TransCo profit seen dropping to P15B

State-run National Transmission Corp. (TransCo) is expecting its net income to drop to P15 billion in 2007 from a projected earnings of P17 billion to P20 billion this year, a top TransCo official said.

TransCo president Alan T. Ortiz said the P15 billion was based on the maximum allowable revenue (MAR) approved by the Energy Regulatory Commission (ERC).

The TransCo chief, however, said they expect the level of profitability to improve again in two years time.

"Towards the end of 2007, we will finish some projects that will help bring up again our income in 2008," he said.

According to Ortiz, the earnings of the company is also dependent on the transmission projects that would be put on line.  "The more transmission lines we put up, the better our income," he said.

TransCo posted a net income of P9.13 billion in the first six months of the year, up by P605 million a year ago.

For the first six months of the year, the state utility firm’s net utility revenue reached P13.09 billion, an increase of 6.1 percent from last year’s level. 

Ortiz attributed the improved performance to the implementation of the interim MAR for the current year as approved by the Energy Regulatory Commission effective April 2006.

According to the TransCo chief, the company was able to trim down its expenditures during the period under review.

Operating expenses also declined by P1.53 billion from the projected budget of P5.49 billion for January to June this year. 

 Ortiz said the first semester financial performance underscores the corporation’s viability especially in light of its forthcoming privatization.