MPIC pins hopes on new investments

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC) is banking on new investments in infrastructure such as airports, tollroads and light rail transit  as well as waste management and green energy,  to spur faster growth as it seeks to triple dividend payments to investors by 2015.

MPIC chief financial officer David Nicol said the company is looking for “new investments and new partners to work with, to develop the country’s infrastructure and make good financial returns for our shareholders.  We want to triple dividend payout in 2015 compared with the 2011 level,” he said.

The dividend payout ratio is defined as the percentage of earnings paid to shareholders in dividends. It is usually calculated by dividing the yearly dividends per share by the company’s earnings per share.

Dividend payout ratios are generally a very rough indicator of financial health, since these ratios do not take into consideration the rate of reinvestment, debt reduction, or the maturity of the company’s business interests and investments.

Most new companies have low dividend payout ratios due to the necessity for reinvestment of profits into the core business or debt reduction activity. As companies mature and gain financial stability, dividend payout ratios increase commensurately.

Nicol said MPIC expects an earnings boost from the connector road project, new hospital acquisitions, and new planned investments.

The group, through Manila Electric Co., (Meralco) is exploring the use of waste as a source of renewable and sustainable energy to reduce reliance on foreign energy. This activity helps reduce emissions that cause climate change because landfill-gas-to-energy projects involve capturing methane (a greenhouse gas), while waste-to-energy activities displace fossil fuel sources and lower landfill methane emissions.

Meralco signed in August a power supply agreement with the operator of the methane-fired generating plant in the Payatas landfill.  Under the deal, Meralco will purchase power from a methane plant for two years under a take-and-pay arrangement.

MPIC earlier teamed up with Ayala Corp. to bid and develop light rail projects in Manila.  The government earlier announced plans to offer as many as 18 projects worth more than P200 billion to companies this year as part of efforts to prop up the economy.

The local flagship of Hong Kong-based First Pacific Co. Ltd. also earlier signified its interest to bid for Manila’s 30-year old international airport which the government intends to sell for as much as $2.5 billion.

Manila North Tollways Corp.,(MNTC) a unit of MPIC, is  hoping a favorable decision from the government with respect to  its improved offer for the P20 billion concession to operate the Subic-Clark-Tarlac Expressway amid reports that the government may opt for the rebidding of the contract in spite of a signed agreement with the MNTC.

Once it gets the concession agreement, MNTC intends to invest P600 million just for the integration of the various tollways including the North Luzon Expressway and the SCTEX so it will become seamless and motorists will no longer have to make stops between Quezon City and Tarlac.

The group intends to invest a total of P20 billion until 2043 for road improvements, lighting, signages and other facilities to improve the safety of the highway.

MPIC is also still keen on taking over the rehabilitation of the Metro Rail Transit-3.  It submitted in August a new proposal to expand the train’s capacity as quickly as possible.