Metro Pacific turns around with P3.9-M profit in Q1

After years of losses, Metro Pacific Corp. (MPC) finally posted a net profit of P3.9 million in the first quarter this year, a significant turnaround from the P59 million loss incurred during the same period a year ago.

The profit was attributed mainly to the improving profitability of subsidiaries Landco Pacific Corp. (Landco) and Pacific Plaza Towers (PPT) and reduced financing charges resulting from successful debt reduction exercises.

Consolidated revenues amounted to P760.1 million, up by 3.2 percent from P735.9 million in the same period in 2003. Operating expenses, on the other hand, decreased by nine percent to P130.4 million from P143.5 million a year ago as a result of strict cost reduction measures effected at parent and subsidiary levels.

Financing charges declined by 16.1 percent to P126.5 million compared with P150.9 million, due to the successful completion of various debt reduction and restructuring exercises.

These exercises, which also included reversals of certain financing charges, resulted in MPC realizing P126.5 million in net non-recurring gains during the period.

As of March 2004, MPC had successfully repaid, reached agreements in principle or advanced discussions addressing an aggregate of P12.1 billion in loans, representing 94 percent of total parent company bank debt of P12.9 billion as of end-Dec. 2001.

Landco Pacific Corp. reported a 79.2 percent growth in its first quarter profit this year to P8.6 million as against P4.8 million in the same period last year. Revenues likewise increased to P157.7 million as against P132.4 million a year earlier.

The improvement was attributed to increased revenues from lot sales at the expanding Punta Fuego and Leisure Farms divisions. At present, Landco is preparing for a further expansion of these successful offerings and is in various stages of negotiation and discussion for expansion sites and future landbanking.

Landco is actively working to further reduce certain medium and long-term debt obligations, the aggregate amount of which stood at P424.1 million as of end-December 2003.

Pacific Plaza Towers, meanwhile, incurred a net loss of P4.4 million in the first three months of 2004 or an inprovement of 85.3 percent over the previous year’s loss of P29.9 million.

MPC anticipates that PPT will achieve break-even status within the year.

MPC shipping unit Negros Navigation Co. Inc. (Nenaco) incurred a P15.6 million net loss in the first quarter this year as against a net profit of P10.5 million the previous year. This was due to reduced passengers and cargo carried during the period owing in part to a reduction in the number of vessels in service.

MPC is presently reviewing options for a repositioning of Nenaco, in line with its proposed rehabilitation program which is under review by the Manila Regional Trial Court.

In view of the 10-year rehabilitation timeframe, during which MPC expects little value enhancement of its investment in Nenaco, it has conservatively decided to make a provision of P828.9 million against the carrying value of its investment in Nenaco.

"Events at the Nenaco level are a disappointment to those who had believed in recent months that MPC’s fortunes had finally turned for the better. While there is a degree of short-term pain to be endured as a result of Nenaco, the broader outlook for MPC is encouraging.

Our core real estate business is resilient and we are taking steps towards an eventual strengthening of our financial foundation and preparing for new growth.

It is our hope to announce these tangible initiatives sooner than expected," MPC president and chief executive officer Jose Ma. Lim said.