MPIC sustains strong growth momentum

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC) sustained its strong growth momentum with profit rising 20 percent to P11.5 billion last year on higher earnings from its tollroad and hospital units as well as the first full-year contribution of the railway business.

The company reported a 17-percent jump in core net income to P12.1 billion, lifted by robust traffic growth on its tollroads, an expanded power portfolio, continuing growth in the hospital group, and a profitable entry into the logistics sector.

“ The strong results for 2016 reflect our continuing expansion of investment, steady improvements in service levels and some financing efficiencies for our operating companies,” said MPIC chairman Manuel Pangilinan.

 “The overwhelming demand for the services we provide, against the backdrop of strong economic growth, underpins our outlook for 2017,” he added.

Pangilinan said it was too early to give earnings guidance for the year as the company continues to be hobbled by long-pending tariff issues.

In terms of contribution to the firm’s net operating income, power accounted for P7.2 billion or 48 percent of the total, water (P3.6 billion), tollroads (P3.5 billion), hospital (P589 million), and the rail, logistics and systems group (P234 million).

Despite the holding firm’s strong performance, MPIC president Jose Ma. Lim said  shareholders remain legitimately concerned about the continuing delay in resolving various tariff issues left over from the previous administration.

“Discussions with the new administration continue and there is agreement that our capital expenditures are essential and that contracts will be honored. However, I have as yet no timetable for resolution of these issues although the matter looks promising,” Lim said.

Under the term of then president Benigno Aquino, MPIC had sizeable pending tariff adjustments which include a 20- percent increase for the North Luzon Expressway and 32 percent for the closed system, Manila-Cavite Expressway (25 percent) Subic-Clark-Tarlac Expressway (48 percent).

Lim said he expected continued strong volume growth this year.

Manila Electric Co. saw its core net income rise four percent to P19.6 billion mainly due to an eight-percent increase in electricity consumption and higher interest income.

Global Power, in which MPIC holds an effective stake of 47.8 percent, reported a core net income of P2.8 billion. It is the leading power supplier in the Visayas region and Mindoro Island.

Maynilad’s core net income, on the other hand,  decreased 26 percent to P7.2 billion mainly due to the expiration of Maynilad’s income tax holiday in December 2015.

Core earnings of MPTC climbed 27 percent to P3.3 billion.

Metro Pacific Hospital Holdings Inc. grew 34 percent to P1.8 billion, driven by new hospital acquisitions, lower interest expense, and increasing revenues across the company’s existing hospitals.

MPHHI president and CEO Augusto Palisoc Jr. said the company is targeting to have at least 10 hospitals in five years.

It also plans to put up a children’s hospital as one of its greenfield projects, possibly in Metro Manila.

The hospital unit entered into a joint venture with  Spanish Group, OSI Sanitas to grow in the primary healthcare clinic space.

Light Rail Manila Corp., meanwhile, contributed P278 million to MPIC’s core income in 2016 reflecting increased ridership as a result of the rehabilitation of light rail vehicles together with operating cost savings and deferred capex spending, some of which are due to government’s delay in the acquisition of rights of way.

MPIC has raised its capital expenditures to P79 billion this year from P40.5 billion in 2016 to boost  its toll road and power businesses.

Of the P79 billion, P23-P24 billion will go to toll roads, P22 billion to Manila Electric Co.  and P13 billion to Maynilad.