Former Piltel suffers huge income drop in 9 months

MANILA, Philippines - PLDT Communications and Energy Ventures Inc. (PCEV), formerly Pilipino Telephone Corp., suffered a huge drop in its net income to P1.4 billion in the first three quarters of 2010, from P17.8 billion during the same period last year.

In a statement, it said net income reported during the January-September 2009 period still includes net income relating to its cellular business, which was sold and transferred to Smart Communications in August 2009. PCEV is 99.5 percent owned by Smart.

Likewise, core net income, before exceptional, one-time items, declined to P1.7 billion in the first nine months of 2010 from P16.1 billion recorded in the same period in 2009.

PCEV’s income is now 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. PCEV owns 50 percent of Beacon, a special purpose company jointly owned by PCEV and Metro Pacific Investments Corp. (MPIC) for the sole purpose of holding 392.5 million shares or 34.8 percent of Meralco’s outstanding common shares.

Its direct holdings in Meralco consist of 68.8 million common shares (approximately six percent interest), retained by PCEV after the transfer of its 154.2 million shares to Beacon in March 2010. PCEV acquired its original 20 percent investment in Meralco in July 2009.

Meralco’s net income for the first nine months of 2010 increased to P8 billion, 61 percent higher than the P5 billion realized in the same period in 2009. Consolidated core net income, which excludes one-time, exceptional charges, stood at P9.2 billion, which was 80 percent better than the P5.1 billion posted in 2009.

Company officials said the improvements reflect the significantly higher volume of energy sold as a result of the warmer temperature, along with the surge in demand from the commercial and industrial sectors.

Also contributing to the increase were the higher number of billed customers and the later-than-scheduled implementation of the distribution rate adjustments approved by the Energy Regulations Commission (ERC).

Meralco’s consolidated revenues, in which electricity sales account for approximately 97 percent of the total, increased 32 percent to P188.9 billion.

Approximately 35 percent of the total increase in consolidated electricity revenues is accounted for by the 11 percent growth in kilowatt-hour sold, while 50 percent is due to higher average purchased power and transmission pass-through costs.

Officials pointed out that the system loss charge continues to decrease as a result of improved system efficiencies as well as aggressive initiatives to reduce power line pilferages in coordination with various local government units.