Metro Pacific nets P820M in Q1, up 26%

MANILA, Philippines—(UPDATE 2) Infrastructure holding firm Metro Pacific Investments grew its first-quarter net profit by 26 percent to P820 million from a year ago on higher earnings from its water, power distribution and hospital businesses.

Stripping out non-recurring items, core net profit reached P1.13 billion, up by 44 percent from a year ago, the company reported on Monday.

The P310-million difference between the headline and core net profit was due to value-added tax payments, foreign exchange adjustments and one-time provisions for general projects.

Maynilad Water Services Inc. accounted for 45 percent of total core net income contribution amounting to P707 million. This was attributed to higher-billed volumes and tariffs. Maynilad’s core net profit for the quarter stood at P1.4 billion compared with P1.18 billion a year ago.

Manila Electric Co., which benefited from higher tariffs, contributed P437 million, or 28 percent, to MPIC while investments in the hospital group contributed P64 million, or 4 percent of total core net income. Meralco’s core first-quarter net profit surged by 64 percent to P1.33 billion.

Contribution from Metro Pacific Tollways declined following the expiry of its tax holiday at the end of 2010. Its core net profit fell by 8 percent to P366 million.

Meanwhile, total core net profit of the hospitals group reached P160 million for the first quarter, up by 44 percent from a year ago. This group now comprises five full-service tertiary hospitals, three of which are in Metro Manila—Makati Medical Center, Cardinal Santos Medical Center and Our Lady of Lourdes Hospital. Also included are Riverside Medical Center in Bacolod and Davao Doctors Hospital in Davao.

“I believe that MPIC remains well positioned to pursue further infrastructure opportunities, which in turn will improve operational and service efficiencies and help boost the nation’s economy,” MPIC chairman Manuel V. Pangilinan said.

Pangilinan said the considerable capital expenditure made by each of MPIC’s businesses this quarter and in the past had supported utilization growth and tariff adjustments that, in turn, boosted the holding firm’s first quarter results.

“We do not yet know the final determination of the ERC (Energy Regulatory Commission) with respect to investment plans and tariffs at Meralco and, given the importance of Meralco in our results, we are not yet in a position, at this time, to provide our usual full-year core earnings guidance,” Pangilinan explained.

“However, as Maynilad achieved its tariff increase only in the middle of the first quarter of this year and continues to expand billed volume, we anticipate improved income from it for the rest of the year.”

Meralco and Metro Pacific Tollways historically achieve stronger second quarter volumes than the first quarter, while the hospital group is progressing well, he added.

“On this basis, I believe our shareholders should enjoy a healthy increase in core net income for the year as a whole,” Pangilinan said.

But because its tax holiday had expired, MPTC would have to settle up to P500 million in tax payments for the full year. Still, company chief Ramoncito Fernandez said the amount could be offset by a recent debt refinancing activity as well as an increase in tariff.

Rising oil prices led to a decrease in vehicular traffic at MPTC’s toll roads in the first three months. But Fernandez said the company was still glad when it posted a modest 1-percent growth in volume during the period.

“April was better than last year, but it’s still a very modest growth,” Fernandez said.