Meralco posts P1.78B seconds quarter net income

Manila Electric Co. (Meralco), the country’s biggest power distributor, bucked higher power purchased costs, weak sales and larger provisioning for losses to post a second quarter net income of P1.78 billion, a hefty increase of 66.3 percent from last year’s net profit of P1.07 billion.

Despite the turnaround in the second quarter, Meralco’s bottom line for the first six months this year at P73.59 million, is still a huge 94.8-percent decline from its net income of P1.47 billion during the same period in 2004.

Meralco chief financial officer Daniel Tagaza, in a disclosure to the Philippine Stock Exchange, attributed the improved second quarter performance to a slight 1.43-percent increase in power sales.

From April to June, Meralco’s power sales totaled 6.59 billion kilowatthours (kwh), a reversal of the slight contraction in the first quarter this year.

The commercial sector largely buoyed power consumption, with sales to the sector reaching 2.2360 billion kwh, a 5.2-percent increase from 2.244 billion kwh during the same period in 2004.

Tagaza said the retail trade and transport services segments were the main growth drivers in commercial sales, growing by 32.5 percent and 13.5 percent, respectively.

The full commercial operations of new shopping malls and other specialized retail establishments continued to fan the growth in the retail segment. In addition, the increased use of the LRT-1 and LRT-2 and MRT systems, especially during the opening of schools in June, drove the sales of the transport services segment.

This was bolstered by the proliferation of new call centers such as E-services in Makati and the HSBC Data Center in Alabang, which were only energized in March and May but are already using 80 percent of their respective contracted loads.

The strong growth in the commercial sector compensated for the drop in power sales for both the residential and industrial sectors.

Industrial segment sales went down 0.68 percent to 1.777 billion kwh even as the transport manufacturing and electrical machinery industries sales picked up, rising by 15.9 percent and 7.2 percent, respectively. The expansion in the transport manufacturing sector was due to the introduction into the local market by Toyota Motor Philippines of one of its international multi-purpose vehicles, Innova, and the production of right hand drive Mazdas and Ford units for export to Thailand by Ford Motor Co. Philippines.

Sales of the residential segment dipped 0.6 percent to 2.354 billion kwh from 2.368 billion kwh in 2004.

Tagaza noted that customers from the lower income brackets raised their consumption of electricity, while the higher income groups registered declines in their electricity consumption as power rates increased during the period. The AB income group, however, posted a 7.5-percent sales growth in June after a 4.03-percent and 4.69-percent sales contraction in April and May, respectively.