MPI – Profitability

I previously discussed MPI’s basic fundamentals which consists of  it’s Asset, Liability and Equity analysis, paired with “Key Financial Ratios” that provides us insights of the company’s stability and earning power. Today I will focus on the “Income Statement” side of the company that will tackle its profitability and use of financial leverage.

Let’s start with its Net Income:

Over the years MPI's Net income is growing at a faster pace as the company expands its operation, I also want to emphasize the company's double digit PMRs' (Profit Margin Ratio) growth. The company attributed their better earnings with the strong Toll road revenue due to the significant increase in traffic growth, mainly because of the high vehicle sales in the country.

Water and Hospital revenue made a decent growth mostly because of the El Niño we encountered in the first half of the year. The company said it would have been much stronger if it weren't for the "ongoing delay on tariffs increases*".

Overall operating revenue of MPI was in its highest last year as a result of its major expansion thru major acquisitions (i.e. On April 17, 2015, MPIC acquired additional MERALCO shares from Beacon Electric, bringing effective ownership in MERALCO to 32.48% from 27.48% in 2014).

We also need to take note the increase in the amount of Operating expenses of the company last 2015, although, the growth of OPEX slowed down a little. However, as long as the company maintains its high percentage of Net Income growth, we are still safe to say that MPI would still be profitable.

Summary

MPI expanded its operations last year and may reap what it sow this year. We still need the 3rd quarter report to project if it would exceed its 2015 earnings. But as we can see on it's first half results, MPI is on track on another good year earnings. I still have so much to add and will update as soon as I got the time. Whoever read the whole thing, a big thanks to you. Still new with this, so feel free to comment on what I have to improve/add/remove or any suggestion is gladly accepted. Happy investing, GLHF.

*“Our earnings would be still stronger were it not for the ongoing delay in tariff increases
for our water and tollroads businesses. We are greatly encouraged by initial indications from
the new Administration that we will be able to move to a swift resolution of these key pending
matters.” - MPI 2016 2nd Quarter FS