METRO Pacific Investments Corp. (MPIC) said its core net income was flat during the first quarter of the year to P3.7 billion, from the previous year’s P3.6 billion as the rise in borrowing cost dented its profitability.
Attributable net income fell 7 percent to P3.54 billion, from the previous year’s P3.81 billion.
The company said it had an 8-percent increase in operating contribution driven by substantial core net income growth from Manila Electric Co., continuing volume growth coupled with inflation-linked and basic tariff increases at Maynilad Water Service Inc. and strong patient census at its hospitals, all of which combined to offset higher interest costs.
“Our 8-percent growth in contribution from operations reflects meaningful volume increases for most of our businesses following years of high investment and our continuing emphasis on operational efficiencies,” MPIC President and CEO Jose Ma. K. Lim said.
“The rise in our borrowing costs has largely offset the increased operating contribution as we continue to make significant investments in our new road, water, energy and logistics projects. These will take some time to complete and begin contributing to earnings,” Lim said.
Power accounted for P2.7 billion or 54 percent of net operating income; toll roads contributed P1.1 billion or 23 percent; water contributed P0.9 billion or 18 percent; the hospitals group provided P242 million or 5 percent; and rail, logistics and systems group contributed P7 million.
“In water, following a constructive and professional rate rebasing in 2018, the Metropolitan Waterworks and Sewerage System [MWSS] approved a 5.7-percent inflation-linked tariff increase on January 1, 2019. This is good news, but unfortunately, the rebasing didn’t address the corporate income tax recovery issue inherited from the previous administration, which we continue to pursue,” Lim said.
“We are now implementing new toll rates for the North Luzon Expressway [Nlex] and have published the new toll rates for the Subic-Clark-Tarlac Expressway [SCTEx] which both address part of our pending tariff issues, albeit also on a staggered basis. We are also awaiting the Toll Regulatory Board’s approval of the new toll rates for the Cavite Expressway [Cavitex],” he said.
“Continuing strong demand for the services we provide, against a backdrop of steady economic growth, underpins our optimism for 2019. That said, it is rather early to give our earnings guidance for the year. Our focus over the medium term is to build out the many new infrastructure assets we are working on in order to deliver value to our shareholders and with this, to find suitable financing arrangements which will enhance profitability, earnings per share, and the Net Asset Value of MPIC,” MPIC Chairman Manuel V. Pangilinan said.
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