Meralco profit surges to P16.25 B

MANILA, Philippines - Manila Electric Co. (Meralco), the country’s largest power distributor, managed to post a higher income in the first nine months of the year despite a drop in revenues as it benefited from higher energy sales and regulatory approval on cost recoveries.

Meralco’s consolidated reported net income amounted to P16.25 billion, up 13 percent from P14.31 billion a year earlier, Meralco chief finance officer Betty Siy-Yap said during yesterday’s media briefing.

Meanwhile, consolidated core net income, which excludes one-time, exceptional charges, amounted to P15.795 billion from P14.29 billion, she said.

“The bulk of it, the substantial portions is attributable on approval of Energy Regulatory Commission on under-recoveries and cost of money we recorded in the second quarter,” Siy-Yap said.

Consolidated volume of energy distributed for the nine-month period was 27,496 gigawatt-hours, 4.7 percent higher than the 26,253 gwh in the same period in 2014, she said.

 “This was largely attributable to the strong demand from all customer classes on account of new customer connections, particularly residential and commercial, increased economic activity and benign inflation,” she added.

However, the power distributor said its consolidated revenues, of which electricity sales account for 98 percent, decreased three percent to P197.05 billion from P202.89 billion.

Siy-Yap said the lower consolidated revenues was the result of the combined effects of several factors, which include the lower average consolidated distribution tariff of P1.52 per kilowatt hour (kwh), seven percent lower than the tariff in 2014 of P1.63 per kwh; net lower pass through charges which is largely attributable to the lower generation charge; as a result of lower fuel price and corresponding effect on other components; competitively negotiated power supply agreements (PSA) prices; loss of contestable revenues to other Retail Electricity Supply (RES).

In the same briefing, Meralco chairman Manuel V. Pangilinan said the company will maintain its core guidance this year at P18.5 billion on the back of strong demand.

After a weak first quarter, Pangilinan noted strong demand started in May and continued to October.

“We have confidence Meralco will achieve its core guidance number of P18.5 billion on the back of October sales now running at 7.6 percent,” he said.