Despite tariff issues, MPIC considers P58.2B in capital spending in 2015
Metro Pacific Investments Corp. booked a higher profit in 2014 on increased earnings from its toll road, power, water utility and hospital group businesses but uncertainties over tariffs could affect its ability to raise funds for capital spending in 2015, officials said in a briefing yesterday.
Metro Pacific is still considering spending P58.2 billion in 2015, accounting for the bulk of the P101 billion that parent First Pacific Group has allotted for the year, Metro Pacific chair Manuel V. Pangilinan said yesterday.
The higher spending requirement came about as the company said core profit in 2014 rose by 18 percent to P8.5 billion year-on-year, while reported net income, which included non-recurring items, was up 10 percent to P7.9 billion. Metro Pacific said consolidated revenue during the period hit P33.8 billion, up 10 percent.
Maynilad Water Services Inc., which serves Metro Manila’s west zone and nearby provinces, led operating income contributions at 43 percent.
Recently, the unit won a case against state-run Metropolitan Waterworks and Sewerage System (MWSS) in an arbitration court, which upheld the company’s rate adjustment. This is expected to result in a 9.8-percent increase in the 2013 average basic water charge of P31.28/cu.m., inclusive of the P1 currency exchange rate adjustment which the MWSS has incorporated into its basic charge.
MWSS, however, has yet to act on the arbitration award, Metro Pacific said, adding that toll road rate adjustments were also pending with the Toll Regulatory Board.
“In the face of this favorable prospect, a number of our businesses are facing overdue tariff adjustments – particularly our water and toll roads operations where if left unresolved, continued capital expenditure on water projects and road construction would be degraded,” Metro Pacific CEO and president Jose Ma. K. Lim said.
Metro Pacific chief financial officer David Nicol noted that uncertainties in these areas could affect Metro Pacific’s fund-raising plans.
“What we are signaling is we are starting to see pressure on the ability to raise debt,” Nicol said, adding that the effect was “likely to hit over the course of 2015.”
Metro Pacific would need additional funds if it would win more big-ticket infrastructure projects.
Last year, Metro Pacific participated in a consortiums that won the automated fare collection system public private partnership deal for Metro Manila’s elevated railways as well as the P65-billion Light Rail Transit Cavite extension PPP. Pangilinan said the company was keen on more PPP deals, including contracts for LRT-2, provincial airport projects and the North South Railway project-South Line.
