MPIC sets 2018 capex at P60B-P70B

Investment holding firm Metro Pacific Investments Corp. (MPIC) is spending P60 billion to P70 billion on projects this year, a top official said.

The amount is slightly lower than the capital expenditure figure last year.

“The headline number for MPIC is around P60 billion to P70 billion,” MPIC chair Manuel V. Pangilinan said in a briefing yesterday.

MPIC previously announced a capex of P653 billion for 2018 to 2022. The latest announcement was made as it reported the company’s first quarter performance.

In a disclosure to the local bourse, the company said that it saw its consolidated core net income grow by 16 percent to P3.6 billion from P3.1 billion in the first three months of last year.

This was driven by strong volumes across its portfolio and its increased investment in the power industry.

In particular, the growth was due to three main factors: an expanded power portfolio after making further investment in Beacon Electric Asset Holdings Inc. last year; robust traffic growth on all domestic roads and steady volume growth coupled with inflationary tariff increase at Maynilad Water Service Inc. (Maynilad).

In terms of contribution to the company’s net operating income, power (distribution and generation) accounted for P2.4 billion or 54 percent of the total.
This was followed by toll roads, which contributed P1.1 billion or 24 percent of the total; water, which contributed P0.8 billion or 17 percent; the hospital group which provided P190 million or 4 percent, and the rail, logistics and systems group, which delivered the remaining one percent, or P35 million.

MPIC president and chief executive officer Jose Ma. K Lim said the latest quarterly performance report showed that “consistent, thoughtful, and targeted investment pays off.”

“While it’s always pleasing to report growth in nominal profitability, the fact remains that our domestic toll roads portfolio and Maynilad are significantly under-recovering compared with the contractual provisions of their respective concessions,” Lim said, pointing to the pending tariff increase petitions.

“Robust growth in volumes in recent years does not in any sense change the need to bring these businesses into line with their agreed contract provisions,” he added.

Commenting on Maynilad’s arbitration award in Singapore, Lim said the appeal to the Singapore high court by the government was a “surprising setback,” noting that he doesn’t expect a resolution until November this year at the earliest.