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Metro Pacific aims for P13.3B core profit

H1 core profit up 17% to P7.8B
/ 05:11 PM August 04, 2017

Metro Pacific chair Manuel V. Pangilinan and chief finance officer David Nicol in a press briefing on Aug. 4, 2017

Infrastructure holding firm Metro Pacific Investments Corp. grew its first semester core profit by 17 percent year-on-year to P7.8 billion on the back of an expanded power portfolio alongside higher earnings from its tollroad and hospital businesses.

For the full year, MPIC expects core profit to reach P13.3 billion, around 10 percent higher than the previous year.

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“There’s normally seasonality (factor) in the second half that effects both water and power,” MPIC president Jose Ma. Lim explained in a press briefing on Friday.

In May last year, MPIC acquired a controlling stake in Global Business Power, thereby bulking up revenues in the second half of 2016. MPIC also raised its interest in Manila Electric Co. to 41.2 percent from 32.5 percent. The comparative base was thus lower for MPIC in the first semester while the base was higher in the second semester.

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Including non-recurring items, first semester net profit rose by 12 percent year-on-year to P7.8 billion.

“The increased momentum of our tollroads business in launching new transformational projects is visible to all, development of our power generation projects continues and I am pleased we are helping an ever-increasing number of patients in our hospitals,” MPIC chair Manuel V. Pangilinan said.

In terms of contribution to the company’s net operating income: power (distribution and generation) accounted for P5.3 billion or 55 percent of total; tollroads contributed P2 billion or 21 percent of total; water (distribution, production and sewerage treatment) contributed P1.8 billion or 19 percent of the total; the hospital group contributed P308 million or 3 percent of the total; and the rail, logistics systems group contributed P104 million or 2 percent of the total.

“Our headline core income growth is satisfactory but the translation of this to earnings per share still needs more momentum. While our businesses continue to drive efficiencies, it is apparent that the combination of sizeable capital expenditures and cost reduction programmes in recent years must be matched with contracted tariffs for our shareholders to receive the returns they are due. We look forward to settlement of the Maynilad arbitration award and remain committed to our infrastructure expansion program while holding close discussions with government on how to resolve our various tariff issues,” Pangilinan said.

MPIC president Jose Ma. Lim added that the combination of years of capital expenditures together with the failure to date to implement tariff increases that the group’s water, tollway and rail businesses were entitled to was a drag on growth in core earnings per share.

“Tariff delays are impacting investor sentiment”, Lim said.

“As expected, Maynilad won its arbitration claim in Singapore calling for compensation from the Philippine Government for payment of past due revenues, this now needs to be operationalized. However, the matter of the tariff to be charged to the public, as with our other businesses, remains unresolved and this is a continuing to constrain funding for new projects. This said, constructive discussions with the administration are in progress and there is agreement that contracts will be honored,” he said.

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“I have yet no immediate timetable for resolution of these issues although I believe them to be
imminent. I expect continued volume growth from all our businesses for the remainder of the year,” he added.

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TAGS: Jose Ma. Lim, Manuel V. Pangilinan, Metro Pacific Investments, MPI, MPIC
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