MPIC looking to grow logistics business as Q1 core profit grows 14%

May 4, 2017 - 6:25 PM
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Metro Pacific's logo. FROM BUSINESSWORLDONLINE

MANILA – Metro Pacific Investments Corporation’s core profit grew 14 percent to P3.1 billion in the first quarter of 2017 due to the strong showing of its power, toll road and hospital businesses.

The holding firm added logistics to its portfolio last year and officials said this could be a major contributor in a few years.

It remains interested in public infrastructure projects but says plans will depend on how the government rolls these out.

Referring to the firm’s foray into logistics, MPIC president and CEO Jose Ma.K. Lim said: “We want to make that a major contributor to MPIC. We have our own internal targets. The logistics business was started last year, so it will take us another year or so to get to the size we want; and then, after that we still expect it to grow to the size we want.”

The holding firm said Wednesday its core profit grew by 14 percent to P3.1 billion the first quarter.

Power generation and distribution accounted for just over half of net operating income while the logistics and systems business contributed just 2 percent.

MPIC went into logistics last year via a P2-billion investment, and other companies have followed suit.

The SM Group was among the latest, buying a 34.5-percent stake in 2-Go’s parent firm in March.

Lim said other companies were seeing the industry’s potentials and MPIC was looking to spend more for acquisitions and expansion.

“That’s true; we see a lot of logistics companies that are just very specialized. Whether it’s corporate logistics, or warehousing, or shipping, or freight forwarding, they tend to be very specialized,” said Lim.

MPIC is also keen on building airports, but its plans will depend on how fast the government can get projects off the ground.

The company has expressed an interest in developing the Clark International Airport, which Filinvest and JG Summit Holdings also want to modernize under an unsolicited proposal submitted earlier this year.

Referring to Clark, Lim said, “the answer is yes, we are interested. It depends on what they will do: if they will declare an original proponent, if they’re open to other modes of PPP then we would be pursuing that as well – whether it’s bidded or through unsolicited or perhaps through a joint venture.”

MPIC is also keen on bidding for regional airports in Bacolod, Bohol, Iloilo, Davao and Laguindingan, despite losing partner Aeroports de Paris.

Lim said the firm had “identified some potential partners but we’ve not heard any news from the department on this.” It seems, he said, that “they’re not in a hurry to bid this one,” adding, “we will not disclose them until we firm up our negotiations with them. At the moment that’s not yet done.”

The government has said it would take the lead in building needed infrastructure and MPIC officials said their plans could complement this.

That, according to Metro Pacific Tollways Corporation president and CEO Rodrigo Franco, “would be of interest to us also because as you can see, we are already operating toll roads — which means we have the ability to operate and maintain tollroads.” On tollroad space, he said, “we can easily bid out on an O&M basis but we will be very selective. The project will have to have strategic value to us because the limitations of an o&m project arrangement, the revenue potential are in general going to be lower than if you are the ones who developed the project.”

MPIC said increased investments, particularly in power, were behind the first-quarter income jump.

Moving forward, officials said more outlays were being readied  for logistics and tollways to support growth.