MPIC core earnings rise 38% to P2.66B in H1

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC), the local flagship of Hong Kong-based industrial conglomerate First Pacific Co. Ltd., said its core net earnings grew 38 percent in the first half of the year to P2.66 billion, from P1.93 billion a year earlier, on robust growth across most of its business units.

In a financial report submitted to securities regulators yesterday, MPIC said its reported net income, which reflects a net foreign exchange loss and non-recurring losses of P701 million, amounted to P1.96 billion or 12 percent higher than the year before. Total revenues grew 19 percent to P10.59 billion from P8.86 billion.

Earnings per share inched up 9.5 percent to P9.54 from P8.71.

“The positive results for the first half this year reflect the strong operating efficiencies, highly focused customer service and strict cost discipline at all our portfolio companies. Reflecting our strong operating results during the period, we are guiding our core profitability for the year 2011 at P4.8 billion,” said MPIC chairman Manuel V. Pangilinan.

Maynilad Water Services Inc. accounted for P1.55 billion or 45 percent of total core net earnings. The utility firm posted a core net income of P2.96 billion, up 20.8 percent, as revenues climbed 13 percent to P6.62 billion due to the combined effect of a six percent increase in billed volume coupled with a basic tariff increase of 7.6 percent implemented halfway through the first quarter of 2011.

Non-revenue water (NRW) resulting from leakage and theft declined to 47.9 percent at end-June this year from 52.8 percent in the same period in 2010 as a result of aggressive leak repairs. The number of serviced customers went up 11 percent to 937,578.

Power utility giant Manila Electric Co. contributed P1.09 billion or 31 percent of MPIC’s total earnings. The volume of electricity sold by Meralco during the first half was slightly lower than a year ago at 14,781 gigawatt-hours as cooler weather tempered residential demand and the economic consequences of the March earthquake in Japan held back industrial consumption of power, even as commercial demand for electricity rose slightly. Distribution and other revenues increased 17 percent to P27.75 billion largely due to higher distribution tariffs.

Metro Pacific Tollways Corp., on the other hand, contributed P720 million or 21 percent of core net income. It core profit declined four percent to P725 million from P752 million due to the expiration of its income tax holiday at the end of 2010. Revenues, however, rose 12 percent to P3.27 billion mainly due to tariff increases and modest volume growth.

MPIC’s investments in the Hospital Group, meanwhile, contributed P99 million or three percent of the total. Aggregate core net income reached P247 million, up 38 percent on strong performances across the group. Strong progress was achieved by Cardinal Santos Hospital in growing its out-patient services while Makati Medical Center increased its total patient turnover.

The Hospital Group now comprises five full-service tertiary hospitals: Makati Medical Center, Cardinal Santos Medical Center, and Our Lady of Lourdes Hospital in Metro Manila; Riverside Medical Center Inc. in Bacolod; and Davao Doctors Hospital Inc. in Davao.

Jose Ma. K. Lim, president and chief executive officer of MPIC, said the recent fund-raising program puts the company in a much better position to seize new investment opportunities, particularly in toll roads. As of end-June, MPIC’s asset base stood at P14.24 billion, an increase of 26.3 percent from P11.27 billion a year ago.