MPIC core profit as of Sept hits P9.3B

Infrastructure holding firm Metro Pacific Investments Corp. grew its nine-month core profit by 13 percent year-on-year to P9.3 billion on expanded power portfolio and higher earnings from tollroads and hospital businesses.

Including extraordinary items, MPIC’s reported net income rose by 22 percent year-on-year to P9.5 billion.

“The strong results during the first nine months of the year reflect our ongoing expansion of investment, continuing improvements in service levels and efficiency as well as financial gains for our operating companies,” said MPIC chair Manuel V. Pangilinan.

Moving forward, Pangilinan said he hoped to see progress on the resolution of past regulatory issues that he said would further increase funds for investments.

MPIC’s core net income was lifted by robust traffic growth on all the roads held by Metro Pacific Tollways Corp.; an expanded power portfolio through increased investment in Beacon Electric Asset Holdings Inc. and Global Business Power Corp. and continuing growth in the hospital group.

In terms of contribution to the company’s net operating income: the power business accounted for P5.7 billion or 49 percent of the total while the water segment contributed P2.7 billion or 23 percent.

Tollroads contributed P2.6 billion or 23 percent and the hospital group contributed P443 million or 4 percent. The rail and systems group contributed P135 million or 1 percent.

“Our continuing earnings growth reflects significant volume increases for all our businesses together with our intense focus on operational efficiencies which have been achieved as a result of years of elevated capital expenditures. As such, while our earnings progress is encouraging, our core annualized return on equity of 9.2 percent, which reflects our P149 billion of shareholders’ funds invested, requires further improvement,” said MPIC president and chief executive officer Jose Ma. Lim.

Although some of the operating companies chalked up lower core earnings, Lim said MPIC benefited from the big change in Manila Electric Co. (where interest was raised to 41.2 percent from 32.5 percent) and the takeover of Global Business Power Corp.

On the other hand, Meralco’s core net income for the first nine months decreased by 5 percent to P15 billion as an increase in electricity consumption was offset by lower distribution tariffs and the absence of the generation and transmission recoveries recorded in 2015.

For water, Maynilad Water’s 24-percent drop in nine-month core earnings to P2.7 billion was attributed to higher tax expense from expiration of its tax holiday holiday in December 2015, offset by a 4 percent increase in billed volume and 3 percent rise in average effective tariff.

The tollroads business grew core earnings by 20 percent to P2.4 billion attributed to surging traffic growth, cost controls, and new contributions from SCTEX and investee firm in Vietnam, CII B&R.

The hospital business grew core earnings by 39 percent to P443 million. Of the increase in core net income, 19 percent pertained to the contribution from new hospital acquisitions in 2016 while organic growth of 22 was driven by lower interest expense,  cost savings and increasing patient revenues.