MPIC income climbs 18% to P4.6 B in H1

MANILA, Philippines - Infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) is expecting its core net income to pierce the P8-billion mark this year on the back of the improving performance of all its operating units.

Strong revenue growth in the first half will continue across-the-board as sales improve and new investments start contributing to the performance, company executives said yesterday.

“At this stage, we are guiding to P8-billion core net income for the full year – mindful however of the regulatory uncertainties surrounding our core subsidiaries,” said MPIC chairman Manuel V. Pangilinan.

MPIC’s core net income, which strips out currency and derivatives-related items, jumped 10 percent to P7.2 billion in 2013 from P6.6 billion a year ago, exceeding the profit guidance of P7 billion.

In the first semester this year, consolidated core net profit climbed 18 percent to P4.6 billion from P3.9 billion last year while consolidated revenues rose nine percent to P16.6 billion from P15.3 billion.

“The strong results for the first half of the year reflect the continuing improvements in service levels as well as efficiency and financing gains for our operating companies,” Pangilinan said.

“This progress in profitability is encouraging despite a difficult regulatory environment,” he said, adding that delays in tariff increase on the toll roads, the uncertainty surrounding Maynilad Water Services Inc. arbitration, and ongoing uncertainty on power prices are starting to constrain investments in critical areas.

The improvement in core net income was driven by the robust earnings growth at Metro Pacific Tollways Corp. (MPTC), arising from strong traffic growth and increased shareholding in Manila North Tollways Corp; growth at Maynilad and Manila Electric Co. (Meralco) due to moderately higher water and energy volumes sold; and strong organic growth and the benefit from new investments in the hospital group, MPIC said.

“This shows a strong underlying performance from each of our operating companies,” said MPIC president and CEO Jose Ma. K. Lim.

In terms of contribution to MPIC’s net operating income, Maynilad accounted for 41 percent or P2.2 billion, followed by Meralco (33 percent or P1.8 billion), MPTC (21 percent or P1.1 billion) and the hospital group (five percent or P294 million).

MPIC’s consolidated reported net income gained 15 percent to P4.2 billion from P3.7 billion. This includes a P394-million non-recurring charge composed of taxes incurred on the reorganization of the hospital group and one-time separation expenses as a result of Maynilad’s redundancy and right-sizing program.

“All our businesses achieved strong growth in profitability, helped in large measure by debt refinancing last year,” Lim said.

For the second half, billed water volume will likely grew five percent while electricity sales is seen to improve two percent, Pangilinan said.

For this year, MPIC allotted P44.5 billion for capital expenditures: P18 billion for Maynilad, P7 billion for the tollroad, P15.5 billion for Meralco and P3-4 billion for the hospitals.