MANILA -- Metro Pacific Investments plans to divest non-toll road assets of Nusantara Infrastructure after the Philippine conglomerate became the biggest shareholder of the Indonesian company.
Metro Pacific plans to make Nusantara a dedicated toll road company, and will seek shareholder approval to sell other assets in telecom, water and port operations, officials said on Wednesday.
Metro Pacific Tollways announced on Monday it increased its stake in Nusantara to 47.08% from around 5% for $132 million. The company operates around 35 kilometers of roads in Jakarta and handles around 300,000 cars per day.
The acquisition advanced Metro Pacific's bid to build a regional tollway network and cements its position as one of Southeast Asia's largest private toll road companies. The Philippine company, which is a unit of Salim Group's Hong Kong-listed holding firm First Pacific, earlier invested in Thai and Vietnamese toll road operators.
"Hopefully we can complete something in Malaysia next year," Chairman Manuel Pangilinan told reporters on Wednesday. He added they are also looking at Myanmar.
The company expects revenues from toll operations -- which stood at 9.6 billion pesos ($187 million) at end September -- to increase by 14% on an annual basis with the consolidation of Nusantara.
Metro Pacific Tollways Chief Financial Officer Christopher Lizo said toll regimes in Indonesia and Philippines are similar, but the former's regulations were more predictable. Metro Pacific was allowed to increase toll rates in one of its local concessions recently, after five years of grueling negotiations with state regulators that forced the company to seek arbitration.
Metro Pacific's tollway business posted a core net income of 3.0 billion pesos from January to September, up by 28% from a year ago as daily vehicular traffic at its three toll roads rose 10% to 438,7111 cars. Its power business under Manila Electric recorded a core profit of 15.4 billion pesos, up by 3% after energy sales grew 4%. Maynilad Water Services, which distributes water to half of Metro Manila households, saw a core net income of 5.6 billion pesos, up by 3%.
The infrastructure conglomerate reported that core net income grew 22% to 11.3 billion pesos during the nine-month period, prompting the company to set a core earnings target of 13.8 billion for full year 2017, up by 14% from last year.