MPI's NET INCOME GROWS BY 10% - Marvin Germo

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By: Marvin Germo | August 6, 2018

MPI has strong growth in its business units

Good news knocks as the infrastructure group Metro Pacific Investments Corp. (MPIC) reported a 10% growth in its core net income in the first six months of 2018 and this was mainly due to its expanded power portfolio, traffic growth in the tollroad segment, inflationary tariff increase in its water business and lastly, from the accumulated growth by the different business units under the group. In comparison to the same period of last year’s data, net income grew a tremendous amount of P8.6 billion from P7.8 billion.

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As mentioned above, the increase was from the different business sectors of the group so let’s delve in more particularly what sectors it came from. A big chunk of the growth came from its power businesses which accounted for 55% which was then followed by tollroads accounting for 21% and water at 20%. The remaining came from its hospital and rail, logistics and systems group.

For the power segment, its power units Manila Electric Co. (Meralco) and Global Power Corp. contributed to P5.8 billion to its core net income. Meralco’s net income grew to P10.9 billion from its 6% growth in distribution revenue while Global Power’s net income grew to P1.3 billion as its volume increased from the operations of its 150-megawatt (MW) plant in the first quarter this year. It sold 2,460 gigawatt-hours of electricity in the first half which is 21% higher for last year’s data.

In its tollroad unit, Metro Pacific Tollways Corp.’s net profit grew to P2.3 billion or 12% due to the systemwide vehicle entries that increased to 57% with an average of 924, 364 vehicles per day.

Its water units, MetroPac Water Investments Corp. and Maynilad Water Services, Inc. contributed P2.1 billion to its core net earnings. The latter’s net income grew to 15% which amounted to P4.2 billion on higher revenues, lower tax provisions, and lower interest expense.

Its hospital unit Metro Pacific Hospital Holdings, Inc. posted a net income of P1 billion as its revenues grew to 15% mainly driven by a 12% increase in out-patient visits and a 15% growth in in-patient admissions. On top of this, the company plans to expand its hospital unit by acquiring more existing hospitals.

The group’s rail business is spearheaded by Light Rail Manila Corp. which contributed a net profit of P205 million. Meanwhile, MetroPac Movers already completed the acquisition of a 12% stake in Air21 from five (5) companies last month. This 12% stake will be an entry point for the company to understand more their business model. The said acquisition is in line with the company’s objective of diversifying its portfolio in order to reap better profits. Also, the company aims to be the biggest warehouse in the next two years. It already has plans to open its facilities in Davao and Cebu City.

Brighter future for the company

As the company continually expands its business units, it’s certainly reaping good returns from different sectors that it is currently tapping. Indeed, MPIC is expected to perform better in the coming years in line with better fundamentals.

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