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MANILA — Megawide Construction Corp. reported a 26 percent drop in net income to P556.06 million in the first half of 2014 from the P747.96 million earned in the same period last year due to higher finance costs and sharply lower finance income.

In disclosure to the Philippine Stock Exchange, the firm said it recorded a 21 percent improvement in gross revenues to P5.06 billion from P4.17 billion in the first semester of 2013.

The increase is due to projects that it started in the second half of 2013 and early 2014. These projects include Rockwell Business Center, Shangri-La Salcedo, BPO Araneta and Grass 4 of SM Development Corp.

Cost of construction rose 22 percent to P4.17 billion from P3.42 billion.

Megawide incurred an 85 percent fall in finance income to P45.21 million in the first half of 2014 from the P309.32 million earned in the same period last year while finance costs rose to P178.74 million from P151.77 million in the first six months of 2013.

This is because cash and cash equivalents decreased by 77 percent or P1.75 billion due to investment made by the company to its joint venture with GMR Infrastructure Limited, the GMR-Megawide Cebu Airport Corp. (GMCAC).

Financial assets at fair value through profit or loss decreased by 17 percent or P968 million. The company terminated some its placements and invested the proceeds to GMCAC.

On the other hand, interest-bearing loans and borrowings-current increased by 51 percent or P1.24 billion as additional short-term loans were availed to finance the operation and capital expenditures of the company.