Metro Pacific core profit jumps 7% to P15.1 billion

METRO Pacific Investments Corp.’s (MPIC) water business includes investments in Maynilad Water Services, Inc. and MetroPac Water Investments Corp.

By Arra B. Francia, Reporter
INFRASTRUCTURE conglomerate Metro Pacific Investments Corp. (MPIC) delivered a seven percent increase in core profit for 2018, thanks to its expanded power portfolio and steady volume from its toll roads and water units.
In a presentation on Tuesday, MPIC reported a core net income of P15.1 billion, higher than the P14.1 billion it posted in 2017.
“This growth was due to the increase in operating income, an increase of 10%, and this breaks down into contributions from each of our subsidiaries,” MPIC President and Chief Executive Officer Jose Ma. K. Lim said in a press briefing in Makati on Tuesday.
The power business accounted for the bulk of MPIC’s operating income at 55% or P10.8 billion, followed by toll roads which provided 23% or P4.4 billion. Water provided 19% or P3.8 billion, and the hospitals group generated 4% or P771 million.
On the other hand, the rail, logistics, and systems group incurred a net loss of P248 million.
Mr. Lim noted the power unit grew by 15% due to the increase in ownership in Beacon Electric Asset Holdings, Inc. to 45.5% from 41.2% in June 2017, giving them the benefit of full-year recognition for the larger stake.
Manila Electric Company (Meralco) booked a core profit of P22.4 billion, due to a 5% uptick in energy sales and slightly lower tariffs. The positive performance helped offset the 15% decline in Global Business Power Corp.’s core net income to P2.5 billion, dragged by depreciation costs for one of Panay Energy Development Corp.’s plants.
For the toll roads unit, core net income went up by 13% to P4.5 billion after Metro Pacific Tollways Corp. (MPTC) saw a system-wide vehicle entries record of 916,886 per day across its toll roads in the Philippines, Indonesia, Thailand, and Vietnam.
In the Philippines alone, average daily vehicle entries climbed by 7% to 478,315 across the North Luzon Expressway, Cavite Expressway, and Subic-Clark-Tarlac Expressway.
MPTC is currently waiting for the resolution of tariff adjustments, ranging from 20-48% on different parts of its network.
Meanwhile, MPIC’s water business, composed mostly of Maynilad Water Services, Inc., contributed P3.8 billion to the company’s core net income, thanks to higher volumes and a combination of basic and inflation-linked tariff increases during the period.
Maynilad saw a 5% rise in core net income to P7.7 billion. However, the company has yet to see the resolution of two related arbitration awards. This includes the case against Metropolitan Waterworks and Sewerage System on the treatment of corporate income tax as an expense recovered through tariffs, as well as its claim against the government to recover foregone revenues due to delays in increasing tariffs.
The hospital unit through Metro Pacific Hospital Holdings, Inc posted a 15% core net income increase to P2.4 billion, after out-patient visits rose by 8% to 3.32 million people.
Light Rail Manila Corp. provided P394 million to the conglomerate’s core profit, while logistics unit, Metropac Movers, Inc. made no contributions as it is currently focusing on ramping up its warehousing projects to increase its customer base.
MPIC did not give a profit guidance for 2019. But sought for an outlook this year, MPIC Chief Finance Officer David J. Nicol said he sees all units sustaining their volume growth in 2019 except for power.
“In terms of power, overall we had a good year last year. The start of this year is looking a bit quieter, although it’s early days. But we will be below the 5% full-year (volume) growth last year,” Mr. Nicol said during the press briefing.
“Toll roads, we see it sustaining (growth). The hospitals, rails, water are sustaining (growth). The only area that is soft is power.”
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 jumped 2.63% or 12 centavos to close at P4.69 each at the stock exchange on Tuesday.