MPIC core income more than doubles to P2.94 billion in first 9 months

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC), the local investment holding firm of Hong Kong-based conglomerate First Pacific Co. Ltd., said its consolidated core income more than doubled to P2.94 billion in the nine months ending September this year with the inclusion of Manila Electric Co. (Meralco) in its financial books and increased contribution from its water distribution and tollway businesses.

Net profit, which reflects net foreign exchange gain and other non-recurring losses of P347 million, expanded by 24 percent to P2.59 billion.

The strong financial results have prompted the company’s management to revise upward its income target to P3.5 billion this year from the earlier figure of P3.3 billion and the original forecast of P3 billion. This was the second time MPIC upgraded its income forecast owing to robust growth of most of its units.

“The positive results for the first nine months this year show that we are reaping the benefits of the investments made by the company over the past two-plus years and the very hard work of management and staff at MPIC and its operating units during this time,” said Manuel V. Pangilinan, chairman of MPIC.

Maynilad Water Services Inc. accounted for P1.8 billion or 43 percent of the total net profit contribution and 102 percent higher than the previous year on higher billed volume. Core net income rose 51.9 percent to P3.54 billion as revenues went up 15 percent to P8.85 billion.

Metro Pacific Tollways Corp. chipped in P1.1 billion, up 17 percent from P948 million due to increased average daily traffic.

For its first profit contribution, Meralco accounted for P1.8 billion or 43 percent of aggregate profit. The power retailing giant reported an 80-percent surge in core net income to P9.15 billion on the back of a 32-percent jump in revenues.

The Hospital Group, on the other hand, pumped in P125 million or three percent of total, a decline of five percent from P131 million a year earlier.

“The performance of Maynilad, MPTC and Meralco in the first nine months of this year reflects our focus on driving improved customer services, achieving operational efficiencies and lowering costs,” said Jose Ma. K. Lim, MPIC president and chief executive officer.

Meralco intends to capture a bigger share of the electricity business through delivering better service and venturing into power generation and retail electricity supply. To meet the anticipated supply demand of 11,900 MW in Luzon from 2011 to 2030, the company is initially targeting 1,500 megawatts of generating capacity by 2014.

Lim said Maynilad aims to bring down its non-revenue water level to 40 percent by 2012 by employing several state-of-the-art technologies and with the help of Miya Water, one of the premier NRW reduction experts in the world. As of end-September 2010, the utility firm’s NRW declined to 54 percent from 60 percent.

David Nicol, chief finance officer at MPIC, said the parent company is budgeting P20 billion for its capital expenditure program next year, slightly higher than the P17 billion earmarked this year. He said the company may resort to borrowing or use internally-generated cash to fund the massive projects of its toll road unit.

Construction of Segment 9, the first 2.4-kilometers of the planned extension of NLEX to MacArthur Highway, is expected to begin in the fourth quarter of 2011 while detailed engineering design of Segment 10, the final five kilometers extending NLEX from the MacArthur Highway to the Port Area, is now almost complete with construction scheduled to start in the second quarter of 2012.

For its hospitals business, MPIC plans to acquire two to three new medical centers next year while at the same time improving services and facilities of existing hospitals.

The Hospital Group posted aggregate core earnings of P341 million, down 19 percent from the year before due to the poor performance of the nursing schools across the group at Makati Medical, at Davao Doctors College, and at Riverside College in Bacolod owing to lower enrollees in these schools.

Metro Manila hospital operations also suffered due to the ongoing investments being made to upgrade facilities and equipment, lower patient admissions compared to the unusually high admissions in 2009 due to the H1N1 virus, and the loss of tax deductions on senior citizen discounts per new government regulations.

The Hospital Group now comprises Makati Medical Center, Cardinal Santos Medical Center and Our Lady of Lourdes Hospital in Metro Manila; Davao Doctors Hospital Inc; and Riverside Medical Center Inc in Bacolod.