By Arra B. Francia, Senior Reporter
EARNINGS of Metro Pacific Investments Corp. (MPIC) went down by 9.8% in the second quarter of 2019, as the infrastructure conglomerate incurred foreign exchange losses in the period.
MPIC Chief Finance Officer David J. Nicol said the company recorded a net profit of P4.6 billion in the second quarter of 2019, lower than the P5.1 billion it posted in the same period a year ago.
“The reason for the difference is strangely compared to most companies here when the peso was weakening, we were getting foreign exchange gains. And now that the peso has turned around, on the foreign currency deposit of Meralco (Manila Electric Co.) and some of associates outside the country, that has conduced that,” Mr. Nicol said in a press briefing in Makati Thursday.
“So we went from a gain last year to a translation loss this year.”
With this, MPIC’s net income for the first half reached P12.799 billion, three percent lower than the P13.259 million seen in the same period a year ago. This came amid an 11% uptick in operating revenues to P44.62 billion.
MPIC President and Chief Executive Officer Jose Ma. K. Lim noted that the growth of the company has been affected by financing costs for its continuous expansion.
“Because we are heavily investing in tollways and then we’re starting construction of LRT-1 (Light Rail Transit Line 1 Cavite extension). So these are leading to rising financing costs,” Mr. Lim said.
Asked when it expects to turn around its earnings performance, Mr. Lim said results are “somewhat plateauing now,” adding that the company would have to wait until the new investments generate revenues.
MPIC’s power business accounted for P6.1 billion of core net income in the first half, four percent higher year on year — thanks to higher energy sales in Meralco, despite the slowdown in Global Business Power Corp.’s contribution.
For Meralco alone, the higher temperatures during summer and contributions from new connections led to a 10% increase in total revenues to P165 billion.
The tollroads business through Metro Pacific Tollways Corp. (MPTC) generated P2.4 billion in core profit, six percent higher year on year, following increased traffic from its domestic roads. Average daily vehicle entries for three of its tollways systems, including the North Luzon Expressway, Cavite Expressway, and Subic-Clark-Tarlac Expressway, firmed up eight percent.
In contrast, toll roads outside the Philippines declined by eight percent, due to lower traffic volumes in Bangkok and Indonesia due to construction and road integration in their concession areas.
Meanwhile, Maynilad Water Services, Inc grew its core net income by nine percent in the first half to P4.6 billion, driven by an 11% uptick in revenues to P12.2 billion. The west zone concessionaire benefited from a three percent increase in volumes, alongside inflation-linked tariff increases in October 2018 and last January.
Metro Pacific Hospital Holdings, Inc. (MPHHI) also reported a 21% increase in core income for the period, as both outpatient visits and inpatient admissions improved by 10% and six percent, respectively.
MPIC’s rail business through Light Rail Manila Corp. (LRMC) contributed P168 million to its core income, although the amount is fully reinvested to improve train operations. LRMC operates and maintains LRT-1, and is undertaking the project extending the existing train line from Baclaran to Bacoor, Cavite.
The logistics group under Metropac Movers, Inc. has yet to contribute to the company’s core net income, as the company focuses on establishing its footprint in the distribution center space first.
MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. —maintains interest in BusinessWorld through the Philippine Star Group, which it controls.
Shares in MPIC slipped 0.42% or two centavos to close at P4.78 each at the stock exchange on Thursday.