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First Pacific group unit in Philippines sets $1.8-billion capex
Publication Date : 20-03-2014
The Philippine unit of Hong Kong-based investment management and holding firm First Pacific Co. has earmarked about 81 billion pesos (US$1.807 billion) in fresh capital outlay this year to grow its infrastructure, telecom and mining businesses in the country.
For 2013, infrastructure holding firm Metro Pacific Investments Corp. (MPIC) expanded its net income attributable to shareholders of parent firm by 22 per cent to 7.2 billion pesos ($160 million), led by water and power businesses.
“All our businesses achieved strong growth in profitability for the year,” MPIC president Jose Ma. Lim said. “We anticipate continued strong volume growth in 2014 for all our subsidiaries but given uncertainties over regulatory stability for water, road and power prices, we are in no position to give earnings guidance for 2014.”
The increase in core income was attributed to the more efficient management of head office expense but this was partially offset by the 16-per cent rise in interest expense and a 4.7-billion-peso ($104 million) loan contracted for the acquisition of an expressway south of Manila called the Manila-Cavitex Expressway .
For the MPIC group, about 44.5 billion pesos ($99.3 million) have been budgeted for capital expenditure this year, about 40 per cent of which would be for projects committed by water utility unit Maynilad Water Services Inc. and another 35 percent for Manila Electric Co., MPIC chief finance officer David Nicol said in a briefing yesterday.
For toll roads, the budget for capital expenditure is 7 billion pesos ($156 million) while for hospitals, as much as 4 billion pesos ($89 million).
Including the 32-billion-peso ($714 million) capital spending budget for telecom giant Philippine Long Distance Co. (PLDT) and as much as 4.6 billion pesos ($101 million) for Philex Mining, two companies where First Pacific Co. Ltd. is also the controlling shareholder, the total spending by the group led by Filipino businessman Manuel V. Pangilinan was estimated at 81 billion pesos ($1.807 billion) this year, according to Nicol.
For 2014, MPIC sees Maynilad’s billed water volume and Meralco’s electricity sales rising by 4 per cent, or about the same pace as last year's.
For toll roads, growth is seen at about 5 per cent without tariff adjustment. Growth would be slower if there would be increase in tariff as higher rates typically reduce usage. In 2013, Metro Pacific Tollways Corp. (MPTC) posted a 6-per cent increase in average daily traffic and 5-percent rise in average kilometers.
“All our businesses are relentlessly focused on service quality and operational efficiency, while growing our sales and core profitability to improve the lives of all our customers—providing first class medical care, offering safe and efficient road transportation, delivering electricity to power homes and businesses, and piping water to improve consumption and sanitation,” Pangilinan said in a statement.