Meralco sees higher profit

MANILA, Philippines — Manila Electric Co. (Meralco) expects better profits this year anchored on the country’s continued economic expansion, its chairman Manuel V. Pangilinan said.

The company always sets a higher profit guidance every year, he said. “That’s always our budget.”

The power distributor has yet to announce its 2017 performance but it has projected a 4.9 percent jump in sales volume at end-2017 as power demand continued to pick up across all sectors in its franchise area.

This will drive the company to slightly surpass its 2016 core profit of P19.58 billion and a reported net income of P19.18 billion.

Meralco president Oscar Reyes earlier said growth was driven by all the sectors—residential, industrial and commercial—which have been showing hefty growth for most of the year.

However, Meralco expects softer growth in energy sales this year after two consecutive years of strong performance.

“We’ve had relatively strong performance in 2016, 2017. We have to take it in the context of high base in the past 24 months. We’re still calling for potential growth, let’s say 3.5 percent,” Reyes said.

At the start of 2018, weather was cooler so demand has been tame and there is no pressure on the power grid yet, Pangilinan said.

“So far the weather has been cooperating. It’s pretty cool so there’s no danger there. I don’t know what summer will bring and of course we can’t foresee any shutdown,“ Pangilinan said.

“Even if it’s contracted, if there’s an unexpected shutdown of plants, all we know is that the margins continue to be rather tight. So in the near term there’s nothing we can do. It takes time for new plants to be finished,“ he said.

To help meet future demand, the government should reconstitute the Energy Regulatory Commission (ERC) to get power projects, particularly Meralco’s power plants, into development.

“The main thing about Meralco is our power supply agreements (PSAs). We can’t proceed to build one or two of our plants without the PSA so we hope the government sees its way through to reconstitute the ERC,“ Pangilinan said.