FIRST PACIFIC COMPANY LIMITED 第一太平有限公司
(Incorporated with limited liability under the laws of Bermuda)
Press Release
Thursday, 12 November 2015
The attached press release was released today in Manila by Metro Pacific Investments Corporation ('MPIC'), in which First Pacific Group holds an economic interest of approximately 52.1%.
MPIC is a Philippine-listed investment management and holding company focused on infrastructure development.
Further information on MPIC can be found at www.mpic.com.ph
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For further information, please contact:
John Ryan Tel: +852 2842 4355
Head of Investor Relations Mobile: +852 6336 1411 Executive Vice President
Group Corporate Communications
Sara Cheung Tel: +852 2842 4336 Vice President
Group Corporate Communications
PRESSRELEASE
Setting the Stage for Consecutive Record Full Year Earnings
9M 2015 Core Net Income up 28% to ₱8.2 Bln from ₱6.5 Bln in 9M 2014
Reported Net Income attributable to shareholders up 30% to ₱7.8 Bln
Consolidated revenues up 8% to ₱27.0 Bln vs. ₱25.0 Bln
Fully Diluted Core Net Income per share up 20% to 29.8 centavos
MPIC Parent gearing ratio of 25.0% vs. 2.7% as of December 31, 2014
MERALCO Core Net Income ₱15.8 Bln, Core EBITDA ₱27.1 Bln
Maynilad Water Core Net Income ₱7.2 Bln, Core EBITDA ₱10.1 Bln
Tollways Core Net Income ₱2.0 Bln, Core EBITDA ₱4.8 Bln
Hospital Group Core Net Income ₱946 Mln, Core EBITDA ₱2.5 Bln
MANILA, Philippines, 12th November 2015 - Metro Pacific Investments Corporation ('MPIC' or the 'Company') (PSE: MPI) today reported consolidated Core Net Income of
₱8.2 billion for the nine months ended 30th September 2015, up 28% over the ₱6.5 billion figure achieved in the same period last year as all businesses reported strong growth.
The rise in Core Net Income was due mainly to: (i) strong traffic growth on all the roads held by Metro Pacific Tollways Corporation ('MPTC') and an increased shareholding in Manila North Tollways Corporation ('MNTC'); (ii) growth at Maynilad Water Services, Inc. ('Maynilad') due to higher billed volume; (iii) increased effective shareholding in Manila Electric Company ('MERALCO') and (iv) continuous growth in the Hospital Group.
In terms of contribution to the Company's net operating income: MERALCO accounted for
₱3.9 billion or 39% of the aggregate contribution; Maynilad contributed ₱3.6 billion or 36%; the Tollroads businesses delivered ₱2.1 billion or 22%; and the Hospital Group contributed
₱319 million or 3% of the total.
Consolidated Reported Net Income attributable to owners of the parent company improved 30% to ₱7.8 billion in the first nine months of 2015 from ₱6.0 billion a year earlier. Non- recurring items amounted to ₱452 million of charges, substantially comprising transaction costs relating to the increased shareholding in MERALCO and project expenses, compared with ₱475 million a year earlier which included taxes incurred on the reorganization of the hospital group and one-time separation expenses as a result of Maynilad's manpower efficiency program.
'Looking ahead, the full-year numbers for all our subsidiaries will be strong owing to steady economic growth,' said Jose Ma. K. Lim, MPIC President and CEO.
'But it's not all as rosy as it could be: our earnings - and our ability to finance infrastructure investment this country so badly needs - would be still stronger, if we were able to play on a level regulatory playing field,' he said. 'We are struggling uphill in toll roads and water against regulators who won't follow the rules they agreed to themselves. It is no wonder that investment in our great country is lagging behind its needs.'
Operational Review
MERALCO: Sustaining Operational Excellence under an Interim Tariff Regime
MERALCO's Core Net Income for the first nine (9) months of 2015 rose 11% to ₱15.8 billion compared with the same period last year despite lower distribution tariffs. The growth in core income was driven by a 5% increase in energy sales to 27,496 gigawatt hours ('GWh'), higher contributions to Net Income from non-regulated operating subsidiaries and stringent management of operating expenses.
