Meralco projects P17.8-B core net income this year

MANILA, Philippines - The Manila Electric Co. (Meralco), the country’s biggest power distributor, aims to end the year with a consolidated core net income of P17.8 billion, higher than the P17 billion posted last year, its chairman Manuel V. Pangilinan said yesterday.

“In terms of full year outlook, based on the first nine months result, we’re guiding full year profitability on a core basis at P17.8 billion in reference, say to the 2013 core of about P17 billion, so that’s about 4.6-percent growth on core income in 2014 from 2013,” Pangilinan said in a media briefing yesterday.

Meralco’s consolidated reported net income amounted to P14.3 billion, up five percent compared with 2013, Meralco chief finance officer Betty Siy-Yap said during yesterday’s media briefing.

Consolidated core net income, which excludes one-time, exceptional charges, also amounted to P14.3 billion, Siy said.

Consolidated volume of energy distributed for the nine month period was 26,253 gigawatt-hour, two percent higher than the P25,616 GWh in 2013, Meralco reported.

“Total volume of electricity distributed grew by more than two percent, weighed down by the adverse effect of successive weather disturbances in the third quarter of 2014,” Meralco reported.

Meralco reported higher income despite a drop in revenues.

The power distributor posted that its consolidated revenues, of which electricity sales account for 98 percent, decreased by over two percent to P202.9 billion due to the combined effects of net lower pass-through generation charge and to the reduction in supply revenues form contestable customers supplied by other retail electricity suppliers as well as the adjustment of the prices at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

The Energy Regulatory Commission (ERC), the power regulator, ordered the recalculation of prices at the spot market for the December 2013 supply month bill following its findings of market collusion among players.

At the time, Meralco’s generation charge rose to P9.10 per kilowatt-hour and to P10.23 per kwh in January 2014.

Aside from these factors, Meralco also noted lower average distribution tariff and unrealized sales due to three weather disturbances, which affected the franchise area in the third quarter.