MPIC posts lower net income in Q1

By James A. Loyola

Metro Pacific Investments Corporation reported that its consolidated core net income improved to P3.7 billion for the first quarter of 2019 from P3.6 billion in the same period last year.

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However, consolidated attributable net income declined by 7 percent to P3.5 billion in the first quarter of 2019 due to refinancing and share issuance costs plus various project expenses.

MPIC President and Chief Executive Officer Jose Ma. K. Lim said earnings were sustained by an 8 percent increase in operating contribution driven by substantial core net income growth from Manila Electric Company (MERALCO), continuing volume growth coupled with inflation-linked and basic tariff increases at Maynilad Water Service Inc., and strong patient census at its hospitals.

Power accounted for P2.7 billion or 54 percent of net operating income; tollroads contributed P1.1 billion or 23 percent; water contributed P0.9 billion or 18 percent; the Hospitals Group provided P242 million or 5 percent; and the Rail, Logistics and Systems Group contributed P7 million.

“Our 8 percent growth in contribution from operations reflects meaningful volume increases for most of our businesses following years of high investment and our continuing emphasis on operational efficiencies,” said Lim.

Pointing to MPIC’s ambitious investment program in the years ahead, Lim said, “the rise in our borrowing costs has largely offset the increased operating contribution as we continue to make significant investments in our new road, water, energy and logistics projects. These will take some time to complete and begin contributing to earnings.”

He noted though that, “progress on long-running differences with regulators over tariffs is helping MPIC’s bottom line.”

“We are seeing partial resolution of our long-pending tariff issues, particularly in our Water and Tollways businesses,” said MPIC Chairman Manuel V. Pangilinan.

He noted though that, “the shape of such resolution takes the form of staggered tariff increases and concession extensions, which makes us front-end the financing of our current expansion programs for Tollways and Water, and consequently pay upfront the financing costs associated with these.

Accordingly, the increase in our operating results has been largely absorbed by higher interest costs during the first quarter.”

Pangilinan added that, “continuing strong demand for the services we provide, against a backdrop of steady economic growth, underpins our optimism for 2019.”