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

InterAksyon.com is the online news portal of TV5, which Pangilinan also chairs.

Gov't awards LRT1 Cavite Extension project to Ayala-Metro Pacific group

The Department of Transportation and Communications (DOTC) has awarded the LRT1 Cavite Extension Project to the joint venture of the Ayala and Metro Pacific groups.

In a text message, DOTC spokesperson Michael Arthur Sagcal said the Light Rail Manila Consortium "has 20 days to comply with post-award requirements, after which the concession agreement can be signed by both parties."

Sagcal didn't provide details, especially pertaining to how the agency sidestepped a stay order that the Supreme Court issued at the behest of SM Prime Holdings Inc.

Light Rail Manila is the joint venture between AC Infrastructure Holdings and Metro Pacific Investments Corp (MPIC) that was the lone bidder for the P64.9 billion project, which is one of the public-private partnership (PPP) ventures of the Aquino administration.

The consortium, which offered a P9.35 billion premium over the contract price, had bagged the endorsement of the boards of the National Economic and Development Authority (NEDA) and of the Light Rail Transit Authority (LRTA).

SM Prime however had thrown a monkey wrench into the project, after it secured a temporary restraining order from the Supreme Court, which halted the award based on the Henry Sy-led mall developer's claim that the project would violate a 2008 contract with state-run LRTA.

Under the said contract, SM Prime paid LRTA P200 million for the right to name the common station for the LRT1 and MRT3, and to locate the facility near the SM City North Edsa mall.

The design of the common station was tucked into the LRT1 Cavite Extension Project, which also provided that the location be moved near the Trinoma mall of Ayala Land Inc. DOTC had said its decision to move the location would save the government billions in pesos.

Before today's announcement of the award, DOTC had sought the legal opinion of the Office of the Solicitor General and was looking at a loophole in the High Tribunal's stay order to expedite the project.

The southbound extension of LRT1 would increase the train’s span from 20.7 kilometers to 32.4, with approximately 10.5 kilometers of the extension elevated and 1.2 kilometers at grade.

More than 500,000 commuters everyday use LRT1, which runs from Baclaran in Pasay City to Roosevelt in Quezon City. The southern part of Metro Manila and neighboring Cavite province is home to nearly 4 million people.

- Interaksyon

Metro Pacific to expand Makati Med

 

In a briefing on Tuesday, MPIC hospital group president and chief executive Augie Palisoc Jr. said Makati Medical Center has leased eight storeys of the NAC Centre, a building located across the hospital where it has transferred its administrative and management offices.

The move will free up space in the two main towers of Makati Medical Center, allowing the hospital to add about 50 beds and create more room for medical services, Palisoc added.

"Makati Med is starting to fill up... They have to really look at a more permanent option to expand," MPIC chairman Manuel V. Pangilinan said, adding that the company is looking at acquiring a property near the vicinity to accommodate the expansion of the hospital.

The aggregate core net income off the hospital group rose 15 percent to P458 million in the first half on higher patient revenues, gains from completed capital expenditure programs and savings from synergy projects.

Also boosting earnings were the contributions of De Los Santos Medical Center (DLSMC), Central Luzon Doctors' Hospital (CLDH) and MegaClinic, which were invested in during the second half of 2013.

MPIC operates the largest private hospital group in the country, comprising eight full-service hospitals with approximately 2,150 beds.

These are the Makati Medical Center, Cardinal Santos Medical Center, Our Lady of Lourdes Hospital, Asian Hospital & Medical Center and DLSMC in Metro Manila; CLDH in Tarlac; Riverside Medical Center in the Visays; and Davao Doctors Hospital in Mindanao.

MPIC also owns MegaClinic, its first mall-based diagnostic and ambulatory care center located in SM Megamall.

- Interaksyon

P35.4B Cavite-Laguna Expressway gets four bids, says DPWH

Four groups on Monday made a bid for the P35.4 billion Cavite-Laguna Expressway project, a public-private partnership initiative of the Department of Public Works and Highways (DPWH).

According to the DPWH, the investors vying for the PPP project are Alloy MTD Philippines of Malaysia, Team “Orion” of Ayala Corp. and Aboitiz Group, MPCALA Holdings Inc. of Metro Pacific Investments Corp., and Optimal Infrastructure Development Inc. of San Miguel Corp.

The department will issue a for the submission and opening date of the financial offer by bidders that will pass the technical hurdle, DPWH Secretary Rogelio Singson told the representatives of the investors. "We hope to complete the process by Friday," he said.

At this point, the Special Bids and Awards Committee and the Technical Working Group will review the legal and technical proposals of the participants and see how well they have met the requirements, DPWH Undersecretary Rafael Yabut said.
The project involves financing, design, construction, operation and maintenance of a four-lane, 47-kilometer tollway linking South Luzon Expressway and Manila-Cavite Tollroad Expressway.

- GMA News

Metro Pacific plans P100B capex for 2015-16

Metro Pacific Investments Corp (MPIC) plans to raise capital spending over the next two years for its infrastructure and power businesses.

David J. Nicol, MPIC chief financial officer, told reporters last week that the company's capital expenditures may reach P50 billion each for 2015 and 2016.

"For the group, I could see that Meralco is investing in power generation, and for AFCS and LRT Line 1 Cavite Extension Project, if it will be awarded to us," Nicol said.

MPIC controls Manila Electric Co, and is part of Light Rail Manila Consortium, the lone bidder for the P64.9-billion LRT1 Cavite Extension Project. MPIC also is part of AF Consortium, which earlier won the bidding for the P1.72-billion Automated Fare Collection System, a project that will provide a common ticket for the LRT and MRT train services.

For 2014, MPIC has set aside a P40 billion capex.

Nicol said MPIC, which owns 55 percent of Light Rail Manila, would infuse P4-5 billion in the consortium. Ayala's AC Infrastructure owns 35 percent, while Australia’s Macquarie Infrastructure Holdings holds the remaining 10 percent.

Nicol said MPIC is optimistic that its proposal for the LRT1 Cavite Extension Project complies with the requirements of the Department of Transportation and Communications (DOTC).

He said the consortium expects to make money in the first 10 years of the 32-year contract, earlier than the other bidders' projection of 20 years.

DOTC said the LRT1 Cavite Extension Project involves the construction of 11.7-kilometer track from the terminus of the LRT Line 1 at the Baclaran Terminal, to the Niyog Station at Bacoor.

More than 500,000 commuters everyday use LRT1, which runs from Baclaran in Pasay City to Roosevelt in Quezon City. The southern part of Metro Manila and neighboring Cavite province is home to nearly four million people.

In the first quarter of the year, MPIC reported a consolidated core net income of P2.2 billion, up 15 percent from P1.9 billion a year ago. The conglomerate attributed the growth to higher traffic and increased ownership in Manila North Tollways Corp (MNTC), higher volumes sold at Maynilad Water Services Inc and Meralco, as well as strong organic growth and new investments in the healthcare business.

- Interaksyon