Meralco registered P18.9-b net income in 2015

by Alena Mae S. Flores – February 26, 2016 at 11:50 pm

from Manila Standard

Manila Electric Co., the largest electricity retailer, reported Friday a consolidated core net income of P18.9 billion in 2015, up four percent from P18.1 billion in 2014.

Meralco said in a disclosure to the Philippine Stock Exchange consolidated reported net income also rose six percent to P19.1 billion from P18.053 billion in 2014.

Reported net income is adjusted to exclude the effect of foreign exchange gains or losses, mark-to-market adjustments, gain on disposal of investment and other one-time, exceptional transactions.

Meralco officials attributed the higher income in 2015 to the unprecedented growth of energy sales in the second half of 2015, with new system peak reaching 6,298 megawatts in August.

Meralco said sales volume growth was close to six percent in 2015, driven by warmer temperatures, low inflation and electricity rates and a healthy economic growth spurred by remittances and revenues from the business process outsourcing sector.

Consolidated sales volume climbed to 37,124 gigawatt-hours in 2015 from 35,160 gWh in 2014.

“Strong consumer demand supported by overseas Filipino remittances and increasing BPO revenues, excess liquidity and aggressive lending appetite in the banking system and the vibrant growth in the real estate, entertainment, tourism, retail trade and infrastructure appear sustainable,” Meralco chairman Manuel Pangilinan said.

“These provide the fundamentals for continued healthy demand for power in the commercial and residential sectors. Vertical and horizontal structures continue to be built and absorbed by the market, which are leading indicators of future energy demand,” he said.

Revenues amounted to P249.8 billion, down five percent from a year ago due to low fuel prices, switch of captive costumers to retail electricity suppliers, and Meralco’s implementation of lower distribution rate.

Pangilinan, meanwhile, said while distribution rates were lower for most of 2016, “we expect Meralco’s core earnings for the year to be broadly similar to 2015 core income.” He said the lower distribution rates would have an impact of around P7 billion in the company’s revenues in 2016.

“There will be compensating factors for the anticipated decline of revenues in the distribution side of the business. Energy sales are pretty strong for first two months,” he said.

Pangilinan said another compensating factor of the lower distribution rates would be the increased contribution of subsidiaries and operating efficiency.

The company spent P11.3 billion in capital expenditures last year to finance projects aimed at meeting the demand of its over 5.8 million customers.