MANILA, Philippines - PLDT Communications and Energy Ventures Inc. (PCEV), formerly Pilipino Telephone Corp. (Piltel), suffered a huge drop in its net income from P7 billion during the first six months of 2009 to only P872 million in the same period this year.
Core net income, before exceptional, one-time items, also declined heavily to P1.1 billion for the January to June 2010 period from P6.3 billion in the first six months of last year. PCEV is 99.5-percent owned by Smart Communications.
PCEV’s income is derived mainly from its direct equity share in the net income of Manila Electric Co. (Meralco) and its holdings in Beacon Electric Asset Holdings Inc. It owns 50 percent of Beacon Electric, a special purpose company jointly owned with Metro Pacific Investments Corp. (MPIC) whose sole purpose is to hold shares in Meralco, which presently amount to 392.5 million shares or equivalent to 34.8 percent of Meralco’s outstanding common shares.
“We are pleased that PCEV’s investment in Meralco is already bearing fruit with the continued improvement in Meralco’s performance and the declaration of cash dividends,” said PCEV president and CEO Napoleon Nazareno, who is also president and CEO of Smart Communications and Philippine Long Distance Telephone Co. (PLDT).
PCEV’S direct holdings in Meralco consist of 68.8 million Meralco common shares (approximately six percent interest) retained after the transfer of its 154.2 million shares to Beacon Electric in March 2010. The company acquired its original 20 percent investment in Meralco in July 2009.
Company officials explained that the huge income recorded in the first half of 2009 still includes PCEV’s net earnings relating to its cellular business, which was sold and transferred to Smart in August 2009.
Core earnings per share for the first half of 2010 stood at 10 centavos compared with 54 centavos for the first six months of 2009.
Meralco’s consolidated net income for the first half of 2010 increased to P4.8 billion, 51 percent higher than the P3.2 billion realized for the same period in 2009. Meanwhile, core net income for the first six months of this year stood at P5.8 billion, which was 82 percent better than the P3.2 billion registered in the same period last year.
PCEV said the improvements reflect the significantly higher volume of energy sold with the surge in demand from all customer classes, led by the industrial sector. Also contributing to this improvement was the higher average distribution rate for the period. The rate adjustment in May 2009 was Meralco’s first rate adjustment since 2003.