MPIC posts ‘better-than-expected’ Q1 earnings

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By Krista A.M. Montealegre, National Correspondent

METRO PACIFIC Investments Corp. (MPIC) grew first-quarter earnings by 16% on the back of better-than-expected volume growth in its business units, as the infrastructure conglomerate remains hopeful of reaching an acceptable agreement with the government on its long-pending tariff issues.

In a disclosure to the stock exchange on Thursday, MPIC chalked up a 16% growth in consolidated core net income to P3.6 billion in the January to March period from P3.1 billion in the prior year.

The strong growth was attributed to the increased investment in the power industry through Beacon Electric Asset Holdings, Inc. last year, robust traffic growth on all domestic roads, and steady volume growth coupled with the inflationary tariff increase implemented by Maynilad Water Services, Inc.

Consolidated reported net income attributable to owners of the parent company rose 27% to P3.8 billion during the period from P3 billion a year ago.

In terms of contribution to the net operating income, power accounted for P2.4 billion or 54% of the aggregate contribution; toll roads contributed P1.1 billion or 24%; water added P800 million or 17%; the hospital group provided P190 million or 4%; and the rail, logistics and systems group delivered P35 million or the remaining 1%.

MPIC managed to outperform initial expectations in the first quarter, putting the company on track to exceed last year’s income levels despite the regulatory overhang at Maynilad and Metro Pacific Tollways Corp.

“We remain hopeful that there will be eventually an agreement with government in terms of the tariff structure,” MPIC Chairman Manuel V. Pangilinan said in a briefing in Makati City.

“You’ve seen the first quarter numbers, it turned out to be better than expected partly because the volume of the businesses has grown, driven in large part by the continuing robust economic growth. At the same time, our numbers have been helped by operating efficiency and cost containment,” Mr. Pangilinan said.

Foregone revenues have reached P12 billion for Maynilad and P10 billion for MPTC pending the resolution of the tariff issues, MPIC Chief Financial Officer David Nicol said.

“In this regard, the best way forward is for us to accept that we take the accumulated revenue backlog and apply it to the tariff over the remaining concession life together with a gradual increase in the next two to three years to bring the tariff to contracted levels,” MPIC President Jose Ma. K. Lim said, referring to a proposed solution with the Toll Regulatory Board.

Mr. Pangilinan voiced his support for the government’s infrastructure program and expressed optimism that the economy will “continue to be strong” despite headwinds, including rising inflation, softer remittances, and higher interest rates.

“Despite those (challenges), the volumes we’ve seen for April are still on the high side,” he said.

MPIC is one of three key Philippine units of Hong-Kong based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

Shares in MPIC lost 22 centavos or 4.23% to close at P4.98 apiece.