MPIC core profit flat, net income lower

By James A. Loyola

Metro Pacific Investments Corporation (MPIC) reported that its consolidated core net income inched up 2.5 percent to P12.5 billion for the first nine months of 2019 from P12.2 billion in the same period last year.

However, consolidated reported attributable net income declined 5 percent to P11.8 billion in the first nine months of 2019 due to P695 million of nonrecurring expenses in contrast with a P297 million gain in 2018. Nearly all of this swing was due to foreign exchange translation losses in 2019 versus gains in 2018.

MPIC said core earnings were lifted by improved financial and operating results of the constituent companies, which translated into a 6 percent increase in operating contributions.

It noted substantial core net income growth from Manila Electric Company (MERALCO); higher volumes and tariffs at Maynilad Water Services Inc.; (iii) continued traffic growth on its domestic toll roads; and strong patient numbers at its hospitals.

MPIC said all these combined to offset higher interest costs.

Power accounted for P9.0 billion or 55 percent of net operating income; Tollroads contributed P3.7 billion or 22 percent; Water contributed P3.2 billion or 19 percent; and the Hospitals Group provided P681 million or 4 percent of the total.

“Our 6 percent growth in contribution from operations is due to meaningful volume increases in our businesses, and the quality of our management in raising operating efficiencies,” said MPIC President and Chief Executive Officer Jose Ma. K. Lim.

He noted that, “we invest substantially to grow our businesses and our colleagues consistently work hard to deliver better services and stronger returns.”

“The improvement in our operating results has been reduced by higher interest costs. Moving forward this will be ameliorated by the benefit of our recently announced transaction for the hospitals business. The process of raising funding for MPIC is continuing with further portfolio rationalization to be announced in the coming months," said MPIC Chairman Manuel V. Pangilinan.

He added that, “at this stage I expect our full year Core Income to be moderately ahead of 2018. Our absolute focus in the near-term is to raise liquidity to reduce our debts and our financing cost, and over the medium term to continue to build out the many new infrastructure assets we are currently working on.”