Metro Pacific loses P1B in H1

Property conglomerate Metro Pacific Corp.’s net losses widened by 80 percent in the first half of 2001 as a result of higher financing charges, foreign exchange losses and booked losses of its affiliates.

In an unaudited report submitted to the Securities and Exchange Commission (SEC), MPC said consolidated net losses during the period amounted to P1.088 billion, much higher that the P603-million loss a year ago.

The MPC group include Fort Bonifacio Development Corp., Pacific Plaza Towers, Landco Pacific, Negros Navigation Co. and 1st E-Bank. Over the past two years, the parent company had disposed of several strategic, but non-property assets in line with its shift into a property development company, the flagship of which is the Bonifacio Global City being developed by FBDC.

Among those sold were wholly-owned subsidiaries Metro Bottled Water Corp., Metrolab Industries Inc. and Metrovet Inc.; packaging firm Steniel Manufacturing Corp.; and a sizable eight percent stake worth P12.1 billion in telecoms giant PLDT.

MPC said the higher losses was due to a the decline in net operating income, primarily a result of a P1.42-billion reduction in consolidated revenues following the completion of the anchor Big Delta portion of the Bonifacio Global City in April 2000 and the resultant full recognition of revenues in respect of the 1996 land sales of FBDC.

For the period, operating income dropped to P573 million, from P1.5 billion last year despite increased sales of Pacific Plaza Tower units and a 14 percent reduction in consolidated cost of sales.

However, MPC president and CEO Ricardo Pascua said the decline in revenues and net operating income were in line with expectations, having no significant land sales since 1996.

He said while only a small land sale took place last June, additional land sales can be expected before the year ends. In addition, he said the company was able to successfully refinance Bonifacio Land Corp.’s debt such that debt issues a BLC (the MPC-led consortium in FBDC) have been addressed.

"MPC's management will continue to pursue strategic options to better align MPC's debt to its revenue streams, including the proposed auction of the northern central business district (CBD) area, which together with other on-going initiatives are expected to realize significant cash proceeds," Pascua said.

After amassing P12.6 billion in cash from the sale of its non-property assets, MPC will lay low on new divestments this year and instead concentrate on enhancing the value of the remaining non-core holdings.

The proceeds from these divestments were primarily used to reduce the company's debts, which in 2000 was pared down 27 percent to P16.4 billion from P21.8 billion.

Company officials said their strategy for the remaining non-property investments – Nenaco and 1st E-Bank – would be anchored on "building value, strengthening operational teams, and developing and implementing new business plans."– Conrado Diaz Jr.