Summer heat drives Meralco’s core profit to P23 billion

MANILA, Philippines — The earnings of Pangilinan-led Manila Electric Co. (Meralco) surged in the first half as energy consumption heated up due to the impact of the dry season and the El Niño weather pattern.

In a press conference yesterday, Meralco CFO Betty Siy-Yap reported that consolidated core net income from January to June rose by 21 percent to P23.2 billion from P19.2 billion previously.

Consolidated net income was said to have improved by 26 percent to P22.4 billion from P17.9 billion, while revenues grew by six percent to P237.5 billion from P224.8 billion.

Siy-Yap said the growth was powered by “higher sales volume of the distribution utility (DU), higher contribution of the retail electricity business and higher plant availability of power generation in the second quarter of the year.”

The distribution business accounted for the biggest share of the bottomline at 55 percent, or P12.8 billion.

Total DU energy sales during the period rose to 26,954 gigawatt-hours (GWh) from 24,792 GWh as volumes at Meralco and Clark Electric Distribution Corp. grew by nine and seven percent, respectively.

Power generation chipped in P6.2 billion (27 percent), while retail electricity supply and non-electricity businesses contributed a combined P4.2 billion (18 percent).

In the first six months, operating expenses widened by eight percent year-on-year to P19.5 billion, mainly driven by maintenance activities of DU facilities in response to high heat index periods.

“In the second quarter of 2024, we faced yellow and red alerts as the Luzon grid’s peak demand surged beyond initial expectations due to the extreme heat brought about by the El Niño,” Meralco executive vice president and COO Ronnie Aperocho said.

From January to June, Meralco spent P19.9 billion in capital expenditures, of which P10 billion was used for distribution network projects and the remaining for the development of solar projects and the acquisition of new assets.

Following the robust financial results, Meralco chairman and CEO Manuel V. Pangilinan expects the company to hit P43 billion in core earnings by the end of this year.

“With the steady growth trajectory of the economy, we are satisfied that Meralco will sustain its robust performance throughout the year,” Pangilinan said.

As of end-June, Meralco’s customer count stood at 7.9 million, up three percent from the 7.7 million reported last year.