METRO PACIFIC Invests Corp. (MPIC) was one of the most successful stocks last week as investors responded to the news of its purchase of a terminal for petroleum products and the revocation of its company license for toll operations.
Data from the Philippine Stock Exchange shows a total of 173.64 million MPIC shares worth P765.28 million from Dec. 7-11, rendering it the twelfth most actively traded stock on the local stock exchange last week.
Shares in the Manuel V. Pangilinan-led firm closed down by 3.5 percent week-on-week to P4.39 apiece from its P4.55 finish on Dec. 4. Since the beginning of the year, the stock has risen by 30.7%.
Local capital markets were closed on December 8 to celebrate the Feast of the Immaculate Conception.
“[MPIC] was one of the successful stocks last week on its announcement for the purchase of the Petroleum Coastal Storage & Pipeline Corp. (PCSPC) in collaboration with Keppel Infrastructure Trust (KIT). It was also impacted by the termination of its toll service in Valenzuela,” Diversified Shares, Inc. Equity Dealer Aniceto K. Pangan claimed it was in a text message.
“Investors replied favorably to the takeover news as prices increased,” Pangan said.
“[T]he suspension of its affiliate toll roads [permit] to receive toll payments at the Valenzuela exchange overshadowed reports of the recent takeover of the parent firm,” said Jonathan J. Latuja, Senior Stock Research Analyst at the Philippine National Bank (PNB) in an e-mail interview.
In its disclosure on Wednesday, MPIC reported that it had partnered with KIT, the Singapore-listed business trust, to acquire a company that runs the “largest” terminal for imports of petroleum products in the Philippines.
MPIC and its affiliate announced that they had entered into a selling and purchase arrangement with the Philippine Investment Partnership for Utilities to buy the Philippine Coastal Storage & Pipeline Corp.
MPIC announced that it will initially retain a 20% interest in the parent company of the Philippine Coastal Storage & Pipeline, the Philippine Tank Storage Foreign Holdings, Inc., for a transaction of $67 million. KIT would own 80% of the shares indirectly.
“In the long run, this acquisition would prove helpful to the development of the business as energy is one of the country’s requires for the economy to expand,” Pangan continued.
Mr. Latuja said the management believes that the acquisition of PCSPC would be “profitable and profitable,” especially with the country’s increasing long-term demand for petroleum products and a lack of storage ability.
“While its contribution would not be as important as the expenditure in electricity, water and toll roads in the company, MPIC sees PCSPC as an interesting sector with high margins, good growth opportunities and an alternate source of steady cash flows,” said Mr. Latuja.
Meanwhile on Monday, Valenzuela City Mayor Rex T. Gatchalian revoked NLEX Corp.’s business license in the region in the middle of intense traffic triggered by the introduction of its cashless toll payment scheme.
NLEX Corp. is the constructor-concessionaire of two main expressways linking Metro Manila to North and Central Luzon—the North Luzon Expressway and the Subic-Clark-Tarlac Expressway. The toll operator is a division of Metro Pacific Tollways Corp., MPIC’s toll operations company.
MPIC’s top line fell by 15.6 percent year-on-year to P46.18 billion in the nine months to September. Similarly, the attributable net profits decreased by 57.6 per cent to P5.01 billion.
Its toll operations accounted for around a quarter of MPIC’s sales so far this year, with water (40 per cent) and electricity (35 per cent) being the only two.
The organization estimates its full-year core net profits to be just above P10 billion, down from last year’s completion of P15.6 billion.
“At this moment of the pandemic, sales will certainly be a problem owing to accessibility constraints. While MPIC has improved output in the third quarter relative to the second quarter,” Pangan said.
“This year, we predicted revenues to contract by 11.3 per cent year-on-year mainly due to the effect of the lockout on its toll road market,” said Mr. Latuja.
Mr. Pangan said that before MPIC addresses its problems in Valenzuela Region, its share price will be stabilized this week with help and resistance levels of P4.35 and P4.50, respectively.