Metro Pacific Investments Corp.

CAVITEx operator seeks 20-centavo toll rate hike

THE operator of the Cavite Expressway (CAVITEx) and the Philippine Reclamation Authority (PRA) are seeking to implement a 20-centavo per kilometer toll rate hike to recoup its P800-million investment in increasing the capacity of the R-1 Expressway.

Last Friday, the Toll Regulatory Board (TRB) published a notice to expressway users on the petition for approval of the add-on toll rate with application for provisional relief filed by Cavitex Infrastructure Corp. (CIC) and PRA. The TRB said CAVITEx users can file a counter petition within 30 days from Nov. 2.

The current toll fee at CAVITEx for the seven-kilometer R-1 road is P24 for Class 1 vehicles, P48 for Class 2 and P72 for Class 3, thus a 20-centavo increase would translate to an additional P1.40 across all vehicle types. The R-1 Expressway runs from Seaside Drive to Zapote.

CIC, the concession holder for the CAVITEx, submitted to the TRB on Oct. 12 its petition to start implementing the add-on toll rate. CIC cited its investment in the R-1 enhancement project, which included the construction of an additional lane on both directions from R-1 toll plaza to MIA Road Intersection, and an additional lane on both directions from R-1 toll plaza to Las Piñas bridge.

CIC asked the TRB to issue a Notice to Start Toll Collection and an order allowing it and the PRA to collect the add-on toll fee as soon as the R-1 opens.

The opening of R-1 was originally scheduled last month, but has been delayed, pending submission and approval of certain documentations.

CIC president Luigi L. Bautista previously said the company is investing P1.1 billion for the development works in CAVITEx, with Phase 1 taking up P800 million.

“The add-on toll rate for the New Project is a contractual right to which CIC and PRA are entitled under the ToA (terms of agreement). Furthermore, it is necessary to ensure the sustainability and viability of the MCTEP (Manila Cavite Toll Expressway Project) and its Expressways and to ensure the comfort and safety of motorists and other users of the Expressways and all the toll facilities,” CIC said in its petition.

Aside from the 20-centavo add-on it is seeking to implement now, the CAVITEx operator noted it has another 25-centavo add-on toll rate scheduled for the third quarter of 2019, when it finishes Phase 2 of the CAVITEx improvement works.

Phase 2 covers the P300-million widening of bridges in Wawa, Las Piñas and Parañaque, as well as the construction of an additional lane on both direction for the remaining R-1 mainline carriageway from Las Piñas Bridge to Zapote Interchange.

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...earnings report, not spectacular...modest lang

Metro Pacific says on track to hit P15-billion core profit this year

METRO PACIFIC Investments Corp. (MPIC) is on track to end the year with around P15 billion in core net income, a single-digit increase from year-ago figures due to the expected slower growth in the fourth quarter.

“We’re saying that we think that fourth quarter will be pretty flat, and so you can see our core net income now is about P12 billion. And the last quarter added on to that you’ll get a number that’s roughly about P15 billion,” MPIC Chief Finance Officer David J. Nicol said in a press briefing in Makati City on Wednesday.

If realized, this would be a 6% increase from MPIC’s core net income of P14.1 billion posted in 2017.

“I expect minimal growth in Q4 core net income compared with the same quarter last year. We are working hard but constructively with government to resolve pending issues involving tariffs and rights of way,” MPIC Chairman Manuel V. Pangilinan said in a statement, referring to the government’s inaction on Metro Pacific Tollways Corp.’s (MPTC) pending petitions to raise toll fees and Light Rail Manila Corp.’s (LRMC) move to hike fares at the Light Rail Transit Line 1.

Problems involving right of way acquisition has also plagued some of the company’s infrastructure projects.

MPIC improved its core profit by eight percent to P12.2 billion in the first nine months of 2018, driven by its larger power portfolio, continued traffic growth in its toll roads, and the higher volume growth for its water unit.

System-wide revenues stood at P302.9 billion, 8% higher year-on-year.

The infrastructure conglomerate however noted growth was slower in the third quarter, particularly for the power unit due to weather disturbances. It noted that volume growth for power distributed in Luzon grew by only 2% in the third quarter, versus a 5% year-to-date growth. Meanwhile, power sold in the Visayas dropped by 3%.

Domestic toll road traffic meanwhile inched up by 4% in the third quarter, versus a 7% figure for the first nine months.

“The third quarter has showed a slowing down, or maybe a loss of some momentum… pretty much across the board there has been a reduction in volumes, but still quite strong for the year,” MPIC President and Chief Executive Officer Jose Ma. K. Lim said during the briefing.

“Partly weather disturbances, I think in the case of toll roads as well, because in the case of severe storms in some cases the power supply to a certain community is going to be shut off for safety. Part of it is also cooler temperatures,” Mr. Lim added.

MPIC’s power unit accounted for 55% of its core net income at 55% or P8.5 billion, followed by the toll roads business which provided 21% or P3.3 billion. Water generated 20% or P3 billion, hospitals contributed 4% or P586 million, while the Rail, Logistics, and Systems group posted P26 million.

The company’s power unit consists of the Manila Electric Company (Meralco) and Global Business Power (GBP). Meralco’s core profit went up by 9% to P16.7 billion during the period, thanks to a 5% uptick in energy sales backed by slightly lower tariffs.

Meralco’s better performance offset the 9% decline in GBP’s core net income to P1.9 billion, weighed down by depreciation expenses for its Panay power plant and higher costs, among others.

For the toll roads unit, MPTC recorded a 55% increase in system-wide vehicle entries to 916,169 per day, boosted by the contribution of PT Nusantara Infrastructure Tbk, its investment in Indonesia.

