. And hopefully, because this goes both ways, right, when the dollar or peso depreciates against the dollar, then we lose. We realize -- we see some unrealized ForEx exchange losses in our income statement. But when it goes the other way around, then we can reverse that through a ForEx gain. Now, what we don't want to do is crystallize that figure by paying the amount right now. So we're hoping for the dollar exchange rate to taper down and be in our favor. But currently, there are -- there is a portion that is hedged for that dollar loan exposure. It's only a small amount, but currently, there are no plans to hedge the dollar loan exposure.

There's also a question here from [ Marco ]. Occupancy rate was the same quarter-on-quarter, but there was 2% reduction in POGO exposure and were replaced by BPO tenants. Did BPO tenants occupy the space vacated by POGOs or were they in a different location? And what was the effect on the rent?

What I know is that, we have a 2% exposure with POGO. We have a 2% exposure with POGO, but they have not left yet. So that's actually what has happened. But historically, for those that were POGO vacated, traditional office tenants usually took up the space that they're vacating.

Also here a question from [ Cristina Ulang ]. Congrats. [ May I inquire ] impact of POGO brand on your revenue, occupancy rate, lease life and margin?

Sorry, is that for me?

Yes, sir.

Oh, okay. So sorry. Can you repeat the question?

Is there an impact of POGO brand on your revenue, occupancy rate, lease life and margin?

Well, for once the 2% leaves, it will have an impact on 2% of our revenue temporarily, in the event that we won't be able to lease them all out immediately. But that's about it. In terms of lease life, it's going to be not that much because the POGOs now, if you have heard from the news, they have already converted from POGOs into IGLs. And POGO requires IGLs to just lease for 2 years. So that's the only lease term that they have. So when they leave, it's not going to have an impact on our -- much impact on our lease life or WALE.

Another question in the Q&A tab from Wilson Ng. Have you noticed any change in home buyer behavior since the announcement of the POGO ban? Sir Andy, I think...

Yes, I'll take that question. Home buyer behavior, not at all. The only township or city that we are in, in Megaworld that is affected by the POGO ban would be largely in Westside City, which is in Manila Bay area. But even then at that -- our projects there are all fully sold. And when these buyers bought these units before, they already paid by cash already. So, our projects, our current unsold inventory are in cities not affected by POGOs at all. So thereby we are not seeing any difference in consumer behavior for home buyers.

Thank you so much, sir Andy. Are there any more participants who would like to raise their hand or use the Q&A tab for their questions? I think none. So it seems that we are rapidly approaching the end of our allotted time for today's call. As we wrap up this session, we would like to extend our warmest gratitude to all of you for attending. So if you have any more questions that we were unable to address during this session, we kindly invite you to send them to us via email. We look forward to the opportunity of connecting with you all again in the near future. Once again, thank you for participation. Stay safe and have a great day, everyone.

Thank you.

Thank you, everyone.

Thank you.

Thank you. Good afternoon. Thank you.