Grew earnings through the headwinds rather than being carried by them
Across the archipelagos of Southeast Asia, First Pacific Co Ltd concluded 2025 with seven consecutive years of earnings growth — a quiet testament to operational discipline in a region where currencies and geopolitics rarely hold still. Recurring profit reached $740 million and revenues hit record levels at three major subsidiaries, even as the rupiah and peso shed double-digit value against the dollar. The achievement is real, but so is the caution embedded in it: leadership returned record distributions to shareholders while conserving capital for a future that carries genuine uncertainty.
- Currency depreciation of 11–14% across Indonesia and the Philippines threatened to swallow operational gains whole, making every dollar of profit growth harder-won than the headline numbers suggest.
- Record revenues at Indofood, PLDT, and MPIC — with Metro Pacific posting its highest earnings ever — signal that the underlying businesses are performing near the ceiling of their current capacity.
- A dividend payout that grew only 6% against 10% earnings expansion unsettled some investors, prompting management to clarify that a special dividend tied to Metro Pacific's IPO brought total shareholder returns in line with profit growth.
- The Middle East conflict casts a shadow over raw material costs for Indofood and energy pricing for PLP, with company representatives offering cautious reassurance rather than firm guarantees.
- With no major debt due until September 2027 and an improved interest coverage ratio of 4.5 times, the balance sheet is positioned to absorb the capital demands of PLP's new gas plant, which won't come online until 2029.
First Pacific Co Ltd closed 2025 with its seventh consecutive year of earnings growth, recurring profit climbing 10 percent to $740 million and revenues reaching record levels at Indofood, PLDT, and Metro Pacific Investments Corporation. MPIC posted its highest earnings ever, and the company's gross asset value stood at $5.3 billion. Total turnover edged up 2 percent to just over $10 billion — numbers that, on their face, warrant genuine celebration.
But the company's leadership was deliberate about context. The rupiah weakened roughly 11 percent against the dollar and the Philippine peso fell about 14 percent — currency movements that, for a holding company deeply rooted in Indonesia and the Philippines, translate directly into bottom-line pressure. Net profit still grew 10 percent to $661 million, and the full-year dividend of 27 Hong Kong cents per share was the highest in company history. Yet the regular dividend rose only 6 percent, a figure some investors read as restraint. Management explained that a special dividend tied to Metro Pacific's IPO brought total distributions in line with earnings growth, while capital preservation for PLP's planned gas-fired power plant — not operational until 2029 — remained a priority.
The operating companies told distinct stories. Metro Pacific's core profit jumped 15 percent, driven largely by Meralco. Indofood's core profit grew just 1 percent to a record, suggesting the Indonesian food giant is running near capacity. PLDT held a 52 percent EBITDA margin. Philex Mining continues working its Padcal mine through 2028 while the Silangan project advances. The interest coverage ratio improved to 4.5 times, and no significant debt matures until September 2027.
The horizon carries real uncertainty. The Middle East conflict raises questions about wheat costs for Indofood and energy prices for PLP, though management offered measured reassurance on both fronts. A water tariff adjustment of only 4 percent is expected in 2026, down from 10 percent the prior year. The company also exited its sugar operations, removing a persistent drag — though not without some asset impairment charges. First Pacific's 2025 story is ultimately one of resilience meeting prudence, with the harder tests still ahead.
First Pacific Co Ltd closed out 2025 with the kind of year that looks stronger the longer you stare at it. The company's recurring profit climbed 10 percent to $740 million, marking the seventh straight year of earnings growth. Revenues hit record levels across three of its major operating companies—Indofood, PLDT, and Metro Pacific Investments Corporation—with MPIC posting its highest earnings ever. The company's gross asset value stood at $5.3 billion as of year-end, and total turnover edged up 2 percent to just over $10 billion. On the surface, these are the kinds of numbers that warrant celebration.
But the company's leadership was careful not to oversell the achievement. The gains came despite significant headwinds that, in a different year, might have derailed progress entirely. The rupiah weakened roughly 11 percent against the dollar, while the Philippine peso fell about 14 percent. For a diversified holding company with substantial operations across Indonesia and the Philippines, currency movements of that magnitude don't disappear into rounding errors—they hit the bottom line. The company's net profit did grow 10 percent to $661 million, and the board approved a final distribution of 14 Hong Kong cents per share, bringing the full-year payout to 27 Hong Kong cents, the highest on a per-share basis in the company's history. Yet the regular dividend itself increased only 6 percent year-on-year, a figure that some investors read as cautious.
