Metro Pacific back in the black in H1

Holding firm Metro Pacific Corp. (MPC) swung back to profitability in the first half of this year as it reported a net income of P93.9 million, a huge turnaround from the P8.07-billion net loss the past year.

MPC president and chief executive officer Jose Ma. Lim said the company’s return to profitability was a result of "achieving significant debt reduction progress, reducing expenses, and improving the performance of our individual business units."

The significant improvement in the firm’s earnings was also due to the one-time gains from various dacion-en-pago transactions effected by former subsidiary Bonifacio Land Corp. (BLC) to repay third-party debts.

Last April, MPC transferred its 50.4 percent interest in BLC to joint venture partners Ayala Land and Greenfield Development Corp. in exchange for the acquisition by the two parties of MPC’s $90 million loan from its sister company, the Netherlands-based Larouge B.V.

MPC said the P8.07-billion loss last year largely comprised provisions of P7.2 billion and made against impending losses from the anticipated sale of shares in BLC.

However, MPC said consolidated revenues during the period fell by 35.44 percent from P3.16 billion to P2.04 billion.

Also, cost of sales and operating expenses went down to P1.5 billion and P370.97 million, respectively, as a result of the deconsolidation of BLC from the group’s accounts.

Financing charges likewise declined by 44 percent to P443.2 million as against P803.4 million in 2002.

As of end-June this year, Lim said MPC had successfully repaid and reached agreements in principle or advanced discussions to repay P11.9 billion of its P12.8 billion total outstanding parent company debts.

He added MPC is hopeful it will achieve the successful resolution of its remaining P1 billion debt by the end of the year.

For his part, MPC chairman Manuel V. Pangilinan said: "Since late 2001, Metro Pacific’s revitalized management has undertaken difficult decisions in implementing their debt workout and business restructuring, requiring considerable understanding from the company’s creditors, investors and business partners, as well as sacrifice and hardwork of every Group employee."

MPC is hoping to end the year still in the black as it expects negotiations with creditors for the full repayment of its debts to be completed this year.

Among the remaining subsidiaries, Negros Navigation Co. reported a net income of P62.7 million, an increase of 19.4 percent from the P52.5 million earned the previous year. This was due to reduced overhead expenses, tax charges and stable performance from its passage and freight shipping divisions. Although revenues went down to P1.3 billion, overhead expenses were reduced to P129.5 million.

Landco Pacific Corp. registered a slight decline in its profits to P14.1 million from P16 million. Revenues, however, rose to P305.9 million from only P190 million. The marginal reduction was due to development costs related to the expansion of various real estate properties such as Leisure Farms and Punta Fuego in Batangas.

Pacific Plaza Towers, on the other hand, reported an unaudited net profit of P7.3 million on revenues of P246.1 million, due to new unit sales.

As it nears the completion of its debt reduction program, MPC will continue to improve further the robust performance of subsidiaries Nenaco and Landco.

"Our area of focus for 2003 will be to continue planning for the valuable real estate assets that Metro Pacific owns across the Philippines. From the 10.4 hectares in the Bonifacio Global City to prime resort areas in Luzon, Visayas, and Mindanao, it is our intention to remain a significant participant in the real industry for a long time to come," Pangilinan said.