MPIC’s H1 core profit down 38%

Metro Pacific’s NLEX tollroad PHOTO FROM MPIC.COM.PH

Infrastructure holding firm Metro Pacific Investments Corp. (MPIC) booked a 38-percent year-on-year drop in first semester net profit to P5.3 billion as coronavirus pandemic-related lockdown measures battered most of its businesses, especially during the second quarter.

For the second quarter alone, MPIC’s core profit declined by 62 percent year-on-year to P1.9 billion as the quarantine on Metro Manila and key regions reduced toll road traffic, mandated the suspension of rail services, and decreased commercial and industrial demand for water and power.

The hardest-hit businesses were those affected by either an outright suspension in the case of light railway or in the case of tollroads, due to movement restrictions during the lockdown, MPIC chief financial officer David Nicol said in a virtual press briefing on Wednesday.

“I’d like to think that we’ll see the bottom in the second quarter because that was really bad, starting late March. April was the worst. In May, we saw some green shoots of recovery and June was much better. July continued to be better,” MPIC chair Manuel V. Pangilinan said.

Once the modified enhanced community quarantine (MECQ) is relaxed, Pangilinan said MPIC’s businesses should likewise recover.

“We’re still hopeful that the second half profit picture will be better than the second quarter. And hopefully, there’s no third wave or fourth wave (of COVID19 infection) in the course of the year,” Pangilinan said.

In the tollroad business, Nicol noted that the slowest volume was seen in April, when vehicular traffic at the North Luzon Expressway (NLEx), for instance, slid to 47,000 daily from nearly 300,000 in February. By June, he said this volume had improved to 210,000 and further to 270,000 daily in July. The same recovery trend was seen for Manila Electric Co. (Meralco).

For Maynilad Water Services, although the water utility managed to maintain volumes in the first semester versus pre-COVID19 levels, Nicol said the surge in water volume delivered to residential households rather than commercial users gnawed on earnings. This is because the cost of residential tariff is typically subsidized by commercial users.

Meanwhile, power generation business Global Power held up well in the Visayas, as energy off-take was largely unaffected by the COVID19 crisis.

Six-month consolidated attributable net income slid by nearly 63 percent year-on-year to P3 billion for the first half, due to the lower core income alongside Meralco’s provisioning against the carrying value of Pacific Light Power, a gas-fired power plant in Singapore.

Power accounted for P5.2 billion or 68 percent of net operating income while water contributed P1.8 billion or 23 percent. Tollroads contributed P900 million or 12 percent, while MPIC’s other business – hospitals, rail, and logistics – incurred a loss of P236 million.

MPIC president Jose Ma. Lim said: “We have come through a difficult first half in decent financial shape.”

The company decided to maintain its interim dividend unchanged from 2019 at 3.45 centavos per common share.

“I am grateful to our talented management and thousands of dedicated front-line employees for their hard work in these difficult times. We have striven to keep everyone safe, encouraged people to work from home where they can, and done our best to protect and incentivize front line staff. Sadly, I must share that thirteen of our number have succumbed to COVID-19; I acknowledge their sacrifice and assure you we are doing all we can to support their families,” Lim said.

“The robustness of our operations, even in the depths of this crisis, reflects a decade and more of sustained capital investment that had been delivering continued expansion in our overall customer coverage up until the COVID-19 pandemic struck and the government imposed quarantines to save lives.”