MPIC prof its plunge 63% as virus disrupts operations

METRO PACIFIC Investments Corp. (MPIC) reported a 63% earnings cut in the six months to June as measures to contain the coronavirus outbreak hit the demand and operations of all its business segments.

In a statement on Wednesday, MPIC said the group’s attributable net income stood at P3.03 billion, down from P8.12 billion the same period last year.

Its core income contracted 38% to P5.34 billion as consolidated operating revenues slid 17% to P30.71 billion.

By business unit, the power segment contributed P5.22 billion in operating income, down 14% from last year. This accounts for the operations of Manila Electric Co. and Global Business Power Corp., which saw 43% and 9% lower incomes to P106 billion and P1.1 billion, respectively.

Profits from the water business fell 21% to P1.81 billion, largely coming from the contributions of Maynilad Water Services, Inc., which declined 22% to P3.6 billion.

In both the power and water businesses, profits declined due to the slowdown in commercial and industrial demand as the government implemented strict stay-at-home protocols to arrest the virus outbreak.

Contributions from the toll roads unit dropped 62% to P915 million, as volume on MPIC’s expressways were significantly reduced when nonessential travel was prohibited.

The light rail segment suffered the most as it swung to a P175-million core net loss, attributable to the forced closure of the Light Rail Transit Line 1 for more than two months.

Other investments such as in hospitals and logistics posted a consolidated net loss of P128 million.

“We have come through a difficult first half in decent financial shape… I anticipate subdued economic activity to persist for at least the rest of the year,” MPIC President and CEO Jose Ma. K. Lim said in the statement.

In a media briefing, Mr. Lim said the company remains committed to make investments that will help the Philippine economy recover, but “not to the extent that we have to take on additional leverage on MPIC.”

“With respect to new projects, we have deferred because the market is changing. We have to get some clarity as to how tourism and the hotel business can come back in the future,” Mr. Lim said. “The thrust of MPIC is to continue to conserve cash and to use it wisely.”

The reimposition of strict quarantine measures is also being observed by the company, but MPIC Chairman Manuel V Pangilinan said he remains optimistic the second half will be better than the second quarter.

“We’re reluctant to give a guidance in terms of the full year. Perhaps we could give you a better picture when we release our third-quarter results,” he said in the briefing.

Despite the first-half turnout, investors are expected to focus on the company’s outlook for the next months instead, as many have already anticipated second-quarter earnings to dip, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said.

“Given the weak economy we still have right now, and the reintroduction of (stricter quarantine) in selected areas in Luzon… earnings for the conglomerate are projected to remain challenged,” he said in a text message. “Thus, we see a downward bias with its share price.”

Shares in MPIC closed at P3.11 each on Wednesday, up four centavos or 1.30% from a day ago.

Meanwhile, MPIC said in the briefing it is helping the government-owned East Avenue Medical Center build a 220-bed facility dedicated to coronavirus disease 2019 (COVID -19) patients.

“We have been in touch with the Department of Health… for the development of a COVID facility in East Avenue Medical Center,” said Pilar Nenuca P. Almira, president and CEO of Cardinal Santos Medical Center, which is under the MPIC hospitals group.

She said the hospital will shoulder the infrastructure, while MPIC is expected to provide hospital equipment estimated to cost P35 million-P45 million.

“The list is already with us and it’s now our turn to make sure that this list is validated and provide them the support that we can afford. Our group chair, Mr. Pangilinan, has committed to help,” Ms. Almira added.

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. —