Fresh investments pulled down MPIC profit in H1
Infrastructure holding firm Metro Pacific Investments Corp. (MPIC) saw a 9-percent year-on-year drop in first semester net profit to P8.1 billion as financing cost for new investments offset a modest growth in core earnings.
Excluding one-off items, MPIC’s core net profit improved by 1.2 percent year-on-year to P8.7 billion on higher earnings contributed by its power, toll road, water and hospital businesses.
For the second quarter alone, net profit stood at P4.6 billion, lower than the P5.1-billion profit chalked up in the same period last year.
In a press briefing on Thursday, MPIC president Jose Ma. Lim said the growth in core income was absorbed by financing costs needed for new investments. The group has been investing in new toll road, railway, water, energy and logistics projects.
“The process to raise funding for MPIC as well as for our hospitals group to support its continued expansion is proceeding well. Once this is completed within the year, we should see a reduction in MPIC’s interest cost and a consequent improved translation of operating profit growth into the bottom line,” MPIC chair Manuel V. Pangilinan said.
Pangilinan noted MPIC was already seeing the impact of the resolution of long-pending tariff issues, particularly in the water and tollways businesses.
“The shape of such resolution has taken the form of staggered tariff increases and concession extensions, which means front-ending the financing of our current expansion programs for tollways and water, and consequently absorbing the financing costs associated with these. Accordingly, the increase in our operating results has largely been absorbed by higher interest costs during the first half of the year,” Pangilinan said.
“Continuing strong demand for the services we provide, against a backdrop of steady economic growth, underpins our optimism for 2019. Our absolute focus over the medium term is to build out the many new infrastructure assets we are currently working on in order to further improve our services to the communities, and enhance profitability, earnings per share, and the net asset value of MPIC,” he added.
During the six-month period, MPIC booked P560 million in nonrecurring expenses as compared to last year’s gain of P341 million. About P745 million of this swing was due to foreign exchange translation losses in 2019.
Power business accounted for P6.1 billion or 54 percent of net operating income, while toll roads contributed P2.4 billion or 22 percent. Water contributed P2.3 billion or 21 percent and the hospitals’ group provided P400 million or 3 percent. —DORIS DUMLAO-ABADILLA
