Meralco expected to reach net profit of P18.5B this year

by Lenie Lectura – December 7, 2015

from Business Mirror

THERE’S a “good chance” that the Manila Electric Co. (Meralco) will achieve its core net-profit guidance of P18.5 billion for the year, its top official said.

“Most likely. Certainly, in terms of meeting its guidance number for the full year, there’s a good chance that number can be met,” Meralco Chairman Manuel V. Pangilinan said.

The P18.5-billion profit guidance is higher than the company’s P18.1-billion actual core net income last year.

Pangilinan is confident that higher power sales will be the main driver for the full-year growth.

“Surprisingly, the volume of power sold has risen starting May this year such that the year-to-date growth is 5 percent,” said the Meralco official, adding that the 5-percent growth is “slightly ahead of our expectations and ahead of what historic growth rate of power sold by Meralco has been, which is typically around 3 percent.”

Soaring power sales helped boost Meralco’s core profit from January to September this year at P15.8 billion, up by 11 percent compared with 2014. Net income also grew to P16.1 billion, up 13 percent from the same period a year ago.

On a quarterly basis, Meralco’s third-quarter numbers stood at P4.4 billion in reported net income and P4.15 billion in core profit. The figures are lower than last year’s P4.67 billion in reported net income and P4.4 billion in core income.

Revenues, of which electricity sales accounted for 97 percent, declined by 3 percent to P197 billion due to lower distribution tariff and lower pass-through generation charge, among others.

Pangilinan explained that power demand started to become strong in May. It was rather weak in the first quarter and came strongest in the second quarter and continued to strengthen up to October this year. This scenario gives the utility firm “a fair degree of confidence” that revenue will be ahead of budget and, therefore, meet the core guidance of P18.5 billion.

At end-September this year, Meralco’s energy sales grew by 4.7 percent to 27,496 gigawatt hours, driven largely by growth in the residential segment of 5.7 percent.

For the first 26 days of October, Meralco sales already grew by 7.6 percent.

Meralco customers stood at 5.7 million at end-September this year, with almost 168,000 new customer accounts since September 2014. Residential customers represent 92 percent and commercial customers account for 8 percent of total customer count.