Metro Pacific income rises nine-fold in first quarter

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC) reported a more than nine-fold increase in its core net income in the first quarter this year to P356 million, boosted by the inclusion of its toll road unit’s contribution and steady growth of its water and healthcare businesses.

MPIC, the local flagship of Hong Kong-based conglomerate First Pacific Co. Ltd., said net earnings, including non-recurring gains, reached P552 million or an increase of 69 percent from the previous level’s restated net income of P326 million. 

The 2008 numbers have been restated to reflect the impact of the International Financial Reporting Committee’s Interpretation 12 or “Service Concession Arrangements” on Maynilad Water Services Inc. and the non-consolidation of Landco Pacific Corp.

Maynilad, a joint venture between MPIC and DMCI Holdings Inc., earned P685 million during the period under review, chipping in P245 million to MPIC’s total net earnings.

Metro Pacific Tollways Corp., on the other hand, reported a 5.76-percent rise in net profit to P312 million, with core income attributable to MPIC at P309 million.

Combined, the Hospital Group (comprising the Makati Medical Center, Colinas Verdes Hospital Managers Corp. and a subsidiary of Medical Doctors Inc.), posted net earnings of P126 million, contributing P42 million to MPIC’s total income. Total revenues grew 46 percent to P1.055 billion from only P722 million last year.

Jose Ma. K. Lim, president and chief executive officer of MPIC, said the financial results reflect the company’s continuing growth story and value creation. “These encouraging results are indicative of a robust result for the year,” he said.

During the first quarter this year, Maynilad billed 81.5 million cubic meters, up 13.7 percent from 17.7 million cubic meters. With billed volume continuing to grow despite an effective one-percent reduction in supply, non-revenue water year-to-date improved to 61.6 percent from 66.5 percent in the same period last year.  

Maynilad is currently seeking a 15-year extension of its concession contract which is set to expire in 2022. An extension of the concession agreement will allow Maynilad to accelerate and raise the overall capex program over the extended life of the concession, and allow more flexibility to mitigate tariff adjustments in the future.

Meanwhile, the improved performance of MPTC was attributed to the higher than expected traffic of three percent as reported by Manila North Tollways Corp. and the higher contribution of Tollways Management Corp. (TMC). MNTC holds the concession to operate and maintain the North Luzon Expressway (NLEX) and is owned 67.1 percent by MPTC. 

The construction of the 2.7-kilometer toll road under Phase 2 Segment 8.1, linking Mindanao Avenue in Quezon City to NLEX in Valenzuela City started in April 2009. Following the awarding of the P 2.1-billion contract to Leighton Contractors (Asia) Ltd and Egis Projects Philippines, Inc, Segment 8.1 will be an alternative gateway to NLEX that will decongest the main Balintawak entry point during peak hours of traffic.

MPIC chairman Manuel V. Pangilinan said the company is confident its earnings will increase further this year in spite of a challenging business environment.

“The first quarter results of MPIC in 2009 – which were well ahead of 2008 – provide us with a great deal of optimism that our full year numbers will rise significantly compared with last year’s. Earlier this year, we gave guidance of core net income for 2009 at P1.2 billion versus P 347 million last year. However, it is likely that we will guide our 2009 core net income at a level higher than originally provided. We will have a clearer idea of our latest guidance profit number when MPIC announces its first six months results sometime in August of this year,” said Pangilinan.