Metro Pacific says on track to hit P15-billion core profit this year

METRO PACIFIC Investments Corp. (MPIC) is on track to end the year with around P15 billion in core net income, a singledigit increase from year-ago figures due to the expected slower growth in the fourth quarter.

“We’re saying that we think that fourth quarter will be pretty flat, and so you can see our core net income now is about P12 billion. And the last quarter added on to that you’ll get a number that’s roughly about P15 billion,” MPIC Chief Finance Officer David J. Nicol said in a press briefing in Makati City on Wednesday.

If realized, this would be a 6% increase from MPIC’s core net income of P14.1 billion posted in 2017.

“I expect minimal growth in Q4 core net income compared with the same quarter last year. We are working hard but constructively with government to resolve pending issues involving tariffs and rights of way,” MPIC Chairman Manuel V. Pangilinan said in a statement, referring to the government’s inaction on Metro Pacific Tollways Corp.’s (MPTC) pending petitions to raise toll fees and Light Rail Manila Corp.’s (LRMC) move to hike fares at the Light Rail Transit Line 1.

Problems involving right of way acquisition has also plagued some of the company’s infrastructure projects.

MPIC improved its core profit by eight percent to P12.2 billion in the first nine months of 2018, driven by its larger power portfolio, continued traffic growth in its toll roads, and the higher volume growth for its water unit.

System-wide revenues stood at P302.9 billion, 8% higher yearon-year.

The infrastructure conglomerate however noted growth was slower in the third quarter, particularly for the power unit due to weather disturbances. It noted that volume growth for power distributed in Luzon grew by only 2% in the third quarter, versus a 5% year-to-date growth. Meanwhile, power sold in the Visayas dropped by 3%.

Domestic toll road traffic meanwhile inched up by 4% in the third quarter, versus a 7% figure for the first nine months.

“The third quarter has showed a slowing down, or maybe a loss of some momentum... pretty much across the board there has been a reduction in volumes, but still quite strong for the year,” MPIC President and Chief Executive Officer Jose Ma. K. Lim said during the briefing.

“Partly weather disturbances, I think in the case of toll roads as well, because in the case of severe storms in some cases the power supply to a certain community is going to be shut off for safety. Part of it is also cooler temperatures,” Mr. Lim added.

MPIC’s power unit accounted for 55% of its core net income at 55% or P8.5 billion, followed by the toll roads business which provided 21% or P3.3 billion. Water generated 20% or P3 billion, hospitals contributed 4% or P586 million, while the Rail, Logistics, and Systems group posted P26 million.

The company’s power unit consists of the Manila Electric Company (Meralco) and Global Business Power (GBP). Meralco’s core profit went up by 9% to P16.7 billion during the period, thanks to a 5% uptick in energy sales backed by slightly lower tariffs.

Meralco’s better performance offset the 9% decline in GBP’s core net income to P1.9 billion, weighed down by depreciation expenses for its Panay power plant and higher costs, among others.

For the toll roads unit, MPTC recorded a 55% increase in system-wide vehicle entries to 916,169 per day, boosted by the contribution of PT Nusantara Infrastructure Tbk, its investment in Indonesia.

In the Philippines, average daily vehicle entries across the North Luzon Expressway, Cavite Expressway, and Subic-ClarkTarlac Expressway went up by 7% to 471,634.

The water unit through mostly Maynilad Water Services, Inc. booked a 10% increase to P6.1 billion, backed by a 6% increase in revenues to P16.6 billion.

Meanwhile, the hospital unit benefited from its investments in Jesus Delgado Memorial Hospital in Quezon City and St. Elizabeth Hospital in General Santos City last year. It recorded a 11% increase in out-patient visits and 15% uptick for in-patient admissions.

The railway unit through LRMC increased ridership at the LRT-1 by 5% to 452,892 by endSeptember.

Papa Securities Corp. Equity Investment Analyst Emille Martin Munsayac noted that MPIC’s earnings result is in line with their full-year estimate at 73%, but is ahead of consensus’ 83%.

“Revenues came in line with expectations but higher financing costs eased the bottomline. MPIC is guiding for minimal growth in 4Q,” Mr. Munsayac said in a text message.

Shares in MPIC slipped by 0.82% or four centavos to close at P4.86 each on Wednesday.

MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls.