MPIC eyes slightly bigger earnings after pandemic shock

MANILA, Philippines (Update 1, 8:30 p.m.) — Metro Pacific Investments Corp. (MPIC) is out to boost earnings this year, and return to pre-pandemic strength next year after the unprecedented health crisis tarnished its balance sheet in 2020.

In a briefing, MPIC announced gunning for P12 billion in core net income.

This was after excluding extraordinary financial gains, core net income of Pangilinan-led infrastructure conglomerate fell 34% year-on-year to P10.2 billion "owing largely to the economic contraction brought about by the COVID-19 pandemic," a stock exchange disclosure said on Monday.

MPIC said the pandemic-induced slump and restrictions placed to arrest virus contagion reduced traffic in its toll roads and limited light rail services. Business closures also hit demand for water and power, its two other major ventures.

As a result, contributions from operations dropped 26% year-on-year. "(E)arnings – for the first time in our history – have been less than ideal," Lim was quoted as saying in a statement.

Dissecting the company's financial report, contributions from MPIC's power businesses — Manila Electric Co. (Meralco) and Global Business Power Corp. (GBP) — amounted to P10.5 billion last year, representing 69% of the conglomerate's total earnings. 

Broken down, net income of Meralco, the country's largest power distributor, plummeted 30% year-on-year to P16.3 billion, while GBP, a power producer in Visayas, reported a core net income of P2.4 billion, down 13% annually.

Water, on the other hand, contributed P3.1 billion last year, or a share of 20%. Under this segment, core net income of west zone concessionaire Maynilad Water Services Inc. sagged 15% on-year to P6.5 billion due to low demand.

Toll roads cornered a smaller share of 16% of core net income last year, financial results showed. For this venture, Metro Pacific Tollways Corp., operator of major expressways such as NLEX and CAVITEX, among others, saw core net profits slide 49% year-on-year to P2.7 billion.

The decline was traced from a 28% slump in vehicle entries last year when lockdowns limited public transport operations that remain at 50% of typical capacity today.

Finally, MPIC's other businesses, mainly hospitals, light rail and logistics, incurred an overall loss of P709 million, figures showed.

"We have come through the most difficult year we have ever seen as the operations of our portfolio companies have been significantly affected by the pandemic," Lim said. 

"It is difficult to ascertain the pace of growth in economic activity so we believe it is prudent to ensure that our financial position is robust and can sustain operations and expansion even in a prolonged period of recovery,” he added.

For his part, Manuel V. Pangilinan, chairman, said he is seeing a "gradual recovery" in business this year. "We recognize the impact of the pandemic to our 2020 results. However, it should strongly be noted that we remained steady in investing for the future," he said.

On Wednesday, shares in MPIC inched up 0.99% to close at P4.09 each, outperforming the main index's 0.34% gain.

Editor’s note: Story amended to clarify this year’s target is P12 billion, not P20 billion as earlier stated.