Metro Pacific loses P686M in 2006

Metro Pacific Investments Corp. (MPIC), the debt-free local holding company of Hong Kong conglomerate First Pacific Co. Ltd., incurred a net loss of P685.9 million last year due mainly to provisions made at Metro Pacific Corp. and other investments.

In a disclosure to the Philippine Stock Exchange, MPIC said it made provisions of P415 million for its Costa de Madera property, P110.7 million for losses incurred in the divestment of shipping unit Negros Navigation Co., and various other write-offs totaling P160.2 million.

Metro Pacific last year implemented a reorganization program which involved the transfer of its shareholdings in its various units to MPIC, which was created for that purpose as a debt-free company.

"It’s important to place MPIC’s 2006 results in their proper context. Last year, we effected a final clean-up of Metro Pacific’s old accounts in order that MPIC could start 2007 without the financial baggage of the past," said MPIC president and CEO Jose Ma Lim in a statement.

Lim, however, expressed confidence that Metro Pacific Corp. will perform better this year, saying the first two months already resulted in a net profit, derived from its share in a joint venture with D.M. Consunji Inc. as well as improved results from its real estate business.

"All the indications are in place that MPIC will have a successful year and we are confident that MPIC, the successor to Metro Pacific Corp., will record real profits every quarter in 2007. We are making smart investments in businesses with strong, long-term growth potential and in which our experience in effecting corporate turnarounds and financial rehabilitations will result in building new value for our shareholders," Lim said.

MPIC and DMCI Holdings Inc. last year won the bidding for the government’s 83.9-percent stake in Maynilad Water Services Inc, which holds the water distribution rights to the western part of Metro Manila. "We’re pleased with the progress we’ve made at Maynilad in only such a short amount of time. DMCI brings a significant degree of technical and engineering experience to our venture, and complements the experience MPIC has had in effecting successful corporate rehabilitations and financial turnarounds," said Lim.

"We believe that as the culture of MPIC begins to cascade throughout the Maynilad organization, change will accelerate and Maynilad will become a company respected for its credibility and profitability," Lim further said. Lim added that property subsidiary Landco has tied up with the Villalon family to develop Cebu’s ultimate residential and leisure estate, similar to landmark projects such as Peninsula de Punta Fuego and Terrazas de Punta Fuego. MPIC will also subscribe to P600 million worth of convertible notes to be issued by the Makati Medical Center, making it the biggest shareholder of the hospital as the investment is equivalent to a 33-percent stake. Makati Med is chaired by PLDT chairman Manuel V. Pangilinan.

"We believe our investment in Makati Med is a smart move at a time when the need from both domestic and foreign patients for world-class facilities is growing across Southeast Asia," Lim said.

"Our mandate for MPIC this year is growth and increased profitability. We have a good core to start from and we’ll be actively seeking to acquire additional businesses to enable MPIC to become a major participant in the utility, infrastructure and power sectors of the Philippines. These are among the most critical industries a rapidly developing nation needs for its economic health, and we regard these sectors as offering excellent potential for long term value creation," Pangilinan said.