When pressed on that apparent contradiction during the earnings call, the chief financial officer explained that the 6 percent regular dividend growth aligned reasonably with the 10 percent earnings expansion, and that when you factored in a special dividend tied to Metro Pacific's initial public offering, total shareholder distributions had indeed grown by roughly 10 percent. The company was trying to thread a needle: returning cash to shareholders while preserving capital for reinvestment, particularly for PLP's planned new gas-fired power plant, which isn't expected to begin operations until 2029.
The operating companies themselves told different stories. Metro Pacific's core profit jumped 15 percent, buoyed significantly by Meralco, the Manila Electric Company. Indofood's core profit edged up just 1 percent to a record level, suggesting the Indonesian food conglomerate is operating near capacity. PLDT maintained a strong EBITDA margin of 52 percent. Philex Mining, the company's natural resources arm, continues operating its Padcal mine through 2028 while the Silangan project moves toward commercial operations. The interest coverage ratio—a measure of how comfortably a company can service its debt—improved to 4.5 times in 2025 from 4 times the year before, and the company has no significant borrowings due until September 2027.
Yet uncertainty clouds the outlook. The Middle East conflict raised questions about raw material costs for Indofood and energy prices for PLP. Company representatives said Indofood has adequate wheat supplies and expects a solid global crop, while PLP's gas supply disruptions have been minor so far. But they acknowledged that electricity prices could shift depending on how long the conflict persists. In the water business, Metro Pacific Investments' subsidiary is expecting a 4 percent tariff adjustment in 2026, more modest than the 10 percent increase from the prior year. The company also wound down its sugar operations in 2025, eliminating a persistent drag on results, though some asset impairment provisions were taken in connection with the exit.
First Pacific's story, then, is one of operational resilience meeting financial prudence. The company grew earnings meaningfully despite currency headwinds that would have crushed many competitors. It returned record amounts to shareholders while maintaining a fortress balance sheet. But the moderation in dividend growth and the careful language around geopolitical risks suggest the company's leadership is bracing for a more complicated environment ahead. The next test will come when PLP's major capital project kicks into high gear and when the company's exposure to raw material and energy markets becomes clearer.
Notable Quotes
The 6% growth in regular dividends is in line with the 10% growth in recurring earnings, and including the special dividend from the MPIC IPO, total growth is about 10%— Hon Pong Ng, CFO
Indofood has sufficient wheat supply and expects a good global crop, so there's no immediate concern about raw material costs from the Middle East conflict— John Ryan, Associate Director
The Hearth Conversation Another angle on the story
The dividend growth seems oddly restrained for a company posting 10% earnings growth. What's really going on there?
They're being deliberate about it. The CFO pointed out that the 6% regular dividend increase actually tracks with the underlying earnings growth when you look at it properly. But they're also holding back because they need to fund PLP's new power plant, which is a multi-year, capital-intensive project. It's a choice to prioritize balance sheet strength over maximum near-term payouts.
And the currency headwinds—how much of that 10% profit growth is real versus just a statistical artifact?
That's the right question. The rupiah and peso both fell sharply, which normally would have created currency losses. But the company still managed 10% earnings growth despite that drag. So the underlying operational performance was actually stronger than the headline number suggests. They grew through the headwinds rather than being carried by them.
What about the Middle East risk they mentioned? How real is that threat to their business?
It's real but not immediate. Indofood has wheat supplies locked in and expects a good global harvest, so they're not panicked yet. PLP's gas supply has been stable. But if the conflict drags on and energy prices spike, that could squeeze margins. They're watching it closely but not yet seeing material impact.
The dividend distribution hit a record on a per-share basis. How did they square that with the modest regular dividend increase?
The special dividend from the MPIC IPO made up the difference. So total shareholder returns grew about 10%, matching earnings growth. It's a bit of accounting choreography, but it's honest—they're returning more cash overall, just not all of it through the regular dividend.
What's the significance of the interest coverage ratio improving to 4.5x?
It means the company is in strong financial health and has plenty of room to borrow if needed for capital projects. They're not stressed on debt service at all. Combined with no major borrowings due until 2027, they have a stable runway ahead.