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

Business World - - Corporate News - By Arra B. Fran­cia Re­porter

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.

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