Meralco core income seen to top P14.5 billion

MANILA, Philippines - Power utility giant Manila Electric Co. (Meralco) expects its 2012 net income to top its estimated P14.5 billion core profit last year, according to a top company official.

 “Profit guidance for the year should be higher than last year,” said Meralco president and chief executive officer Manuel V. Pangilinan.

He said the optimistic outlook is based on assumptions of a favorable economic environment despite the uncertainties lingering in the eurozone and the US.

Meralco had revised upward its 2011 core profit target to P14.5 billion from the original goal of P14 billion. The profit guidance is 19 percent higher than the P12.2 billion recorded in 2010.

Pangilinan noted that sales rose eight percent in January compared with the same period in 2011 on higher sales volume from commercial and industrial users as well as new connections. “We’re pleasantly surprised with the extent of the increase. That’s a good sign for the economy,” he said.

 “If this growth continues, we’re going to have fairly tight supply in the next two to three years.”

In the nine months ending September last year, Meralco reported a 27-percent rise in consolidated core net income to P11.6 billion while its revenues went up two percent to P192.94 billion.

Meralco currently has over five million customers in its franchise area.

Pangilinan said the company is conducting feasibility studies on gas-fired power plants as it seeks new revenue streams that can enhance shareholder value.

Meralco, through unit Meralco PowerGen Corp., is building a 600-megawatt coal-fired power plant in Zambales in partnership with Aboitiz Power Corp. and the local unit of Taiwan Cogeneration International Corp.