Vol. XXII, No. 80 [ BusinessWorld Online ]
Friday, November 14, 2008 | MANILA, PHILIPPINES
PANGILINAN-LED holding firm Metro Pacific Investments Corp. (MPIC) may go slow on acquisitions next year, but will remain on the lookout for opportunities that may come due to falling share prices.
MPIC Chairman Manuel V. Pangilinan told reporters in a briefing yesterday it would be harder to buy companies in 2009 given tight credit.
But he expects the group to post better numbers next year as the it integrates the full revenues and earnings of its recent acquisitions — Lopez family’s toll road business and Davao Doctors Hospital, Inc.
"The advantage of Metro Pacific is that it had several acquisitions that would boost its 2009 numbers to multiples of its 2008 earnings," he said.
Mr. Pangilinan said he does not expect the country to slide into a recession in the traditional definition of two consecutive quarters of negative growth, but the country would most likely experience a slowdown.
MPIC posted a core net income of P143.3 million in January to September, a turnaround from the year ago’s loss of P170.6 million.
The firm traced the improvement to the performance of utility arm Maynilad Water Services, Inc. and the contributions of Medical Doctors, Inc. and Davao Doctors.
Including nonrecurring gains from the conversion into stocks of Medical Doctors’ debt instrument, the group’s net income reached P660 million for the nine-month period against a loss of P218.4 million a year earlier. MPIC declined to disclose third-quarter figures.
Maynilad was Metro Pacific’s biggest earner, contributing P735.6 million, as core profits reached P1.75 billion during the period.
Mr. Pangilinan noted that while falling share prices present opportunities for acquisitions, it also means that raising funds through equity could unnecessarily dilute ownership.
But MPIC’s parent, Hong Kong’s First Pacific Co. Ltd., is not averse to having its ownership diluted.
Mr. Pangilinan also said the firm was open to selling its 51% stake in property unit Landco Pacific Corp. to partner AB Holdings Corp.
"If they have the money, they can buy us out," he said, adding that MPIC’s interest in Landco is worth P1.15 billion.
In a separate interview, AB Holdings Director Alfred Xerez-Burgos said they would decide on Monday whether to exercise its first option to buy Landco.
He added that MPIC could buy out its partner if it fails to exercise its right.
Mr. Pangilinan said the group was no longer interested in entering the power sector, adding that doing so now would be too late in the game. Metro Pacific earlier pulled out of a planned entry into the biofuel industry after the financial model presented to them by potential partner Basic Energy Corp. did not meet profit expectations.
The firm also said yesterday it had completed the acquisition of toll operator First Philippine Infrastructure, Inc. (FPII) from Lopez-led firms First Holdings Corp. and Benpres Holdings Corp.
This gives it a 67% stake in the Manila North Tollways Corp., the concession holder of the North Luzon Expressway, and almost half of Tollways Management Corp.
Metro Pacific said it had paid P12.26 billion for a 99.83% stake in FPII. Metro Pacific paid P11.8 billion in cash and assumed debt of the Lopez firms worth P462.63 million. — Don Gil K. Carreon
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