2007 Annual Report
Total Page：16
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Metro Pacific Investments Corporation is a Philippines based, publicly listed, investment and management holding company with businesses in water utility, real estate development and hospital care. More information about MPIC can be accessed at www.mpic.com.ph Mission and Vision To become one of the largest business conglomerates in the Philippines, accelerating national economic development by creating long-term value for our shareholders through prudent management of key assets in vibrant sectors of the economy. Corporate Structure METRO PACIFIC INVESTMENTS CORP. DMCI-MPIC Water Co., Inc. Metro Pacific Corp. Landco Pacific Corp. Medical Doctor’s, Inc./ Makati Medical Center 50% 97% 51% 33% Maynilad Water Services, Inc. 84% Contents 2 Financial Highlights 4 Chairman’s Letter 6 President’s Message 10 Board of Directors and Officers 14 Maynilad Water Services, Inc. 18 Landco Pacific Corporation 24 Medical Doctor’s, Inc. (Makati Medical Center) 27 Corporate Governance 29 2007 Audited Financial Statements Financial Highlights Growth in our overall investment portfolio, as well as the contribution from our existing operating companies, are expected to improve our core net income in 2008 compared with 2007. 2007 Significant Events January May July Completed sale transaction of 83.97% of MPIC completed new investment in Makati Maynilad overhauled the entire 18-kilometer Maynilad Water Services Company to MPIC Medical through subscription of Pesos pipeline network of Paco and Pandacan and its partner, DMCI Holdings. 750 million in Convertible Subordinated for Pesos 147 million to benefit 18,336 Notes issued by Medical Doctors (Clinica households with clean and improved water March Hilario), Inc. with mandatory conversion into pressure. Landco formed a joint-venture with the direct ownership of 33% in Makati Medical Villalon Family of Cebu City to develop and Center. August sell a 210-hectare mountain-side property Maynilad signed agreements with its named Monterrazas de Cebu as an June lenders and the government to pave the ultimate residential and leisure estate. Landco formed a joint-venture with the way for early exit from rehabilitation. Lazatin Family of San Fernando, Pampanga Maynilad allotted P5 billion capital for the development of a 48-hectare Makati Med inaugurated Bone Marrow expenditure program for the improvement property named WoodGrove Park Transplant unit, the second facility of its of the west zone water system. kind in the Philippines. Maynilad appointed former Bases Conversion Development Authority chairman, Rogelio L. Singson as president. 2 Metro Pacific Investments Corporation 261 (13) September October May 2008 Maynilad completed interconnection Maynilad launched Pesos 949 million MPIC signed share purchase agreements of the Binakayan 600-mm bridge pipe program to lay 120 kilometers of new with several shareholders of Davao crossing which linked Maynilad’s supply line pipelines in Quezon City to benefit 190,300 Doctors Hospital Inc. to acquire a total of from Bacoor, Cavite to the Kawit side of people. approximately 34% of the issued share Binakayan River to provide increased water capital of the corporation for Pesos 498 supply in 18 barangays in Kawit. February 2008 million. Maynilad exited from a court-administered rehabilitation and aggressively advanced Landco launched groundbreaking in a wide-ranging expansion and facilities Samal Island to develop Playa Azalea, a improvement in line with its strategic goals. 33-hectare leisure residential destination through a partnership with Anflocor headed by business magnate Antonio Floirendo, Sr. Annual Report 2007 3 Chairman’s Letter Presently, MPIC is looking at the areas of healthcare, natural resources – specifically mining, agriculture, and biofuels – and infrastructure. MPIC regards these sectors as offering significant potentials because they offer key advantages: considerable market size, acceptable competitive levels, and our ability to make management inputs that can drive profitability higher. 4 Metro Pacific Investments Corporation To my fellow shareholders, I am gratified to report on the performance for the year together with other healthcare opportunities we are looking 2007 of Metro Pacific Investments Corporation (MPIC). to realize in the near-term, will put MPIC on its way MPIC has returned to profitability in the past year, after to building a nationwide system of first-rate healthcare having spent several years diligently laboring to recover its institutions. financial strength, following the difficulties caused by the Asian financial crisis of 1997. As MPIC regains its firm footing, your Company is now fully capable – and is in fact mandated – to identify and Landco Pacific Corporation (Landco) – the only surviving pursue opportunities which could be transformational for investment as Metro Pacific Corporation transitioned to both this country and your Company. Presently, MPIC MPIC – led this watershed year by recording an historic is looking at the areas of healthcare, natural resources high net income of Pesos 261.2 million, against