INFRASTRUCTURE holding firm Metro Pacific Investments Corp. (MPIC) sees a modest growth in net profit this year, mainly due to the expiration of the income tax holiday enjoyed by water utility unit Maynilad Water Services Inc. at the end of 2015.
Last year, MPIC grew its core income by 22 percent to P10.3 billion as all businesses contributed higher earnings.
MPIC chair Manuel V. Pangilinan shared the prospect of a modest growth this year in a message to shareholders in MPIC’s annual report distributed on Friday.
“Offsetting that will be cost control and volume gains in all verticals along with higher dividends from our investment in the power sector, arising from an increased stake in Meralco (Manila Electric Co.) and decreased leverage at Beacon,” Pangilinan said.
For the medium to long term, Pangilinan said expansion of various businesses of MPIC could serve as “strong platform for growth given a fair regulatory environment.”
MPIC is also engaged in the tollroads and hospital businesses.
In recent years, MPIC found the regulatory environment to be “very challenging.”
“The regulatory issues can no longer be ignored; it will take the active participation of the private sector to help solve those issues. The investments needed to fix or build airports, roads, ports, rail systems and the like are too sizeable for government to do it alone. Hence, the public-private sector partnership. However, private participation will be hard to come by if existing contracts are not honored by the government,” Pangilinan said.
After winning the first arbitration on tariffs, Maynilad has gone to second arbitration to seek adequate compensation for the delay in the implementation of the arbitration panel’s decision to adjust tariffs.
MPIC’s tollroad group has also filed for arbitration for North Luzon Expressway and Cavitex, seeking compensation from the state for delayed tariff adjustment.
The MPIC-Ayala consortium—which won the right to operate and expand the Light Rail Transit-1 (LRT-1) system—had filed a compensation claim with the Department of Transportation and Communications for grantor deficiencies.