Meralco sees slight hike in core income to P18.5 B

MANILA, Philippines - Manila Electric Co. (Meralco), the country’s largest power distributor, is projecting an increase in its core net income to P18.5 billion this year from P18.1 billion in 2014, its chairman Manuel V. Pangilinan said.

Sales volume growth in the second half is expected to be slightly higher than the first semester, Pangilinan said in a briefing yesterday.

“The second half (sales volume) will be driven by overall robust demand that we saw in the first half. July, in fact, showed a demand growth of seven percent... absent any economic major disturbances, second half volume will be slightly ahead of first half,” he said.

However, the positive sales volume will be “severely impacted” by the approved lower interim tariff which translated to a reduction of 17.53 centavos per kilowatt-hour on Meralco’s transmission rate.

Earlier this month, the Energy Regulatory Commission (ERC) provisionally approved the reduction on the distribution utility’s rate to P1.281 per kwh until the final rate for the fourth regulatory period.

“The impact for the bottom line in the second half alone is approximately P2.2 billion after tax,” Pangilinan said.

In the same briefing, Meralco president Oscar S. Reyes said the first semester results “were favorable.”

Consolidated core net income rose 18 percent to P11.6 billion in the January-June period from P9.9 billon a year earlier, while reported net income jumped 22 percent to P11.7 billion from P9.6 billion.

Reyes said these were driven by the record high electricity sales and increase in customer base.

“Our energy sales for the month of June, we recorded an all-time high of 3,441 gigawatt-hours, pushing first half sales driven by commercial sales,” he noted.

For the January to June period, total electricity sales volume grew three percent to 17,753 gwh. This was mainly boosted by sales to commercial customers, followed by residential and industrial.

The power distributor’s consolidated revenues, of which electricity sales account for 98 percent, climbed 1.4 percent to P134 billion from P132 billion as a result of low base effect of 2014 electricity revenues.

Total costs and expenses for the period was steady at P117.8 billion.

Consolidated ca-pital expenditures in the first half amounted to P5.8 billion, of which almost P4 billion were for the electricity-related capital projects.