MPIC posts 14% increase in 9-month net profit

MANILA, Philippines–Capital spending, however, may be affected by unresolved tariff adjustment issues involving certain businesses, particularly water, tollroad and possibly light railway, MPIC said.

Excluding non-recurring items in the nine-month period, consolidated core net income rose by 15 percent to P6.5 billion. “At this stage, we are continuing to guide to P8 billion core net income for the full year,” MPIC chair Manuel V. Pangilinan said in a statement on Thursday.

Non-recurring charges of P475 million were recorded during the period, composed mainly of taxes incurred on the reorganization of the hospital group, project expenses and one-time separation expenses at its water utility business.

“All of our operating companies have again reported strong profitability in the period. This reflects our unblinking focus on operational efficiencies but at the cost of years of high capital expenditures,” said MPIC president Jose Ma. Lim.

“However, a number of our businesses are facing delayed, if not overdue, tariff adjustments—particularly our tollroads. For example, we are close to reaching a point where continued spending on road construction without resolving the tariff issues would be inconsistent with our fiduciary responsibilities to shareholders,” he said.

Pangilinan said the strong results for the nine-month period were due to continuing improvements in service levels as well as efficiency and financing gains for MPIC’s operating companies.

MPIC’s board announced a special one-off dividend of 4 centavos per share in recognition of the completion of a transaction by the hospital group with Singapore sovereign wealth fund GIC.

The increase in MPIC’s core earnings for the nine-month period was attributed to the following:

— Robust earnings at Metro Pacific Tollways Corp. (MPTC), which grew its net profit by 8 percent to P1.5 billion;

— Growth at Maynilad Water Services, Inc. and Manila Electric Co. due to moderately higher volumes sold; and

— Strong organic growth and the benefit from new investments in the hospital group.