Maynilad Water Services, Incorporated is Metro Pacific Investments Corporation’s water and wastewater firm. It serves Metro Manila’s west zone, including Parañaque, Caloocan, Malabon, Pasay, and Navotas.
Moreover, Maynilad caters to some areas in Manila, Quezon City, Makati, and the province of Cavite. The water service provider has delivered its statement regarding its relationship with its investors.
Jose Ma. Lim is the president and chief executive officer of Metro Pacific Investments Corporation.
He relayed that the depreciation expenditures and higher amortization cancelled out the revenue surge for Maynilad.
Hence, Lim said that, as a practical measure, they would not be able to pay out their investors the dividends they are due.
Recently, other water concessionaires in Metro Manila, like the Manila Water Company, Incorporated (MWC), joined Maynilad in making President Rodrigo Duterte feel exasperation.
After they won an arbitration case in Singapore, these firms demanded monetary settlement amounting to P10.8 billion.
The dispute involved the rate surges a few years back that the Philippine government did not implement, according to the Philippine daily newspaper The Philippine Star.
Duterte did not want to pay the water services providers. Besides, he lambasted them for allegedly causing water shortage.
The Philippine chief executive also worked in unilaterally reviewing the 15-year extension of the water service providers’ agreements with the government.
This measure is presently ongoing. The MWC and Maynilad’s deal with the government will expire in 2022 without the extension.
With these events taking place recently, Lim remarked that they had impacted the Metro Pacific Investment Corporation’s water arm.
He pointed to the drop in the cost of their share, together with the prices of other listed firms with government concessions.
Lim relayed that, despite Maynilad’s revenue growth, its investors now affix considerably higher risk premiums for government obedience to contract.
He explained that their discretionary investment expenditure would redirect to less precarious ventures such as tourism, warehousing, and real estate.
The CEO of Metro Pacific Investment Corporation described such spending as to be beyond their committed infrastructure initiatives.
This scenario would take place regardless if there is a massive demand for the services they offer, Lim explained.
Last year, the revenues of Maynilad skyrocketed nine percent.
Because of more water links and higher rates, the water and wastewater company enjoyed a revenue increase amounting to P24 billion.
The core net income of Maynilad finished 2019 flat year-on-year. The water branch of Metro Pacific Investment Corporation posted a P7.7 billion figure.
The company attributed this situation to massive investments in new facilities. Finally, the capital expenditures of Maynilad totaled P12.4 billion last year.
On Wednesday, February 26, 2020, Metro Pacific Investments Corporation (PSE: MPI) closed at P2.97 per share.
Furthermore, the 52-week high of the company is at P5.28. Meanwhile, the Philippine Stock Exchange (PSE) recorded its 52-week low at P2.69.
As for the Manila Water Company, Incorporated (PSE: MWC), it closed at P11.98 per share yesterday.
This last trade price of the company’s stock did not indicate any changes. Moreover, the 52-week high of MWC is at P27.30.
Meanwhile, the PSE recorded its 52-week low at P5.01.