By JAMES A. LOYOLA
Metro Pacific Investments Corporation (MPIC) reported a 4 percent improvement in consolidated core net income to a record ₱15.6 billion in 2019 from ₱15.1 billion a year earlier.
In a disclosure to the Philippine Stock Exchange, the firm said “Improved financial and operating results of the constituent companies delivered a 7 percent increase in contribution from operations.”
Key factors included: substantial core net income growth from Manila Electric Company (MERALCO); continued traffic growth on its domestic toll roads; and strong patient numbers at its hospitals.
Power accounted for P11.6 billion or 55 percent of net operating income; Tollroads contributed ₱5.2 billion or 25 percent; Water contributed ₱3.6 billion or 17 percent; and Hospitals provided ₱867 million or 4 percent of the total.
The Rail, Logistics and other businesses combined for a net loss of ₱352 million. Higher interest costs on borrowings made to finance capital expenditures for growth held down core income growth relative to contribution.
Consolidated reported attributable net income rose 69 percent to ₱23.9 billion in 2019 which includes a non-recurring income of ₱8.3 billion primarily due to deconsolidating the Group’s investment in the Hospitals portfolio partly offset by restructuring costs for its logistics business and a reduction in the carrying values of some of its water investments.
By contrast, 2018 non-recurring expenses of ₱930 million were primarily due to the net effect of Peso weakening, project write-downs, loan refinancing and provisions for asset impairment.
“Our 7 percent growth in contribution from operations reflects a decade and more of sustained capital investment to enable meaningful volume increases in all our major businesses,” said MPIC President and Chief Executive Officer Jose Ma. K. Lim.
He noted that, “The continued expansion in our overall service coverage and attempted constructive engagement on tariffs has not endeared us to the Government, which now deems various long-established and operationalized contracts as having onerous provisions.”
“Meanwhile, the fall in our share price, along with the prices of other listed companies with Government concessions, shows that despite our growth investors now attach sharply higher risk premiums for Government adherence to contract,” Lim pointed out.
MPIC Chairman Manuel V. Pangilinan said that, “In these circumstances, questions have been raised regarding investment in Philippine- regulated infrastructure and the sources of capital to support this.”
“Meanwhile, we are committed to completing our current projects while directing discretionary investment to warehousing, real estate and tourism,” he added.