MPIC dips as NLEX issues eclipse petroleum storage acquisition

METRO PACIFIC Investments Corp. (MPIC) was among the most active stocks last week as investors reacted following news of its acquisition of a petroleum products terminal and the suspension of its toll operations’ business permit.

Data from the Philippine Stock Exchange showed a total of 173.64 million MPIC shares worth P765.28 million were traded from Dec. 7-11, making it the twelfth most actively traded stock in the local bourse last week.

Shares in the Manuel V. Pangilinan-led company closed lower by 3.5% week-on-week to P4.39 apiece from its P4.55 finish on Dec. 4. The stock has gone up 30.7% since the start of the year.

Local financial markets were closed on Dec. 8 to commemorate the Feast of the Immaculate Conception.

“[MPIC] was among the active stocks last week on its disclosure for the acquisition of the Petroleum Coastal Storage & Pipeline Corp. (PCSPC) in partner with Keppel Infrastructure Trust (KIT). Also, it was affected by the suspension of its toll operation in Valenzuela,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.

“Investors reacted positively on the news of acquisition as price moved up,” Mr Pangan added.

“[T]he suspension of its toll roads subsidiary’s [permit] to collect toll payments at the Valenzuela interchange overshadowed news about the parent company’s latest acquisition,” Philippine National Bank (PNB) Senior Equity Research Analyst Jonathan J. Latuja said in an e-mail interview.

In a disclosure on Wednesday, MPIC said it partnered with KIT, a business trust listed in Singapore, to acquire a company that operates the “largest” petroleum products import terminal in the Philippines.

MPIC and its partner said they entered into a sale and purchase deal with the Philippine Investment Alliance for Infrastructure to acquire the Philippine Coastal Storage & Pipeline Corp.

MPIC said it would initially hold a 20% stake in the parent firm of the Philippine Coastal Storage & Pipeline, the Philippine Tank Storage International Holdings, Inc., for a purchase consideration of $67 million. KIT will indirectly hold 80% of the shares.

“In the long term, this acquisition will prove beneficial to the growth of the company as energy is among the needs of the country for the economy to grow,” added Mr. Pangan.

Mr. Latuja said management believes that the acquisition of PCSPC will be “profitable and earnings-accretive” especially with the country’s growing long-term demand for petroleum products and shortage in storage capacity.

“Although its contribution will not be as significant as the conglomerate’s power, water, and toll roads investments, MPIC sees PCSPC as an attractive business with high-margins, strong growth potential, and additional source of stable cash flows,” Mr. Latuja said.

Meanwhile, Valenzuela City Mayor Rex T. Gatchalian on Monday suspended NLEX Corp.’s business permit in the area amid the heavy traffic caused by the implementation of its cashless toll payment system.

NLEX Corp. is the builder-concessionaire of two major expressways that connect Metro Manila to North and Central Luzon — the North Luzon Expressway and the Subic-Clark-Tarlac Expressway. The toll operator is a subsidiary of Metro Pacific Tollways Corp., the toll operations unit of MPIC.

MPIC’s top line dipped by 15.6% year on year to P46.18 billion during the nine months to September. Likewise, its attributable net income declined by 57.6% to P5.01 billion.

Its toll operations have accounted for about a fifth of MPIC’s revenues so far this year, next only to water (40%) and power (35%) units.

The company expects its full-year core net income to finish at a little over P10 billion, down from its P15.6-billion finish last year.

“Definitely, revenue would be a challenge in this pandemic time due to mobility restrictions. Though MPIC has better performance in the third quarter as compared to the second quarter,” Mr. Pangan said.

“We forecast revenues to contract this year by 11.3% year-on-year primarily due to the impact of the lockdown on its toll roads business,” Mr. Latuja said.

Mr. Pangan said until MPIC resolves its problems in Valenzuela City, its share price will consolidate this week with support and resistance levels of P4.35 and P4.50, respectively.

MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in ����ý through the Philippine Star Group, which it controls. — Lourdes O. Pilar