In the Philippines, average daily vehicle entries across the North Luzon Expressway, Cavite Expressway, and Subic-Clark-Tarlac Expressway went up by 7% to 471,634.

The water unit through mostly Maynilad Water Services, Inc. booked a 10% increase to P6.1 billion, backed by a 6% increase in revenues to P16.6 billion.

Meanwhile, the hospital unit benefited from its investments in Jesus Delgado Memorial Hospital in Quezon City and St. Elizabeth Hospital in General Santos City last year. It recorded a 11% increase in out-patient visits and 15% uptick for in-patient admissions.

The railway unit through LRMC increased ridership at the LRT-1 by 5% to 452,892 by end-September.

Papa Securities Corp. Equity Investment Analyst Emille Martin Munsayac noted that MPIC’s earnings result is in line with their full-year estimate at 73%, but is ahead of consensus’ 83%.

“Revenues came in line with expectations but higher financing costs eased the bottomline. MPIC is guiding for minimal growth in 4Q,” Mr. Munsayac said in a text message.

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Metro Pacific nearing deal for biomass project

METRO PACIFIC Investments Corp. (MPIC) looks to close the deal for a biomass project by the end of the month, which it hopes would be among the first of many projects in the renewable energy sector.

“We are also doing a biomass project that is close to signing, it will be using agriculture inputs,” MPIC President and Chief Executive Officer Jose Ma. K. Lim said in a press briefing in Makati last week.

MPIC Chief Finance Officer David J. Nicol said the project will have the capacity to produce “a few single digit megawatts.”

“It is the first of what we hope could be many, it’s an experiment. We have to see if it works, if it does it’s very quick payback and profitability, so much more immediate in terms of returns generation than some of the projects in the segment,” Mr. Nicol said.

The biomass project is part of the company’s plans to be a significant player in the renewable space.

The listed infrastructure conglomerate, in a consortium with Covanta Energy LLC and Macquarie Group Ltd., has currently partnered with the local of government of Quezon City for an integrated solid waste management facility (ISWM), which if realized would be its first renewable energy project.

The facility looks to process up to 3,000 metric tons a day from Quezon City’s municipal waste, converting it to around 42 megawatts that can power some 60,000 to 90,000 homes.

Mr. Lim said the P15-billion project that started five years ago will undergo Swiss challenge by next year, with competitive bids scheduled to be submitted by January.

“We are hopeful to be able to proceed with the implementation shortly after,” Mr. Lim said.

MPIC is also conducting studies for a similar waste-to-energy project in Pampanga, along with Chinese partner China Everbright Group.

“The study has been completed, we have joined forces with a Chinese firm, China Everbright, to conduct this study, right now the evaluation is undergoing the results. We haven’t got a business plan for Pampanga at the moment, we’re still developing one,” Mr. Lim said.

The MPIC executive noted that they continue to look at other large areas with similar waste volumes as Quezon City.

“The challenge in those areas is that the volume is spread out, it’s not concentrated unlike in Metro Manila where you get about 10,000 tons all in one area every day. In other areas, you’d be lucky to get 700 tons. The technology is different for them,” Mr. Lim explained.

Power generation is among MPIC’s core interests, alongside toll roads, water, railways, hospitals, and logistics. It posted a core net income of P12.2 billion in the first nine months of 2018, 8% higher year-on-year, driven by a 8% increase in system-wide revenues to P302.9 billion.

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11-12 IPO? ayus!

MPIC to proceed with hospital IPO

MANILA, Philippines — Metro Pacific Investments Corp. (MPIC), the infrastructure conglomerate chaired by tycoon Manuel V. Pangilinan, will proceed with its plan to list its hospital arm despite the prevailing market uncertainties.

MPIC chief financial officer David Nicol said MPIC’s plan for Metro Pacific Hospital Holdings Inc. (MPHHI) to do an initial public offering is on track.

“We think it’s a fantastic IPO.

Our target is still second half of 2019,” Nicol said.

Asked about the size of the public offer, he said considerations would be getting a fair valuation and putting into account other funding initiatives of the company.

MPHHI is the hospital arm of the conglomerate and is a major contributor to revenues.

It reported a 15 percent rise in aggregate revenues in the January to September period.

This as the company saw an 11 percent increase in out- patient visits to 2,534,985 and a 15 percent growth in in-patient admissions to 143,579.

Part of this performance is a result of investments the company made in Jesus Delgado Memorial Hospital in Quezon City and St. Elizabeth Hospital in General Santos City in 2017.

In  August, MPHHI also acquired an additional 14.75 percent share in Davao Doctors Hospital (DDH). The result of this tender increased its ownership to 49.91 percent from 35.16 percent previously.

Because of MPHHI’s strong performance, market analysts and investment bankers are looking forward to the initial public offering of the company.

In all, MPHHI is continuously growing its hospital portfolio and is driving enhancements in patient care offerings and providing new service centers for the communities it serves.

Last year, it acquired the Delgado Clinic Inc. (DCI), the family-owned company that operates the Dr. Jesus C. Delgado Memorial Hospital in Quezon City.

The Jesus Delgado hospital is MPHHI’s eight hospital in Metro Manila. Others are Makati Medical Center, Asian Hospital, Cardinal Santos Medical Center, Manila Doctors Hospital, De Los Santos Medical Center, Our Lady of Lourdes Hospital, and Marikina Valley Medical Center.

Aside from these facilities, MPHHI also has at least five provincial hospitals namely Davao Doctors Hospital, Riverside Medical Center in Bacolod, Central Luzon Doctors’ Hospital in Tarlac, West Metro Medical Center in Zamboanga, and Sacred Heart Hospital in Malolos, Bulacan.

It is also studying the viability of putting up its own hospital on top of acquiring existing ones.

Proceeds of the IPO, if ever, would likely be for the continuous expansion of its hospital network.

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