MPIC income up 15% as toll traffic, power use rise

By Justine Irish D. Tabile | BusinessWorld
March 09, 2023

METRO Pacific Investments Corp. (MPIC) reported a 15% jump in its consolidated core net income to P14.2 billion in 2022 from P12.3 billion a year earlier amid the recovery of toll road traffic and the growth in power consumption.

“The improved financial and operating results at MPIC’s operating companies delivered a 10% increase in contribution from operation mainly driven by the strong recovery in toll roads traffic and consistent growth in power consumption,” MPIC Executive Vice-President and Chief Financial Officer Cheryl A. Cabal-Revilla said during the company’s financial briefing on Wednesday.

The group’s power segment contributed 65% to MPIC’s net operating income, while toll roads shared 30%, and water contributed 14%. Its other businesses — light rail, healthcare, agribusiness, real estate, and fuel storage — incurred a loss of P1.8 billion.

“These losses include those of light rail and the other losses are actually characteristic of the startup nature of our new businesses. This also includes the last tranche of our winding down costs related to our logistics business, which we started to close down in the fourth quarter of 2021,” Ms. Cabal-Revilla said.

Total revenues of the power business, Manila Electric Co. (Meralco) and its subsidiaries, rose by 34% to P426.5 billion on higher volumes and pass-through generation charges.

Meralco energy sales grew by 6% to a record high of 48,916 gigawatts per hour as businesses and public confidence recovered from the pandemic.

Its core net income increased by 10% to P27.1 billion after Meralco PowerGen Corp. posted a P5.5 billion income, up by more than four times its previous year’s P1.2 billion.

Revenues in toll roads business Metro Pacific Tollways Corp. increased by 31% to P22.9 billion for a 46% rise in its core net income to P5.7 billion.

Maynilad Water Services, Inc., MPIC’s water business, recorded a 4% jump to P22.9 billion. However, its core net income declined by 7% to P6 billion.

The group’s light rail business, Light Rail Manila Corp., booked a 58% increase in revenues to P1.8 billion but recorded a core net loss of P472 million due to the start of the amortization of concession assets and borrowing costs.

Its healthcare segment through Metro Pacific Health (MPH) recorded P20 billion in revenues, a decline of 1% versus the 2021 level.

MPH’s consolidated core net income declined 24% to P1.1 billion on fewer coronavirus disease-2019 cases, investments in network integration and digitalization, and higher depreciation expense from completed projects.

Ms. Cabal-Revilla said MPIC this year is likely to maintain its 2022 income growth of 15%, which is expected to be driven by the toll road, power and water businesses.

“Likely, we should be able to maintain the 15% growth [in 2023]. We actually have good metrics coming from our toll road business and also the power consumption in Meralco. If these pan out and do well, with respect to the first two months’ results, we would be able to hit more or less the same,” she said.

In 2022, the group ventured into agribusiness through Metro Pacific Agro Ventures, Inc. (MPAV), which Ms. Cabal-Revilla said had a minimal impact on the company’s results last year.

“For 2022, the impact was very minimal because we only have Carmen’s Best at that time. Revenue from Carmen’s Best was at P150 million, not much of an impact to MPIC,” she said.

“But for 2023, [MPAV’s impact] would depend on our acquisitions, timing, and planned new ventures of MPAV,” she added.

MPIC is earmarking P80 billion for capital expenditure (capex) in 2023, which according to Ms. Cabal-Revilla is slightly higher compared with what the company spent in 2022.

“For the rest of the MPIC group, [the capex] is going to aggregate to almost P80 billion. The biggest chunk of it will come from power and then next would be toll roads given their existing projects that need to be completed,” she said.

When asked about how much the group spent in 2022, Ms. Cabal-Revilla said: “Last year was slightly lower.”

For 2023, MPIC is earmarking about P8 billion for its two acquisitions under its agribusiness, which Ms. Cabal-Revilla did not disclose.

“For this year alone, [our budget is] close to about P8 billion on agri. The projects and programs we will go into will really depend on the partnership with the LR Group,” she said, referring to the MPIC unit’s Israel-based partner in a vegetable greenhouse facility.

The capex is expected to be funded through internally generated funds and some through borrowings, said Ms. Cabal-Revilla.

On Tuesday, MPIC shares fell by 4.56% or 20 centavos to close at P4.19 apiece at the stock exchange.

MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.