Meralco likely to achieve 2014 income target

MANILA, Philippines - The Manila Electric Co. (Meralco), the country’s biggest power distributor, is likely to achieve its consolidated core net income target of P17.8 billion (P18 billion) for the year due to strong revenues.

“I think we will achieve our end-year guidance,” said Meralco senior vice president for Customer Retail Services Al Panlilio.

Panlilio said that overall, “revenues were good.” This was despite some weather disturbances in the third quarter of the year.

The P17.8-billion core net income target is roughly 4.6 percent higher than the previous year’s P17 billion.

In the first nine months of the year, Meralco’s consolidated net income amounted to P14.3 billion, up five percent from  a year ago.

Consolidated core net income during the period, which excludes one-time, exceptional charges, also amounted to P14.3 billion.

Consolidated volume of energy distributed for the nine-month period was 26,253 gigawatt-hour, two percent higher than the P25,616 GWh in 2013, Meralco said.

“Total volume of electricity distributed grew by more than two percent, weighed down by the adverse effect of successive weather disturbances in the third quarter of 2014,” Meralco said in its nine-month report.

The power distributor reported that its consolidated revenues, of which electricity sales account for 98 percent, decreased by over two percent to P202.9 billion due to the combined effects of net lower pass-through generation charge and to the reduction in supply revenues form contestable customers supplied by other retail electricity suppliers as well as the adjustment of the prices at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

The ERC ordered the recalculation of prices at the spot market for the December 2013 supply month bill following its findings of market collusion among players.

At the time, Meralco’s generation charge rose to P9.10 per kilowatt-hour and to P10.23 per kwh in January 2014.

Aside from these factors, Meralco also noted lower average distribution tariff and unrealized sales due to three weather disturbances, which affected the franchise area in the third quarter.