MPIC ends 2015 with higher profits despite regulatory uncertainties

MANILA, Philippines – Metro Pacific Investments Corporation (MPIC), the listed infrastructure conglomerate chaired by tycoon Manuel V Pangilinan, saw its full-year net income in 2015 jump on strong performance across all subsidiaries, despite uncertainty in tariff rate adjustments for its water, rail, and toll road businesses.

MPIC told the Philippine Stock Exchange (PSE) on Tuesday, March 1, that its net income surged by 19.89% in 2015 to P15.07 billion ($318.16 million) from P12.57 billion ($265.38 million) in 2014.

“Our strong earnings growth reflects our intense focus on operational efficiencies but at the cost of years of elevated capital expenditures,” MPIC president and CEO Jose Maria Lim said in a disclosure.

Meanwhile, MPIC’s core net income for 2015 grew by 22% to a record P10.3 billion ($217.54 million) on strong volume growth across all core subsidiaries.

MPIC said strong growth was achieved despite uncertainties in tariff rate adjustments for its water, rail, and toll road businesses.

“Our earnings – and our ability to finance infrastructure build which this country so badly needs – would be still stronger, if we were simply allowed to play on a level regulatory playing field,” Lim said.

The statement also summarized contributions of the corporation’s 4 main business lines:

• 38% or P4.8 billion came from Maynilad Water Services, Incorporated;
• 36% or P4.5 billion from Manila Electric Company (Meralco);
• P2.8 billion from toll road businesses; and 
• P473 million from hospital businesses

“All our businesses are fully focused on service quality and operational efficiency, while at the same time growing our sales and core profitability to improve the lives of all our customers,” MPIC chairman Pangilinan said.

Upbeat outlook

For 2016, Pangilinan expects Metro Pacific to sustain its growth momentum as the company is prepared to spend P70 billion ($1.48 billion) in capital expenditures to support the expansion projects of core subsidiaries.

Including other Philippine companies under First Pacific, like Philippine Long Distance Telephone Company, Philex Mining Corporation, and Roxas Holdings Incorporated, total capital spending is set at P120 billion ($2.53 billion).

“Whilst it may be rather early to provide earnings guidance for 2016 – given continuing regulatory uncertainties and the impending change in government starting July – we have maintained a positive outlook for the year,” Pangilinan said.

“Despite the accumulated regulatory risks associated with delayed tariff progression and other issues in water, roads, and now light rail, we remain committed in our support of the PPP program under this government and beyond it,” Pangilinan added. – Rappler.com

$1 = P47.35