MPIC not keen on listing Maynilad

MANILA, Philippines - Metro Pacific Investment Corp. (MPIC), which holds a majority stake in Maynilad Water Services Inc., is not too keen on listing the West Zone concessionaire on the stock exchange and would rather take in a strategic player.

“We have reservations about spinning it off. If we will take Maynilad public, my observation of that is not for the foreseeable future. We don’t think that will be the best value/opportunity for MPIC shareholders,” said David Nichols, chief finance officer of MPIC.

Nichols said Maynilad is MPIC’s fastest growing business, contributing P1.28 billion or 46 percent of the group’s aggregate net profit in the first half this year.

In terms of revenues, Maynilad chipped in P5.86 billion for the January to June 2010 period, up 23.6 percent from the previous level’s contribution of P4.74 billion.

“If we were ever to sell down our position, which we will do in conjunction with DMCI, I believe the best value for us is to bring in a new strategic player who I think will pay much more to come in than the public markets would rate it,” Nichols said.

Maynilad reported a core net income of P2.45 billion in the first six months of the year, 87 percent higher than the year before on the back of a 24-percent growth in revenues.

Total revenues rose to P5.86 billion as the number of serviced customers increased by nine percent to 846,682 billed clients, from 777,160 a year earlier.

Maynilad has budgeted P1.5 billion for an aggressive non revenue water (NRW) reduction program which includes active leak repairs and district metered areas establishment and maintenance. It aims to bring down its NRW level to 40 percent by 2012.

The utility firm was able to resolve 34,390 leaks in the period under review compared to only 10,828 leaks in 2009. The 217-percent increase in resolved leaks translated to nearly 109 million liters a day (MLD) of recovered water.

Maynilad is the first Asian water utility company to use the state-of-the-art Sahara Mobile leak detection unit.

Maynilad serves seven million customers in Manila (except portions of San Andres and Sta. Ana), parts of Quezon City and Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon. It also operates in Cavite City, Bacoor, Imus, Kawit, Noveleta and Rosario in Cavite province.

State regulator Metropolitan Waterworks and Sewerage System extended the water concession contract of Maynilad by 15 years to 2037.

With the extension, Maynilad has increased its capital spending to P564 billion from an original P206 billion in capital investment it submitted in 2008 to expand and improve its services.