Metro Pacific records P8.07-B loss in 1st half

Metro Pacific Corp., the local flagship of the First Pacific Group of Hong Kong, incurred an unaudited consolidated net loss of P8.07 billion for the first six months of the year, compared with a P1.1-billion loss for the comparable period last year.

The net result included a one-time extraordinary provision of P7.2 billion attributed to possible foreclosures on Bonifacio Land Corp. (BLC) shares pledged to various creditors. Without this exceptional provision, net loss would have been only P887.3 million or 18 percent lower than last year.

In documents filed with the Securities and Exchange Commission, Metro Pacific said: "The total provision reflects the difference between Metro Pacific’s carrying costs of the BLC shares and the amount of the principal and interest that will be paid for by those shares should foreclosures occur."

On June 4, 2002, a memorandum of agreement was signed between First Pacific and the Gokongwei Group allowing the foreclosure of 50.4 percent of the total BLC shares, which secured a $90-million Metro Pacific loan from Larouge B.V., a wholly owned subsidiary of First Pacific.

Metro Pacific has also pledged another 17.2 percent of its BLC shares to various creditors whose loans are now past due.

BLC is a joint venture between Metro Pacific and the Bases Conversion Development Authority.

Metro Pacific said "while there is no certainty that the First Pacific-Gokongwei transaction will be concluded or that the various creditors will foreclose on the BLC shares, management has made this one-time, non-cash provision to be conservative and in line with the new accounting standards."

Manuel V. Pangilinan, chairman and president of Metro Pacific, said: "The extraordinary provision we have made is a continuation of our conservative approach and bias for transparency and reflects our desire to be at the forefront in adopting international accounting standards."

The company, however, pointed out that this provision does not affect the book value of BLC, which was P20.6 billion as of end-June this year, and which 72.8 percent, with an equivalent book value of P15 billion, is owned by Metro Pacific.

As of June 30, 2002, Metro Pacific had reduced its debts by P1 billion from P11.9 billion at the end of 2001.

"I am confident that all the "cleaning up" and "workouts" we have done and will continue to do for the balance of 2002, will pave the way for a very different and hopefully positive 2003 for Metro Pacific," Pangilinan said.

Metro Pacific registered consolidated revenues of P3.2 billion for the first semester compared with P4.4 billion in 2001 which included a substantial, one-time transaction with respect to a bulk sale of Pacific Plaza Towers condominium units.

Consolidated gross margins rose 28 percent, reflecting revenue improvement and reduced expenses by subsidiaries Negros Navigation Co. and Landco Pacific Corp.