Monday, August 18, 2008 [ philstar.com ]
Metro Pacific Investments Corp. (MPIC) will conduct a strategic review of its real estate development unit Landco Pacific Corp. to determine whether to keep it or sell it as the holding firm pursues larger, more capital-extensive investments in other industries like infrastructure and water.
“Landco is in good financial shape. We just don’t know whether we would like to continue being in this business considering the big players in the industry. If we’re not prepared to grow it then we need to let go of it,” said MPIC chairman Manuel V. Pangilinan.
Pangilinan, however, pointed out that no decision has been made yet with respect to Landco, which he said has been registering steady growth in sales. MPIC holds a 51-percent stake in the property development firm with the balance held by the Xerez-Burgos family.
In the first half this year, Landco reported a core net income of P17.9 million, down 82 percent from the previous level P110.3 million due to the 21-percent decline in recognized revenue from real estate sales sold.
Although sales jumped 91 percent to P2.71 billion, delays in construction for the period impacted negatively on Landco’s ability to recognize those revenues.
Cost of sales and expenses rose six percent to P889.1 million due to higher costs of materials and marketing expenses related to the launching of new projects.
Landco, however, expects its pace of development to increase in the second half of the year.
MPIC is acquiring toll road company First Philippine Infrastructure Inc. from the Lopez family’s First Philippine Holdings Corp. and Benpres Holdings Cop. for P12.2 billion.
The deal values FPII, which runs the expressway connecting Manila to northern provinces, at P2.467 per share.
The acquisition expected to be closed in November, includes FPHC’s stake in a newly-opened expressway linking two growing economic zones north of the capital ‑ Subic Bay Freepot and the Clark Economic Zone.
MPIC is expanding investments in healthcare and infrastructure sectors as well as looking at new segments such as agriculture, biofuels, hospitality and mining that will give it recurring income and ensure long-term profitability.
It signed early this month a memorandum of understanding with Basic Energy Corp. and Basic Biofuels Corp. to assess the feasibility of jointly building ethanol facilities. MPIC is currently conducting an extensive due diligence study of ethanol projects in Zamboanga del Norte and Bukidnon.
Basic Biofuels, formerly Zambo Norte BioEnergy Corp., is the developer, owner and operator of a P3 billion project to establish a sugar cane farm in Zamboanga del Norte and a 200,000-liter ethanol plant.
MPIC, through its partnership with DMCI Holdings Inc., provides water and sewerage services in the west zone of Metro Manila which covers 9 cities and 3 municipalities in Metro Manla and some areas in Cavite.
MPIC also owns 33 percent of Medical Center Inc., which operates and manages the Makati Medical Center. It also recently acquired 34 percent of Davao Doctors Hospital, the largest private hospital in Davao with 250 beds and considered the best medical facility in Mindanao.
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