MPIC 1H 2017 core net income up 17% to record ₱7.8 bln: Continuing to exceed targets

第一太平有限公司

(Incorporated with limited liability under the laws of Bermuda)

Press Release

Friday, 4 August 2017

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 42.0%.

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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John Ryan Tel: +852 2842 4355

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Group Corporate Communications

PRESSRELEASE

Continuing to Exceed Targets

• 1H 2017 Core Net Income up 17% to ₱7.8 Bln from ₱6.6 Bln in 1H 2016

• Reported Net Income attributable to shareholders up 12% to ₱7.8 Bln

• System wide revenues including MERALCO up 10% to ₱184Bln

• Interim dividend per share increased 8% to 3.45 centavos

• Fully Diluted Core Net Income per share up 6% to 24.72 centavos

• MPIC Parent gearing ratio of 25.0% vs. 26.4% at year end

• MERALCO Core Net Income ₱10.1 Bln, Core EBITDA ₱17.2 Bln

• Global Power Core Net Income ₱0.9 Bln, Core EBITDA ₱4.2 Bln

• Tollways Core Net Income ₱2.1 Bln, Core EBITDA ₱4.2 Bln

• Maynilad Water Core Net Income ₱3.7 Bln, Core EBITDA ₱7.1 Bln

• Hospital Group Core Net Income ₱0.9 Bln, Core EBITDA ₱2.3 Bln

• Light Rail and Logistics - both new businesses contributed positively to Core Net Income

• MPIC Group wide CAPEX for 1H2017 amounted to ₱15.4 Bln excluding acquisitions

MANILA, Philippines, 4th August 2017 - Metro Pacific Investments Corporation ("MPIC" or the "Company") (PSE: MPI) today reported a 17% rise in consolidated Core Net Income to ₱7.8 billion for the first six (6) months ended 30th June 2017 from ₱6.6 billion in the first six (6) months of 2016 on the back of its expanded presence in the power industry.

Core Net Income was lifted by: (i) robust traffic growth on each of the roads held by Metro Pacific Tollways Corporation ("MPTC"); (ii) an expanded power portfolio through increased investment in Beacon Electric Asset Holdings Inc.; and (iii) continuing growth in the Hospital Group.

In terms of contribution to the Company's net operating income: Power (distribution and generation) accounted for ₱5.3 billion or 55% of the aggregate contribution; Tollroads contributed ₱2.0 billion or 21% of the total; Water (distribution, production and sewerage treatment) contributed ₱1.8 billion or 19% of the total; the Hospital Group contributed

₱308 million or 3% of the total; and the Rail, Logistics Systems Group contributed ₱104 million or 2% of the total.

Consolidated Reported Net Income attributable to owners of the parent company rose 12% to ₱7.8 billion in the first six months of 2017 from ₱7.0 billion in the first six (6) months of 2016. Non-recurring income amounted to ₱21 million and was largely made up of a realized gain on sale of shares in MERALCO which was largely offset by refinancing expenses, project expenses and one-time separation expense as a result of Maynilad's redundancy program.

Jose Ma. K. Lim, MPIC President and CEO said, "Our earnings growth reflects our increased investment in the power sector together with strong volume growth at our tollroads and hospitals businesses."

He continued: "The combination of years of capital expenditures to enhance the reach and quality of our services together with the failure to date to implement tariff increases that our water, tollway & rail businesses are entitled to is a drag on growth in Core EPS."

"Tariff delays are impacting investor sentiment", Lim said.

"As expected, Maynilad won its arbitration claim in Singapore calling for compensation from the Philippine Government for payment of past due revenues, this now needs to be operationalized. However, the matter of the tariff to be charged to the public, as with our other businesses, remains unresolved and this is a continuing to constrain funding for new projects. This said, constructive discussions with the Administration are in progress and there is agreement that contracts will be honored," he said. "I have yet no immediate timetable for resolution of these issues although I believe them to be imminent. I expect continued volume growth from all our businesses for the remainder of the year."

Regarding shareholder returns, Lim added, "I am pleased to say that our Board of Directors declared earlier today an interim dividend amounting to 3.45 centavos per common share, an increase of 8% over the last year."

The record date for the interim dividend is September 1, 2017; the payment date is September 26, 2017.

Operational Review

POWER:

In June 2017, MPIC further deepened its participation in the Philippine power sector as it acquired the remaining 25% ownership in Beacon Electric at an aggregate purchase price of ₱21.8 billion. Following this and related financing transactions MPIC's economic interest in MERALCO is 45.5% and in Global Power 62.4%.

MPIC's power business contributed ₱5.3 billion for the first six (6) months of 2017, an increase of 26% driven by the various step-up investments in MERALCO and Global Power.

MPIC is continuing its development of power related services and investments in the Philippines with its combination of distribution, generation and retail electricity sales across Luzon, Visayas and soon Mindanao.

On 27th March 2017, an MPIC led consortium including Covanta Energy, LLC and Macquarie Group, Ltd. was granted Original Proponent Status by the Quezon City Government for a 42 MW energy from waste project. Work is now ongoing toward concession framing which we hope to formalize by the end of the year.

In June 2017, MPIC and Global Power announced that Global Power had entered into an agreement with Alsons Consolidated Resources, Inc. ("ACR") to acquire 50% of ACR's coal generation portfolio holding company in Mindanao, subject to fulfilment of certain conditions.

MERALCO

MERALCO's Core Net Income for the first six months of 2017 fell by 3% to ₱10.1 billion. Distribution revenues rose by 3% in line with volume growth on flat tariffs but were more than offset by higher operating expenses from increased customer load growth, increased provisions and a decline in profit contribution from subsidiaries.

The 3% growth in energy sales was led by the commercial sector which grew 4% on continued expansion of the Business Process Outsourcing industry and a 4.5% increase in MERALCO's customer base to 6.2 million.

Total revenues rose by 9% to ₱141 billion due to higher pass-through generation charges owing to significantly higher fuel prices driven by the scheduled maintenance shutdown of the Malampaya gas facilities and higher prices in the Wholesale Electricity Spot Market.

MERALCO spent ₱5.3 billion on capital expenditures in the first half of 2017 to address critical loading of existing facilities and to accommodate growth in demand and customer connections. MERALCO surpassed the previous year's operating performance for system loss, achieving a record best of 6.1% at the end of June 2017, 2.4 percentage