Metro Pacific Tollways 2011 Net Income Up 26% to PhP1.26B

Manila–(PHStocks)–Metro Pacific Tollways Corp. (PSE: TOL) has reported Core Net Income after tax of PhP1.479 billion for the year ended 2011, slightly higher than the Core Net Income of PhP1.465 billion in 2010. The Income Tax Holiday at the Manila North Tollways Corp. (MNTC) level expired in December 2010. Pre-tax income however rose by 23% to PhP1.873 billion due to prudent management of operating and financing costs and a modest adjustment in toll rates. Reported Net Income, which included exceptional expenses and non-cash expenses related to the refinancing of outstanding loans, stood at PhP1.257 billion compared with PhP996.5 million in 2010, an increase of 26.2%.

The slight improvement in Core Net Income of MPTC for the period is attributable to the higher revenues reported by MNTC and the higher contribution of Tollways Management Corp. (TMC). MNTC holds the concession to operate and maintain North Luzon Expressway (NLEX) and is owned 67.1% by MPTC. TMC operates the NLEX for MNTC and has an interim agreement to operate and maintain Subic-Clark-Tarlac Expressway (SCTEX), and is owned 46% by MPTC. MNTC signed a Business Operating Agreement (BOA) with BCDA for the management, operation and maintenance of SCTEX last October 2011 and will take over SCTEX once the approval of the President is secured.

MNTC

MNTC reported a Core Net Income of PhP1.993 billion for the year ended 2011, slightly higher compared with the Core Net Income of PhP1.969 billion reported in 2010. After deducting non-recurring expenses, Net Income for the period, stood at PhP1.580 billion, higher by 20.8% from 2010’s Net Income of PhP1.308 billion.

Toll Revenues of PhP6.465 billion for the period was higher by 10.4% compared to the Php5.858 billion reported in 2010 driven by the toll rate adjustment in NLEX. Average vehicle entries (AVE) for the period was reported  at 158,342 per day, lower by 1% compared with 2010. Traffic volume was affected by high fuel prices and inclement weather. MNTC also paid income taxes amounting to PhP550 million pesos with the expiry of its income tax holiday granted for NLEX Phase 1.

Core net income attributed to MPTC stood at PhP1.337 billion representing MPTC’s 67.1% ownership in MNTC.

With the opening of Segment 8.1 in 2010, implementation of NLEX Phase 2 is in full blast with the completion of the detailed engineering designs for the NLEX Harbor Link. This includes Segment 9, a 2.4-kilometer road extending NLEX westward from the end of Segment 8.1 to MacArthur Highway in Valenzuela City, and Segment 10, a 5.6-kilometer road connecting Segment 9 and the entire NLEX system to the North Harbor via C-3 Road. Construction is slated to commence by the fourth quarter of 2012, provided that the Rights-of-Way are completed and delivered by the Government to MNTC.

MNTC has also started the feasibility study of Segment 8.2, a 7.8-kilometer road that will connect NLEX to C-5 and Commonwealth Avenue in Quezon City.

MNTC’s toll road portfolio will increase with the signing in October 2011 of the BOA for the management, operation and maintenance of the Subic-Clark-Tarlac Expressway (SCTEX), a 94-kilometer toll road connecting the economic zones in Subic, Clark and Tarlac. The concession would last for a period of twenty five (25) years, renewable for another eight (8) years. MNTC plans to integrate NLEX and SCTEX allowing for a seamless expressway travel in North Luzon. Approval of the BOA is still being awaited from the Office of the President.

TMC

Core net income for TMC for the period  amounted to PhP405.1 million compared with PhP330.9 million in 2010, higher by 22.4%. Reported net income also increased to PhP414.2 million from PhP353.6 million in 2010, an increase of 17.1%.

Revenues increased to PhP1.752 billion, higher by 8% from PhP1.621 billion in 2010. Revenues recognized by TMC represent Operator’s Fees charged to MNTC and BCDA for the operations and maintenance of NLEX and SCTEX respectively.

Core net income attributable to MPTC for the period amounted to PhP185.6 million representing MPTC’s equity interest in TMC.

MPTC Consolidated

As a result of higher revenues from subsidiaries and the stable operating and maintenance costs offset by the loss of the income tax holiday in NLEX Phase 1, MPTC’s Core Net Income was moderately higher at PhP1.479 billion for 2011, compared with PhP1.465 billion in 2010. Reported Net Income, which included non-recurring expenses, was 26.2% higher at PhP1.257 billion compared with PhP996.5 million in 2010. The non-recurring expenses primarily relate to the refinancing charges booked in MNTC to take advantage of the lower interest rates and longer maturity payments.

Metro Pacific Tollways Development Corp. (MPTDC), a 100% subsidiary of MPTC, is currently negotiating with the Department of Public Works and Highways for the concession agreement of the NLEX-SLEX Connector Road referred to above. The Connector Road is the culmination of many years of plans and efforts to connect the Northern and Southern toll road systems. MPTC expects increased commercial traffic between the two existing systems, as commercial vehicles can now traverse Metro Manila without violating the truck ban, and, by bypassing EDSA and the other streets of Metro Manila, the convenience for all motorists will greatly improve, as travel time between the North and South Expressways will be reduced to no more than 20 minutes. The Connector Road is a 13-kilometer four-lane elevated expressway using a new construction technology that will connect the NLEX Harbor Link to Skyway and SLEX at Buendia Avenue, Makati City.

Cash Dividends

The Board of Directors has also approved the declaration of cash dividends of PhP0.17/share (17.00 centavos per share) or a total of approximately PhP846 million to stockholders as of record date 12 March 2012 payable on 10 April 2012. Together with the PhP500 million cash dividends declared last July 2011, total cash dividends declared in relation to the 2011 core net income represent a 91% payout ratio.

“The Company’s strong operational performance despite the challenging macro economic situation is a reflection of the Company-wide performance driven culture instituted by the management and shareholders. We expect a similar strong performance in 2012. This year, we will continue to focus our efforts on the execution of Segments 8.2, 9 and 10 and, more importantly the Connector Road,” said MPTC President and Chief Executive Officer Ramoncito S. Fernandez.

“The performance of MPTC continues to impress. We are particularly pleased with the high dividend payout ratio of the Company. With the expansion of NLEX and the anticipated integration of SCTEX, MPTC will continue to be the catalyst of economic development in Northern Luzon and in Metro Manila,” said MPIC President and CEO Jose Ma. K. Lim.