Metro Pacific Investments Corporation is already the premier infrastructure development firm in the Philippines. Now the group is expanding outside its home market into the fast-growing ASEAN region.
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As the final countdown to the launch of the ASEAN Economic Community begins, global fund managers are casting their eyes around the region in search of exciting new growth opportunities.
Metro Pacific Investments Corporation (MPIC), the leading infrastructure development firm in the Philippines, is well placed to capitalize on the new found interest. At home, MPIC controls the largest toll road operator, electricity and water distributors and operates the largest network of hospitals in the country.
“We invest significant resources, both financial and human capital, in order to ensure that our utilities and network of hospitals are run efficiently, service their customers effectively and meet all regulatory requirements,” says Manuel V. Pangilinan, chairman of the Board of MPIC, a group that is listed on the Philippine Stock Exchange.
MPIC’s portfolio of investments has produced outstanding results. For the year ended 31st December 2013, consolidated core net income rose by 10 percent to P7.2 billion from P6.5 billion the previous year. The toll-roads and hospitals businesses performed especially well with profits up by 19 percent and 15 percent, respectively. “All our businesses achieved strong growth in profitability for the year,” says president and chief executive officer Jose Ma. K Lim. Despite uncertainties over the regulatory environment for its utilities, and especially tariff adjustments for toll-roads, Lim expects continued volume growth for all the group’s subsidiaries.
Investment Potential
It is not only in the home market that MPIC has identified growth opportunities. In Thailand, it has acquired a 29.4 percent stake in the company with a 27 year concession to operate the Don Muang Toll Road, a 21.9km six-lane elevated toll road connecting the Don Muang Airport to Bangkok.
While the DMT transaction marks the group’s first major investment outside its home market in the Philippines, it is unlikely to be the last. In 2013, MERALCO – MPIC’s electricity distributor, through a joint venture with First Pacific, acquired 70.0 percent of PacificLight Power, formerly GMR Energy (Singapore). The company built an 800-megawatt LNG power plant on Jurong Island, Singapore.
“MPIC shall continue to look for other investments outside the Philippines, both to leverage our expertise and address the measured roll out of PPP projects in the Country,” says CEO Jose Lim.
The Future
Looking ahead, Chairman Pangilinan is optimistic that the group will continue to enhance the value of its portfolio of investments by improving operating metrics and financial returns. “Our short-term outlook is shaped in part by tariff adjustments for the toll-roads, the on-going arbitration by Maynilad and the rate rebasing for MERALCO.,” he says. “Longer term, we believe revenues and income for each company will be driven by raising operating efficiencies, keeping control of cash costs and by new investments.”
Among the most important goals, he expects the existing portfolio to continue operating efficiently while taking advantage of growth opportunities. The water business will continue to expand its customer base by connecting an additional 900 thousand people to the distribution network while investing in waste water treatment, Toll-roads will grow on the back of extensions and expansions to its existing road network, MERALCO will vertically integrate into power generation and retail electricity supply and the hospital group will add more beds and diagnostic centers to its portfolio. Additional growth will come from recently won PPP bids, an automated fare collection system concession for the light rail network in Metro Manila and a yet to be formally awarded concession to operate and extend the Light Rail Transit System 1. Beyend this, the company remains optimistic about its chances for upcoming bids for the government’s Public-Private Partnership projects as well as acquisitions inside and outside the Philippines.
Contact Information
Albert WL Pulido, VP Investor Relations+632 888 0888, ext 383awlpulido@mpic.com.phinvestorrelations@mpic.com.ph www.mpic.com.ph