MPIC pulls in P2.7-B profit, enters logistics business
Metro Pacific Investments Corp. (MPIC) expects to replicate all throughout 2016 the earnings tempo it has set during the first quarter as it moves to enter the logistics business, an area where it aims to be the largest player in the country.
MPIC, which has businesses spanning power, water supply and tollroads, announced on Wednesday that core profit in the first quarter of the year hit a record P2.7 billion, up 7 percent, while total revenues were up 24 percent to P10.6 billion. Its reported net income was also up 8 percent to P2.6 billion.
MPIC chair Manuel V. Pangilinan said the company was hoping to end the year with core profit of above 7 percent.
“Despite the election uncertainty, the economy is doing well,” Pangilinan told reporters.
MPIC president Jose Ma. K. Lim said the company continued to face regulatory challenges in terms of tariff increases for Maynilad Water Services Inc. and Metro Pacific Tollways Corp., which handles North Luzon Expressway and Cavite Expressway. He said these issues were unlikely to be resolved within this year.
The company would be expanding its investment portfolio via a partnership with Basic Logistics via the formation of a new venture called Metro Pacific Movers Inc. Lim said the firm would be spending an initial P2 billion, ramping up to P5 billion over five years.
Pangilinan said MPIC would own 76 percent of Metro Pacific Movers while 24 percent would go to the owners of Basic Logistics. Lim said MPIC could pare this stake down to 51 percent to accommodate a yet to be disclosed international logistics company.
The agreement with the company, a large “blue chip” firm in the logistics business, could be signed as early as next week, Pangilinan said.
“We believe the state of the [logistics] industry, like almost all infra segments, was insufficient to meet the rising demand,” Lim said. “It points to a lack of capacity in the sector and we wanted to fill up the gap as soon as possible.”
Pangilinan said the group, which includes affiliate Philippine Long Distance Telephone Co. (PLDT), can outsource its logistics needs to the new venture. He said Manila Electric Co., PLDT and Smart Communications have about 7,000 to 8,000 vehicles at present.
