Metro Pacific reports P1.4-B loss for 2002

Metro Pacific Corp. (MPC) reported consolidated operating losses of P1.4 billion in 2002, a significant improvement from its P2.1-billion loss the year before.

This as MPC is expected to sign today a definitive agreement with Ayala Land and Greenfield Development Corp. wherein the two companies will pay $90 million in cash in exchange for a 50.4-percent-controlling interest in BLC, which owns MPC’s most valuable asset — the Fort Bonifacio Global City.

Ayala Land and Greenfield will assume a $90- million loan which MPC owes to another Hong Kong-based First Pacific Co. subsidiary, Larouge BV. The loan is secured by 50.4 percent of BLC.

Company officials attributed the improvement to significant progress realized from the company’s debt reduction and restructuring program, aggressive cost management, and improved performance of its individual business units.

MPC subsidiaries Negros Navigation Co. (Nenaco) and Landco Pacific Corp. generated profits last year while Fort Bonifacio Development Corp. (FBDC) and Pacific Plaza Towers were able to reduce losses.

The company also announced that it has made non-cash provisions totaling P10.6 billion, of which P8.7 billion represent parent company provisions against anticipated losses and the prospective sale of shares it owns in Bonifacio Land Corp. (BLC).

Based on its unaudited 2002 financial and operational results, MPC recorded consolidated net revenues of P5 billion for 2002, reflecting stable performance from the company’s primary real estate businesses and reduced financing and operating expenses. 2001 revenues of P6.8 billion principally resulted from a substantial, one-time bulk sale of condominium units at Pacific Plaza Towers.

Operating expenses declined 10.5 percent to P1.1 billion from P1.3 billion in 2001, due to strict cost management and manpower reduction programs implemented at both parent and subsidiary levels.

Financing charges went down to P1.4 billion, a reduction of 14.5 percent compared to 2001’s P1.6 billion, due to discontinuance of interest accruals on various loans at MPC and BLC, for which settlement agreements have been obtained, as well as successful debt reduction exercises completed at subsidiary levels.

As of Dec. 31, 2002, MPC’s consolidated assets stood at P58.6 billion, net of provisioning, from the year-end level of P70.5 billion. These assets are financed by consolidated shareholder’s equity of P28.5 billion and consolidated liabilities of P30.1 billion, of which P18.7 billion are interest-bearing.

Meanwhile, MPC subsidiary Negros Navigation Co. (Nenaco) posted an audited net profit of P102.2 million, a significant reversal from its 2001 loss of P1.8 billion. Officials said this is due to Nenaco’s reduction in financing charges of 52 percent. Net revenues improved to P2.35 billion in 2002 compared with P2.35 billion in 2001, reflecting the seven percent improvement in Nenaco’s cargo business.

Landco Pacific Corp. (Landco) likewise reported net profits of P26.1 million for 2002, a 335-percent improvement from its 2001 profit of P6 million. Net revenues rose 17 percent to P648.3 million in 2002 from revenues of P555.7 million in 2001.

Commercial rental income rose as the Landco Pacific Mall in Legazpi City was completed and 100 percent leased by mid-2002. Financing charges reduced by 57.5 percent to P55.7 million from P131.2 million in 2001. FBDC reported an unaudited net loss of P463 million for 2002 compared to a 2001 loss of P1.5 billion, a figure that included a variety of asset impairment provisions. Majority of FBDC’s P1.7 billion 2002 revenues were derived from new lot sales and increased commercial lease income, from the redevelopment of the Fort Square and expansion of the Bonifacio Stopover projects.

Pacific Plaza Towers recorded a minimal unaudited loss of P42.9 million, reflecting continued softness in the luxury condominium market, which resulted in lower sales. During 2002, PPT realized significant occupancy of owner-occupied units, and initiated an aggressive marketing program, to be accelerated in 2003, aimed at key niche markets in the United States and Asia, where considerable sales interest has been generated. – With Conrado Diaz Jr.