Unprofitable warehousing operations set for ‘winding down’

By Arjay L. Balinbin, Senior Reporter

METRO Pacific Investments Corp. (MPIC) managed to increase its second-quarter core net income this year by 82% to P3.5 billion, as more industries reopened.

“This acceleration of growth reflects an improvement in performance notwithstanding the continued imposition of varying levels of quarantine across the country and was partially augmented by the impact of the Corporate Recovery and Tax Incentives (CREATE) Law, which lowered income tax rates from 30% to 25%,” the company said in a statement on Wednesday.

The company said it benefited from the gradual reopening of more industries over the past year.

It also noted that the nationwide vaccine rollout enabled more businesses to reopen.

Without providing the amounts, MPIC said Manila Electric Co.’s core net income for the second quarter increased by 29%, owing to a 19% increase in energy sold.

Maynilad Water Services, Inc. saw an 8% decrease in its core net income for the quarter due to “higher operating costs and concession amortization.”

The company also said Metro Pacific Tollways Corp. “recovered from a loss position” to P1.1 billion, as traffic on all roads improved.

For the first half, MPIC said its consolidated core net income rose 13% to P6 billion.

“Contribution from operations rose 11% to P8.5 billion and is accounted for as follows: power — P5.4 billion or 63% of the total; toll roads — P1.9 billion or 22%; water — P1.4 billion or 17%,” MPIC said.

“Other businesses, mainly Light Rail and Logistics — [saw an] overall loss of P294 million, owing to the continuing impact of the pandemic on the ridership of LRT-1 (Light Rail Transit Line 1) and the ongoing recalibration of warehousing operations; partially offset by the hospital group’s contribution of P142 million,” it added.

Consolidated reported net income attributable to owners of the parent company surged 243% to P10.4 billion because of the “gain recognized from the sale of Global Business Power and the Don Muang Tollways.”

“These asset sales underscore MPIC’s commitment to optimizing its portfolio and realizing value for its stakeholders,” the company said.

MPIC remains positive that it will be able to hit its core income guidance of at least P12 billion for 2022.

“We are confident about meeting the core guidance numbers… All our businesses are doing well, particularly the hospitals. They have already learned how to adjust to Covid,” MPIC President and Chief Executive Officer Jose Ma. K. Lim said at an online briefing.

“In the first lockdown, they were severely affected; and in fact, they lost money in most instances. But by comparison, they have recovered almost normal operations and profitability,” he added.

Mr. Lim said the logistics business is currently being “restructured.”

“We dropped the trucking operations and the forwarding. We found that too problematic, and now we are just winding down the unprofitable warehousing operations that we have. It is not our plan to leave logistics. Our plan is to find a stronger platform in which we can enter into the area of e-commerce where we believe the market is in great need of service,” he explained.

“We are not leaving our contracts. We are allowing the contracts to wind down,” he added.

Mr. Lim also said MPIC is already looking at some “companies” for the e-commerce plan.

MPIC also plans to hire “younger” managers in line with the company’s digitization strategy.

Meanwhile, MPIC Chairman Manuel V. Pangilinan said the group is open to increasing its support for athletes.

Kung iaakyat natin ang ating suporta sa atleta (On whether we have to increase our support for the athletes), I think we should,” Mr. Pangilinan said.

“Are we open to getting other corporates or other parties into the equation? The answer is yes. I asked some people in many of our conversations… so that we can get more resources… Other corporates have expressed interest in participating,” he added.

MPIC shares closed 1.11% higher at P3.64 apiece on Wednesday.

MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT, Inc.

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