Meralco sees 50% decline in first half net income

Manila Electric Co. (Meralco), the country’s largest electricity distributor, said yesterday it was likely to record at least a 50-percent decline in net income in the first half of the year.

The company recorded a net income of P953 million in the first six months of 2001.

Meralco head of finance and planning, Antonio Valera said his firm expects weak income in the first half mainly because of the government not approving its petition to raise electricity rates and the slow economy.

"It is going to be down. The net income will decline by at least 50 percent compared to the previous semester," Valera said.

For the whole of 2002, Valera said, they expect Meralco’s income to be significantly lower than last year.

Meralco reported a net loss of P72.8 million for the first quarter of 2002, a dramatic reversal of its P394.4 million net income realized in the same period last year.

The company attributed the loss to a decline in sales volume coupled with higher systems losses for the quarter.

Meralco officials said the expected poor performance would affect the firm’s plans to borrow 40 percent of its programmed P6.8 billion capital expenditure (capex) this year.

"We think we may no longer sustain the programmed capex for this year. We will also start squeezing our operation and maintenance costs," Valera said.

Meralco said it will release results of its first half financial performance on July 24.