a net loss of – specifically mining, agriculture, and biofuels – and Pesos 12.9 million in 2006. Its recent entry into the urban infrastructure. MPIC regards these sectors as offering community segment is expected to perform as well as its significant potentials because they offer key advantages: traditional leisure property projects. considerable market size, acceptable competitive levels, and our ability to make management inputs that can drive Our positive outlook on the investment made in Maynilad profitability higher. Water Services Inc. (Maynilad) in 2006 has been fully justified, given its significant contribution of Pesos 679.9 Growth in our overall investment portfolio, as well as million to MPIC’s core net earnings for 2007. Maynilad the contribution from our existing operating companies, officially exited from its court-administered rehabilitation are expected to improve our core net income in 2008 program in early 2008, and is now positioned to make compared with 2007. Maynilad’s contribution this year significant service improvement initiatives. The considerable will be free from the financing charges incurred during the capital expenditures that will be made in expanding investment. We expect the contribution from our healthcare and raising the service quality within its West Zone investments to show improvement, with the enhancements Concession is crucial in achieving the directive to Maynilad made at Makati Medical through its Facilities Improvement Management to transform the company into a profitable, Program, and Davao Doctors providing a new source of world-class, customer-oriented company. income for MPIC. With respect to Medical Doctors Inc. (MDI) – owner and As we continue building MPIC into a transformed business, operator of Makati Medical Center (Makati Medical)—we I would like to extend our sincerest gratitude to our converted in full the Pesos 750.0 million in Subordinated shareholders for their continued patience and support, and Convertible Notes in it at the start of 2008, giving us to our Board of Directors for their guidance. a 33.45% ownership of MDI. As the single largest shareholder in our country’s premier healthcare institution, Sincerely we are actively engaged in the strategic direction and management of Makati Medical. MPIC’s favorable experience in Makati Medical has laid the grounds for our optimism on the healthcare industry as a whole, an optimism which is reflected in our recent Manuel V. Pangilinan acquisition of a 34% interest in Davao Doctors Hospital Chairman (Clinica Hilario), Inc. (Davao Doctors). As with Makati Medical in Metro Manila, DDH is the leading hospital 30 June 2008 in the Southern Mindanao area. This recent investment, Annual Report 2007 5 Letter from the President and Chief Executive Officer To my fellow shareholders, Metro Pacific Investments Corporation delivered its first Maynilad’s core net income contribution from operations, full year of robust business and financial results in 2007. net of financing charges and transaction expenses incurred We have met the challenge to return the Company to by DMCI-MPIC Water Company (DMCI-MPIC), the financial health, clearing its debt obligations, having made investment vehicle for Maynilad was Pesos 129.4 million, management adjustments that have produced improved representing 46.6% of MPIC’s total contribution from financial performance in our operating companies, and operations of Pesos 277.5 million. are now focused on producing consistent improvements in those companies, and growing our portfolio of investments. The exit of Maynilad from its court-administered rehabilitation will allow it to presently make significant FISCAL PERFORMANCE investments in its system improvement initiatives in the For 2007, I am pleased to report that your company short to medium term. Among these improvements is the generated core earnings of Pesos 194.9 million, compared reduction of non-revenue water (NRW). This reduction with a net loss of Pesos 25.4 million in the year 2006. in NRW is critical if Maynilad is to offer water at an Inclusive of non-recurring items, net income stood at Pesos improved pressure, over a greater part of the -- if not entire 167.9 million for this year, against a net loss of Pesos 685.9 -- day, to more customers. million in 2006. LANDCO The considerable improvement in net income for the year Landco’s net income for the year stood at Pesos 261.2 is largely attributed to the strong showing of MPIC’s two million versus last year’s net loss of Pesos 12.9 million as operating companies, Maynilad and Landco. Maynilad revenues jumped 191% to Pesos 2.08 billion from last reported net income of Pesos 1.25 billion for 2007 and year’s Pesos 712.4 million. The success of its residential contributed Pesos 679.9 million to MPIC’s core net income resort projects -- the Ponderosa Leisure Farms, Amara for the year. Landco’s results for the year showed a net en Terrazas, Playa Calatagan, Leisure Farms, Terrazas de income of Pesos 261.2 million compared with a loss of Punta Fuego and Montelago -- contributed significantly to Pesos 12.9 million last year, and provided Pesos 139.4 the increase in revenues.