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Thursday, February 26, 2015

Higher revenue across units lifts Metro Pacific's 2014 profit

The Metro Pacific Group saw earnings rise by a tenth last year despite delays in regulatory approval of its units’ pending rate adjustments.

In a disclosure to the Philippine Stock Exchange, Metro Pacific Investments Corporation (MPIC) said its net income climbed 10 percent to P7.9 billion last year from P7.2 billion in 2013.

This as revenue rose by 10 percent to P33.8 billion from P30.9 billion over the same period.

"All our operating companies reported strong profitability for the year. This reflects our intense focus on operational efficiencies but at the cost of the years of high capital expenditures," Jose Ma. K. Lim, MPIC president and chief executive said.

Maynilad Water Services Inc contributed the biggest to MPIC’s profitability at P4.4 billion, followed by Manila Electric Company’s P3 billion. Metro Pacific Tollways Corporation delivered P2.2 billion, while the Hospital Group contributed P465 million.

"We anticipate continued strong volume growth in 2015 for all our subsidiaries in light of anticipated continuing economic growth," Lim said.

“In this face of this favorable prospect, a number of our businesses are facing overdue tariff adjustments - particularly our water and toll roads where if we left unresolved, continued capital expenditures on water projects and road construction would be degraded,” he said.

Maynilad last December won an arbitration case over the increase in its base rates, but state-run Metropolitan Waterworks and Sewerage System (MWSS) has yet to clear the adjustment. Maynilad has since called on the government guarantee, a recourse provided in their concession agreement.

Manila North Tollways Corporation (MNTC), which MPIC controls and operates the North Luzon Expressway (NLEX), is also awaiting a toll increase.

Given these uncertainties, “we are at this time, unable to give earnings guidance for 2015,” Lim said.

Manuel V. Pangilinan, chairman of MPIC, said last year’s profitability is encouraging despite a difficult regulatory environment.

"Our outlook for 2015 is encouraging on account of continued strong volume growth. However, the overdue tariff increases on our roads, where we can't continue capital expenditures without regard to tariffs, together with the inexplicable delay of the MWSS in acting on the arbitration award for Maynilad, mean that is rather early for us to provide earnings guidance for 2015 at this time," Pangilinan said.

The company has set aside P58.2 billion for capital expenditures this year. It earlier raised $200 million from the sale of additional shares.

- Interaksyon is the online news portal of TV5, which Pangilinan also chairs.

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