CONGLOMERATE Metro Pacific Investments Corp. (MPIC) is jacking up its capital expenditures to P70 billion this year, which will primarily be earmarked for constructing power generation facilities and building toll roads, after seeing its core net income increase by 22 percent last year.
This year’s programmed capex is 20 percent higher than the previous year’s P58.2 billion.
In a press briefing on Tuesday, David Nicol, MPIC’s chief finance officer, said that bulk of the company’s capex this year will be allotted to Manila Electric Co. (Meralco).
Meralco will get between P25 billion and P26 billion for the construction of power generation assets, while P18 billion has been earmarked for toll roads in order to complete ongoingprojects such as the NLEX (North Luzon Expressway) Harbor Link, also known as the connector road.
Maynilad Water Service Inc. will get P14 billion for the continuing sewage project and P9 billion will go to the Light Rail Transit (LRT) 1 project. The remaining P3 billion will be for other projects, including investments overseas.
The programmed capex this year excludes anything on the regional airport bid, “assuming that it can be bid out,” Nicol said.
He said part of the funding for these projects will come from the P16 billion in bilateral credit lines that MPIC secured from banks since last year.
“And our view is that [this credit line]sees us through funding for 2016 and for 2017 without the need to go to the bond market or any other options,” he said.
Including investments of companies controlled or partly-owned by the First Pacific Group, which include those of Philippine Long Distance Telephone Co. (PLDT), total investments will increase to about P120 billion, or 18 percent higher than last year’s P101.2 billion, Nicol said.
MPIC’s core net income, or those derived from its main operations, rose 22 percent to P10.3 billion in 2015 versus the P8.5 billion posted a year before because of strong growth across all its businesses.
The company said its income grew because of strong traffic growth on all the roads held by Metro Pacific Tollways Corp. and a higher shareholding in Manila North Tollways Corp., higher billed volume at Maynilad Water Services Inc., and higher shareholding in Meralco.
Its water business, Maynilad, contributed P4.8 billion or 38 percent of total income, Meralco accounted for P4.5 billion or 36 percent, tollroads added P2.8 billion or 22 percent, and the hospital group contributed P473 million or 4 percent of the total.
Jose Ma. Lim, MPIC president and chief executive officer, said that its profits from Maynilad may decrease this year because of the expiration of the income tax holiday granted to it by the government.
But profit from Meralco, he said, is expected to increase by up to 50 percent because of its bigger share in the ownership the utility company.
Lim, however, declined to give any income guidance for the year.
“The strong results for the year reflect continuing improvements in service levels as well as efficiency and financial gains for our operating companies. While it may be rather early to provide earnings guidance for 2016 — given continuing regulatory uncertainties and the impending change in government starting July – we have maintained a positive outlook for the year,” said Manuel Pangilinan, MPIC chairman, said.