Meralco core earnings up

MANILA, Philippines — Manila Electric Co. (Meralco) saw its core net income rise in the first half, driven by strong energy sales and earnings from its power generation business.

Meralco reported yesterday a 15-percent jump in its core net income to P13.1 billion in the first semester from P11.4 billion in the same period last year.

Reported net income of the power distributor grew by 32 percent to P13.1 billion from P9.9 billion with the adjustments made last year in relation to the passing into law of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, and recognition of foreign exchange gains this year versus foreign exchange losses in 2021.

Meralco generated revenues amounting to P199.6 billion in the first half, up 34 percent from P149.1 billion last year.

The higher revenue was attributed mainly to the higher pass-through generation and other charges on account of persisting increase in global fuel prices, as well as the revenue contribution of the power generation business which stood at P13.6 billion.

Energy sales volumes in the first half improved by six percent to 23,968 GWh due to the continued easing of pandemic-related restrictions and higher temperatures.

Meralco said that as early as April, monthly sales volumes already breached the 4,000-GWh level, and were sustained throughout the second quarter, leading to an all-time high of 4,464 GWh in June.

Residential sales volumes grew by two percent year-on-year as household demand was tempered by return-to-onsite work and customers controlling their electricity consumption due to increasing prices of commodities.

Industrial sales volumes also increased modestly by four percent despite the logistical concerns from shortage of raw materials and high production costs.

The commercial segment, meanwhile, pushed sales volumes to a double-digit growth of 12 percent with improved retail, restaurants, and hotels activities.

Residential and commercial segments each accounted for 35 percent of the sales mix, while industrial contributed 30 percent.

Meralco ended the first half with a total of 7.5 million customers, three percent more than the 7.3 million during the first half of 2021.

The company said the increase in its customer count was driven by record-high energization of project-covered and ordinary service applications mostly from mixed-use buildings, subdivisions, and telecommunications customers.

Meralco’s average retail rate increased by 18 percent in the first half to P9.33 per kWh from P7.92 per kWh on the back of higher generation charges due to higher fuel costs, peso depreciation and higher spot market prices.

In terms of capital expenditures, the company spent P14.2 billion during the six-month period, of which 62 percent or P8.7 billion went to networks capex, which consisted of new connections, asset renewals, and load growth projects, among others.

Meralco chief finance officer Betty Siy-Yap said the company is currently in discussions with a bank for a loan for one of its projects for a subsidiary.

“The amount has not yet been finalized, but we hope to close something within the third quarter,” she said.

Meralco chairman Manuel V. Pangilinan, meanwhile, said he remains optimistic that the company would be able sustain its financial performance throughout 2022.

“We remain optimistic that Meralco will be able to deliver our commitment to our customers and shareholders.”