Infrastructure conglomerate Metro Pacific Investments Corp. reported a consolidated net income of P8.1 billion in the first half of the year, down nine percent from P8.9 billion year-on-year, as higher borrowing costs offset the increase in operating income.
MPIC said in a disclosure to the stock exchange Thursday it registered ₱560 million in non-recurring expenses in the first half of 2019 compared with a ₱341-million gain in 2018 and ₱745 million in foreign exchange losses from gains in 2018.
First-half consolidated core net income was nearly flat at ₱8.7 billion from ₱8.6 billion a year ago.
MPIC said earnings were lifted by a five-percent increase in operating income from core subsidiaries.
The power sector accounted for ₱6.1 billion or 54 percent of the net operating income, followed by tollroads which contributed ₱2.4 billion or 22 percent of the total
Water contributed ₱2.3 billion or 21 percent while the hospitals group provided ₱400 million.
“Our 5 percent growth in contribution from operations reflects meaningful volume increases at most of our businesses following years of high investment and our continuing emphasis on operational efficiencies,” said MPIC president and chief executive Jose Ma. Lim.
Lim, however, said earnings were plateauing as higher financing cost was affecting the company’s operating income.
“The rise in our borrowing costs has largely offset the increased operating contribution as we continue to make major investments in our new road, water, energy and logistics projects. These will take some time to complete and begin contributing to earnings,” he added.
MPIC chief finance officer David Nicol said the company planned to raise fresh cash by selling down stake in other units, including the hospital and water businesses.
The conglomerate plans to use proceeds from the fund-raising activities to finance the company’s massive spending plan.
Meanwhile, MPIC chairman Manuel Pangilinan said he expected the volume growth to continue throughout this year and the full-year earnings to be in line with 2018.
“Continuing strong demand for the services we provide, against a backdrop of steady economic growth, underpins our optimism for 2019,” Pangilinan said.
“Our absolute focus over the medium term is to build out the many new infrastructure assets we are currently working on in order to further improve our services to the communities, and enhance profitability, earnings per share, and the net asset value of MPIC,” he said.