Core Net Income also included the positive impact of MERALCO's compensation for previous net under-recoveries and carrying costs approved earlier by the Energy Regulatory Commission (ERC).
MERALCO's consolidated sales volume grew by almost 5%, largely attributable to strong demand by all customer classes and 4% new customer connections to 5.7 million for the year to date. Revenues for the first nine months of 2015 declined 3% to ₱197.0 billion due to the combined effects of: (i) lower average distribution tariff; (ii) net lower pass-through generation and other charges as a result of significantly lower fuel prices and competitively negotiated Power Supply Agreements; and (iii) loss of contestable supply revenues to other retail electricity suppliers. The implementation of MERALCO's 4th Regulatory Period interim Maximum Average Price of ₱1.3810 per kWh beginning July 1, 2015 brought down the average distribution charge for the nine months to September 2015 to ₱1.52 per kWh.
Capital expenditures, substantially comprising of electric capital projects, increased to ₱7.8 billion for the first three quarters of 2015 from ₱7.5 billion in 2014 as MERALCO's capex commitment continues to deliver strong returns: The 12-month moving average system loss fell to just 6.6% at the end of September 2015, 1.9 percentage points lower than the regulatory cap of 8.5%.
MERALCO through MERALCO PowerGen Corporation ('MGen') achieved major milestones for its power projects in the 3rd quarter of 2015:
Redondo Peninsula Energy, Inc. ('RP Energy'), a joint venture of MGen, Therma Luzon, Inc., and Taiwan Cogeneration International Corporation, continues to work with the National Grid Corporation of the Philippines for the transmission line requirements of the plant. RP Energy, a 2 x 300 MW circulating fluidized bed ('CFB') coal-fired power plant, expects its project financing agreement to be finalized by the first quarter of 2016.
San Buenaventura Power Limited ('SBPL'), a joint venture between MGen and Thailand's New Growth B.V., is working to complete limited plant site preparation works before proceeding to financial close and issuing a Notice to Proceed to the Engineering, Procurement and Construction contractor. SBPL, a 455 MW (net) supercritical coal-fired power plant in Mauban, Quezon, is expected to begin commercial operations in 2019.
Global Business Power Corporation, in which MERALCO has a 22% interest, has a total of 709 MW of dispatchable capacity with another 1 x 150 MW CFB coal-fired power plant under construction in Iloilo City through Panay Energy Development Corporation ('Panay Energy'). Equity in Panay Energy has been fully funded and commercial operation is estimated to begin late next year.
On 17th April 2015, MPIC acquired additional MERALCO shares from Beacon, bringing effective ownership in MERALCO to 32.48% from 27.48%. Proceeds from Beacon's sale of MERALCO shares were used to reduce relatively expensive debt at Beacon. The increase in MPIC's effective ownership in MERALCO, the reduced debt at Beacon and the underlying growth at MERALCO, combined to increase this segment's contribution to MPIC for the period by 58% to ₱3.9 billion from ₱2.5 billion.
The full text of MERALCO's Earnings Press Release issued on 26th October 2015 is available at http://www.meralco.com.ph.
Maynilad and Other Water Projects: Continuing Service Expansion & Improvement
Maynilad, the biggest water utility in the Philippines, achieved a 4% increase in volume of water sold in its concession area for the first nine months of 2015. The number of water connections (or billed customers) rose 6% to 1,247,204 by the end of September 2015 from 1,176,010 a year earlier.
Non-Revenue Water ('NRW') fell to a record low 29.4% as at the end of September 2015 from 34.1% a year earlier as the billed volume grew faster than the marginal increase in water supply. Just eight years ago, when MPIC first invested in Maynilad, NRW was at a staggering 68% and millions of customers had inadequate water supply. Since the start of 2015, Maynilad has repaired 20,870 pipe leaks across its concession area, making possible the recovery of some 43.3 MLD (million liters per day) of water for the use of its customers.
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