Infrastructure holding firm Metro Pacific Investments Corp. booked a 14 percent year-on-year growth in first quarter core net profit to P3.1 billion on higher earnings from its power, tollroad and hospital businesses.
Including non-recurring items, MPIC’s consolidated net income attributable to owners of the parent company rose by 14 percent year-on-year in the first three months to P3 billion. Non-recurring expense amounted to P126 million substantially comprising project expenses and one-time separation expense as a result of Maynilad Water’s streamlining program.
In terms of contribution to the company’s net operating income: power (distribution and generation) accounted for P2.1 billion or 52 percent of total; tollroads contributed P900 million or 24 percent of the total while water (distribution, production and sewerage treatment) contributed P700 million or 18 percent. The hospital group contributed P182 million or 4 percent of total while the rail, logistics and systems group contributed 2 percent of total.
“Our earnings growth reflects our increased investment in the power sector last year together with strong volume growth for our tollroads and hospitals businesses. First quarter 2017 held one less billing day for our power and water businesses than first quarter 2016 which slightly reduced their headline volume growth for the quarter,” MPIC president Jose Ma. Lim said in a press statement on Thursday.
Earnings from the power business rose by 30 percent year-on-year while toll roads saw a 14 percent growth in earnings contribution in the first quarter. The hospital business grew by 36 percent.
On the other hand, contribution from the water business slipped by 15 percent due to higher operating expense and lack of tariff adjustments, Lim said.
Delays in tariff adjustments are gnawing on investor sentiment, Lim stressed. “Investors are increasingly concerned about the continuing delay in resolving various tariff issues. Discussions with the new Administration continue and there is agreement that our capital expenditures are essential and that contracts will be honored,” he said.
“I have as yet no immediate timetable for resolution of these issues although I understand the Maynilad arbitration ruling is imminent. I expect continued volume growth this year but it is too early to provide earnings guidance for the full year 2017,” he said.
Overall, Lim said the combination of years of capital expenditures to enhance the reach and quality of services together with the failure to date to implement tariff increases that MPIC’s water, tollway and rail businesses were entitled to had slowed the group’s growth in core earnings per share.